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Evaluating Counterterrorism Spending

Author

Listed:
  • John Mueller
  • Mark G. Stewart

Abstract

In this article, we present a simple back-of-the-envelope approach for evaluating whether counterterrorism security measures reduce risk sufficiently to justify their costs. The approach uses only four variables: the consequences of a successful attack, the likelihood of a successful attack, the degree to which the security measure reduces risk, and the cost of the security measure. After measuring the cost of a counterterrorism measure, we explore a range of outcomes for the costs of terrorist attacks and a range of possible estimates for how much risk might be reduced by the measure. Then working from this mix of information and assumptions, we can calculate how many terrorist attacks (and of what size) would need to be averted to justify the cost of the counterterrorism measure in narrow cost-benefit terms. To illustrate this approach, we first apply it to the overall increases in domestic counterterrorism expenditures that have taken place since the terrorist attacks of September 11, 2001, and alternatively we apply it to just the FBI's counterterrorism efforts. We then evaluate evidence on the number and size of terrorist attacks that have actually been averted or might have been averted since 9/11.

Suggested Citation

  • John Mueller & Mark G. Stewart, 2014. "Evaluating Counterterrorism Spending," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 237-248, Summer.
  • Handle: RePEc:aea:jecper:v:28:y:2014:i:3:p:237-48
    Note: DOI: 10.1257/jep.28.3.237
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.28.3.237
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    References listed on IDEAS

    as
    1. Max Abrahms, 2011. "Does Terrorism Really Work? Evolution in the Conventional Wisdom since 9/11," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(6), pages 583-594, December.
    2. Stewart Mark G & Mueller John, 2011. "Cost-Benefit Analysis of Advanced Imaging Technology Full Body Scanners for Airline Passenger Security Screening," Journal of Homeland Security and Emergency Management, De Gruyter, vol. 8(1), pages 1-20, June.
    3. Mark G. Stewart & John Mueller, 2013. "Aviation Security, Risk Assessment, and Risk Aversion for Public Decisionmaking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(3), pages 615-633, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dimant, Eugen & Krieger, Tim & Meierrieks, Daniel, 2023. "Paying them to hate US: The effect of U.S. military aid on anti-American terrorism, 1968-2018," Discussion Paper Series 2023-02, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    2. Stancanelli, Elena G. F., 2023. "British Voting Intentions and the Far Reach of 11 September Terrorist Attacks in New York," IZA Discussion Papers 16120, Institute of Labor Economics (IZA).
    3. Eswaran, Mukesh, 2018. "Decentralized Terrorism and Social Identity," Microeconomics.ca working papers tina_marandola-2018-4, Vancouver School of Economics, revised 06 Jun 2018.
    4. Abel Brodeur, 2018. "The Effect of Terrorism on Employment and Consumer Sentiment: Evidence from Successful and Failed Terror Attacks," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 246-282, October.
    5. Mahmood, Rafat & Jetter, Michael, 2019. "Military Intervention via Drone Strikes," IZA Discussion Papers 12318, Institute of Labor Economics (IZA).
    6. Michael Jetter & David Stadelmann, 2019. "Terror per Capita," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 286-304, July.
    7. Stotz, Tamara & Bearth, Angela & Ghelfi, Signe Maria & Siegrist, Michael, 2022. "The perceived costs and benefits that drive the acceptability of risk-based security screenings at airports," Journal of Air Transport Management, Elsevier, vol. 100(C).
    8. Mark G. Stewart & John Mueller, 2018. "Risk and economic assessment of U.S. aviation security for passenger-borne bomb attacks," Journal of Transportation Security, Springer, vol. 11(3), pages 117-136, December.
    9. Shuai Chen, 2022. "Rally Post-Terrorism," CESifo Working Paper Series 9638, CESifo.
    10. Eiselt, H.A., 2018. "Destabilization of terrorist networks," Chaos, Solitons & Fractals, Elsevier, vol. 108(C), pages 111-118.
    11. Choudhary, Sheraz Ahmad & Khan, Muhammad Azhar & Sheikh, Abdullah Zafar & Jabor, Mohd Khata & Nordin, Mohd Safarin bin & Nassani, Abdelmohsen A. & Alotaibi, Saad M. & Abro, Muhammad Moinuddin Qazi & V, 2020. "Role of information and communication technologies on the war against terrorism and on the development of tourism: Evidence from a panel of 28 countries," Technology in Society, Elsevier, vol. 62(C).
    12. Mark G. Stewart & John Mueller, 2017. "Risk and economic assessment of expedited passenger screening and TSA PreCheck," Journal of Transportation Security, Springer, vol. 10(1), pages 1-22, June.
    13. Grant, Matthew J. & Stewart, Mark G., 2017. "Modelling improvised explosive device attacks in the West – Assessing the hazard," Reliability Engineering and System Safety, Elsevier, vol. 165(C), pages 345-354.
    14. Tingbani, Ishmael & Okafor, Godwin & Tauringana, Venancio & Zalata, Alaa Mansour, 2019. "Terrorism and country-level global business failure," Journal of Business Research, Elsevier, vol. 98(C), pages 430-440.
    15. Jetter, Michael, 2014. "Terrorism and the Media," IZA Discussion Papers 8497, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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