The research on the influence of democracy on terrorism renders support for two causal mechanisms. One is that democracy reduces terrorism because it creates an environment in which dissenters can pursue their interests through peaceful means. The other argument states that democracy encourages terrorism due to the intrinsic liberties and freedoms that provide an opportunity for terrorists to easily organize, recruit, and mount operations. This article contributes to this second line of thought by framing support for rebel groups as one of the contexts in which democracy’s influence on terrorism is examined. I identify a theoretical mechanism about how democratic states unknowingly facilitate terrorism by letting terrorists freely stay within their borders, raise funds, smuggle arms, and operate offices. The empirical findings provide support for the hypothesis that democracies are vulnerable and can easily be exploited by terrorists since they have an environment conducive to terrorist activities.