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Defense R&D In The Anti-Terrorist Era

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Author Info
Manuel Trajtenberg

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Abstract

This paper analyzes the terrorist threat following 9/11, and explores its implications for defense R&D. First, it reviews the composition of defense R&D since 9/11: big weapon systems still command 30% of defense R&D spending (legacy of the Cold War), vis-à-vis just about 13% for intelligence and anti-terrorism. The second part examines the nature of the terrorist threat, and develops a simple model of terrorism, cast in a nested discrete choice framework. Two strategies are considered: fighting terrorism at its source, and protecting individual targets, which entails a negative externality. Intelligence emerges as the key aspect of the war against terrorism and, accordingly, R&D aimed at enhancing intelligence capabilities is viewed as the cornerstone of defense R&D.

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

Volume (Year): 17 (2006)
Issue (Month): 3 (June)
Pages: 177-199
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Handle: RePEc:taf:defpea:v:17:y:2006:i:3:p:177-199

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Related research
Keywords: Terrorism; Defense R&D; Public goods; Intelligence; Dual-use;

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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. Cowan, R. & Foray, D., 1995. "Quandaries in the Economics of Dual Technologies and Spillovers from Military to Civilian Research and Development," UWO Department of Economics Working Papers 9509, University of Western Ontario, Department of Economics.
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  2. Lichtenberg, Frank R., 1995. "Economics of defense R&D," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 15, pages 431-457 Elsevier. [Downloadable!] (restricted)
  3. Enders, Walter & Sandler, Todd, 1995. "Terrorism: Theory and applications," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 9, pages 213-249 Elsevier. [Downloadable!] (restricted)
  4. Ian Ayres & Steven D. Levitt, 1998. "Measuring Positive Externalities From Unobservable Victim Precaution: An Empirical Analysis Of Lojack," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 43-77, February. [Downloadable!] (restricted)
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  5. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc. [Downloadable!]
  6. Kobi Kagan & Asher Tishler & Avi Weiss, 2005. "On The Use Of Terror Weapons Versus Modern Weapon Systems In An Arms Race Between Developed And Less Developed Countries," Defence and Peace Economics, Taylor and Francis Journals, vol. 16(5), pages 331-346, October. [Downloadable!] (restricted)
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Cited by:
(explanations, 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. Eli Berman & David D. Laitin, 2008. "Religion, Terrorism and Public Goods: Testing the Club Model," NBER Working Papers 13725, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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