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Saturday, March 08, 2008

Spending on Counter-Terrorism: Is It Worth It?

Bjørn Lomborg and Todd Sandler argue that we are not being rational in our approach to combating terrorism:

Re-thinking counter-terrorism, by Bjørn Lomborg and Todd Sandler, Project Syndicate: ...[T]he developed world is spending hundreds of billions of dollars to protect against terrorism. But is it worth it?

Although citizens of rich countries regard terrorism as one of the world’s greatest threats, trans-national terrorists take, on average, just 420 lives each year. So, have the terrorists succeeded in getting the developed world to invest poorly in counter-terrorism, while ignoring more pressing problems involving health, the environment, conflict, and governance? ...

Global annual spending on homeland security measures has increased by about US$70 billion since 2001. Unsurprisingly, this initially translated into a 34 per cent drop in trans-national terrorist attacks. What is surprising is that there have been 67 more deaths, on average, each year.

The rise in the death toll is caused by terrorists responding rationally to the higher risks imposed by greater security measures. They have shifted to attacks that create more carnage to increase the impact of fewer attacks. ...

Increasing defensive measures worldwide by 25 per cent would cost at least US$75 billion over five years. Terrorists will inevitably shift to softer targets. ...[E]ach extra dollar spent increasing defensive measures will achieve – at most – about 30 cents of return. We could save about 105 lives a year in this best-case scenario. To put this into context, 30,000 lives are lost annually on US highways.

Contrary to the effect of increased defensive measures, fostering greater international cooperation to cut off terrorists’ financing would be relatively cheap and quite effective. ... While this approach would do little to reduce the number of small events, such as “routine” bombings or political assassinations, it would significantly impede the spectacular attacks that involve a large amount of planning and resources. ...

Another option is for target nations to think more laterally in their approach to counter-terrorism. Some observers argue that the US – a key target – could do more to project a positive image and negate terrorist propaganda. This could be achieved in part by reallocating or increasing foreign assistance.

Currently, the US gives only 0.17 per cent of its gross net income as official development assistance – the second-smallest share among OECD countries – and aid is highly skewed toward countries that support America’s foreign policy agenda. By expanding humanitarian aid with no strings attached, the US could do more to address hunger, disease, and poverty, while reaping considerable benefits to its standing and lowering terror risks.

We do not advocate conceding to terrorists’ demands; rather, we recommend that foreign policy be smarter and more inspirational. There is no panacea for terrorism. ... However, we should not allow fear to distract us from the best ways to respond. ...

    Posted by on Saturday, March 8, 2008 at 02:36 AM in Economics, Terrorism | Permalink  TrackBack (0)  Comments (23)

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