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An Economic Analysis Of Security Policies

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Author Info
Tilman Brück

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Abstract

This paper analyses public policy choices in the security economy from an economic perspective. It discusses the role of public goods for national and global security and identifies the importance of the first- and second-order indirect effects of insecurity on economic activity, which include the behavioural responses of agents and the government to security measures, akin to such effects in insurance economics. Furthermore, key public policy trade-offs are outlined, in particular between security and efficiency, globalisation, equity and freedom. The analysis identifies suitable policy options for raising security in the national and international contexts and in view of these trade-offs. A balance between market and non-market instruments in achieving security should be aimed for in order to minimise the adverse effects of aiming for higher security. In addition, the public good nature of security implies that international coordination of security policies is important, despite this process being fraught with enforcement problems.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 16 (2005)
Issue (Month): 5 (October)
Pages: 375-389
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Handle: RePEc:taf:defpea:v:16:y:2005:i:5:p:375-389

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Related research
Keywords: Collective goods; Public policy; Regulation; Risk; Security; Terrorism;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hummels, David, 2001. "Time as a Trade Barrier," GTAP Working Papers 1152, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  2. Patrick Lenain & Marcos Bonturi & Vincent Koen, 2002. "The Economic Consequences of Terrorism," OECD Economics Department Working Papers 334, OECD, Economics Department. [Downloadable!]
  3. Bruno S. Frey & Simon Luechinger, . "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers iewwp137, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  4. Edward L. Glaeser & Jesse M. Shapiro, 2001. "Cities and Warfare: The Impact of Terrorism on Urban Form," Harvard Institute of Economic Research Working Papers 1942, Harvard - Institute of Economic Research. [Downloadable!]
  5. William D. Nordhaus, 2002. "The Economic Consequences of a War with Iraq," Cowles Foundation Discussion Papers 1387, Cowles Foundation, Yale University. [Downloadable!]
  6. Howard Kunreuther & Erwann Michel-Kerjan & Beverly Porter, 2003. "Assessing, Managing, and Financing Extreme Events: Dealing with Terrorism," NBER Working Papers 10179, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June. [Downloadable!] (restricted)
  8. Bart Hobijn, 2002. "What will homeland security cost?," Economic Policy Review, Federal Reserve Bank of New York, issue Nov, pages 21-33. [Downloadable!]
  9. Kunreuther, Howard & Heal, Geoffrey, 2003. " Interdependent Security," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 231-49, March-May. [Downloadable!] (restricted)
  10. Ram, Rati, 1995. "Defense expenditure and economic growth," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 10, pages 251-274 Elsevier. [Downloadable!] (restricted)
  11. Sunstein, Cass R, 2003. " Terrorism and Probability Neglect," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 121-36, March-May. [Downloadable!] (restricted)
  12. Todd Sandler, 2005. "Collective versus unilateral responses to terrorism," Public Choice, Springer, vol. 124(1), pages 75-93, July. [Downloadable!] (restricted)
  13. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June. [Downloadable!] (restricted)
  14. Edward L. Glaeser & Jesse M. Shapiro, 2001. "Cities and Warfare: The Impact of Terrorism on Urban Form," NBER Working Papers 8696, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Chen, Andrew H. & Siems, Thomas F., 2004. "The effects of terrorism on global capital markets," European Journal of Political Economy, Elsevier, vol. 20(2), pages 349-366, June. [Downloadable!] (restricted)
  16. Todd Sandler, 2003. "Collective Action and Transnational Terrorism," The World Economy, Blackwell Publishing, vol. 26(6), pages 779-802, 06. [Downloadable!] (restricted)
  17. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank. [Downloadable!]
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