IDEAS home Printed from https://ideas.repec.org/p/fip/fedlwp/93884.html
   My bibliography  Save this paper

Politically influenced counterterrorism policy and welfare efficiency

Author

Listed:
  • Subhayu Bandyopadhyay
  • Todd Sandler

Abstract

The paper examines how two targeted countries strategically deploy their counterterror forces when lobbying defense firms influence counterterror provision. For proactive measures, lobbying activities in a single targeted country lessen underprovision, raise overall counterterrorism, and reduce terrorism. Welfare decreases in the politically influenced country but increases in the other targeted country owing to enhanced free riding. Lobbying influence on the targeted countries’ welfare is tied to terrorists’ targeting preferences and how the lobbied government weighs citizens’ welfare. For key parametric values, lobbying in both targeted countries may result in the first-best equilibrium. With two-country lobbying, international policy coordination by at-risk governments may lead, surprisingly, to less efficient outcomes than the noncooperative equilibrium. Additionally, lobby-influenced defensive countermeasures generally affect efficiency adversely.

Suggested Citation

  • Subhayu Bandyopadhyay & Todd Sandler, 2022. "Politically influenced counterterrorism policy and welfare efficiency," Working Papers 2022-007, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:93884
    DOI: 10.20955/wp.2022.007
    Note: Publisher DOI: https://doi.org/10.1016/j.ejpoleco.2022.102250
    as

    Download full text from publisher

    File URL: https://s3.amazonaws.com/real.stlouisfed.org/wp/2022/2022-007.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.20955/wp.2022.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Claude Berrebi & Esteban F. Klor, 2010. "The Impact of Terrorism on the Defence Industry," Economica, London School of Economics and Political Science, vol. 77(307), pages 518-543, July.
    2. B. Curtis Eaton, 2004. "The elementary economics of social dilemmas," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 805-829, November.
    3. Kjell Hausken, 2012. "The economics of terrorism against two targets," Applied Economics Letters, Taylor & Francis Journals, vol. 19(12), pages 1135-1138, August.
    4. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    5. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2015. "The Economics Of Counterterrorism: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 131-157, February.
    6. David A Jaeger & Zahra Siddique, 2018. "Are Drone Strikes Effective in Afghanistan and Pakistan? On the Dynamics of Violence between the United States and the Taliban," CESifo Economic Studies, CESifo Group, vol. 64(4), pages 667-697.
    7. Richard Cornes & Roger Hartley & Todd Sandler, 1999. "Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 499-509, October.
    8. Khusrav Gaibulloev & Todd Sandler, 2019. "What We Have Learned about Terrorism since 9/11," Journal of Economic Literature, American Economic Association, vol. 57(2), pages 275-328, June.
    9. Subhayu Bandyopadhyay & Todd Sandler, 2011. "The Interplay Between Preemptive and Defensive Counterterrorism Measures: A Two‐stage Game," Economica, London School of Economics and Political Science, vol. 78(311), pages 546-564, July.
    10. Vicki Bier & Kjell Hausken, 2011. "Endogenizing the sticks and carrots: modeling possible perverse effects of counterterrorism measures," Annals of Operations Research, Springer, vol. 186(1), pages 39-59, June.
    11. Vicki Bier & Santiago Oliveros & Larry Samuelson, 2007. "Choosing What to Protect: Strategic Defensive Allocation against an Unknown Attacker," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(4), pages 563-587, August.
    12. Landes, William M, 1978. "An Economic Study of U.S. Aircraft Hijacking, 1961-1976," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 1-31, April.
    13. Toke S. Aidt & Uk Hwang, 2014. "To Ban or Not to Ban: Foreign Lobbying and Cross-National Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 47(1), pages 272-297, February.
    14. Geoffrey Heal & Howard Kunreuther, 2007. "Modeling Interdependent Risks," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 621-634, June.
    15. Kunreuther, Howard & Heal, Geoffrey, 2003. "Interdependent Security," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 231-249, March-May.
    16. Garcia-Alonso, Maria D.C. & Levine, Paul & Smith, Ron, 2016. "Military aid, direct intervention and counterterrorism," European Journal of Political Economy, Elsevier, vol. 44(C), pages 112-135.
    17. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2011. "Foreign aid as counterterrorism policy," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 423-447, July.
    18. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
    19. Paan Jindapon & William S. Neilson, 2009. "The Impact Of Societal Risk Attitudes On Terrorism And Counterterrorism," Economics and Politics, Wiley Blackwell, vol. 21(3), pages 433-451, November.
    20. Kjell Hausken & Vicki M. Bier & Jun Zhuang, 2009. "Defending Against Terrorism, Natural Disaster, and All Hazards," International Series in Operations Research & Management Science, in: Vicki M. M. Bier & M. Naceur Azaiez (ed.), Game Theoretic Risk Analysis of Security Threats, chapter 4, pages 65-97, Springer.
    21. Todd Sandler & Kevin Siqueira, 2006. "Global terrorism: deterrence versus pre‐emption," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1370-1387, November.
    22. Sandler, Todd & Lapan, Harvey E., 1988. "The Calculus of Dissent: An Analysis of Terrorists' Choice of Targets," Staff General Research Papers Archive 10818, Iowa State University, Department of Economics.
    23. Bandyopadhyay, Subhayu & Sandler, Todd, 2021. "Counterterrorism policy: Spillovers, regime solidity, and corner solutions," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 811-827.
    24. Cárceles-Poveda, Eva & Tauman, Yair, 2011. "A strategic analysis of the war against transnational terrorism," Games and Economic Behavior, Elsevier, vol. 71(1), pages 49-65, January.
    25. Kjell Hausken, 2018. "Proactivity and Retroactivity of Firms and Information Sharing of Hackers," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-30, March.
    26. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    27. Edward L. Glaeser, 2005. "The Political Economy of Hatred," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 45-86.
    28. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    29. B. Peter Rosendorff & Todd Sandler, 2004. "Too Much of a Good Thing?," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(5), pages 657-671, October.
    30. Carter, David B., 2016. "Provocation and the Strategy of Terrorist and Guerrilla Attacks," International Organization, Cambridge University Press, vol. 70(1), pages 133-173, January.
    31. Enders,Walter & Sandler,Todd, 2012. "The Political Economy of Terrorism," Cambridge Books, Cambridge University Press, number 9780521181006.
    32. Abigail R. Hall & Christopher J. Coyne, 2014. "The political economy of drones," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(5), pages 445-460, October.
    33. Kjell Hausken, 2021. "Governments Playing Games and Combating the Dynamics of a Terrorist Organization," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-26, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Subhayu Bandyopadhyay & Todd Sandler, 2023. "The Trade-Offs of Counterterrorism Policies," Review, Federal Reserve Bank of St. Louis, vol. 105(3), pages 177-197, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bandyopadhyay, Subhayu & Sandler, Todd, 2021. "Counterterrorism policy: Spillovers, regime solidity, and corner solutions," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 811-827.
    2. Bandyopadhyay, Subhayu & Sandler, Todd, 2023. "Voluntary participation in a terror group and counterterrorism policy," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 500-513.
    3. Subhayu Bandyopadhyay & Todd Sandler, 2020. "Counterterrorism Policy: Spillovers, Regime Stability, and Corner Solutions," Working Papers 2020-015, Federal Reserve Bank of St. Louis.
    4. Yang Jiao & Zijun Luo, 2019. "A model of terrorism and counterterrorism with location choices," Public Choice, Springer, vol. 179(3), pages 301-313, June.
    5. Khusrav Gaibulloev & Todd Sandler, 2023. "Common myths of terrorism," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 271-301, April.
    6. Subhayu Bandyopadhyay & Todd Sandler, 2023. "The Trade-Offs of Counterterrorism Policies," Review, Federal Reserve Bank of St. Louis, vol. 105(3), pages 177-197, July.
    7. Mario Gilli & Paolo Tedeschi, 2020. "European Union and Transnational Terrorism. A Normative Analysis of Strategic Spillovers," Working Papers 437, University of Milano-Bicocca, Department of Economics, revised Mar 2020.
    8. Garcia-Alonso, Maria D.C. & Levine, Paul & Smith, Ron, 2016. "Military aid, direct intervention and counterterrorism," European Journal of Political Economy, Elsevier, vol. 44(C), pages 112-135.
    9. Sushil Gupta & Martin K. Starr & Reza Zanjirani Farahani & Mahsa Mahboob Ghodsi, 2020. "Prevention of Terrorism–An Assessment of Prior POM Work and Future Potentials," Production and Operations Management, Production and Operations Management Society, vol. 29(7), pages 1789-1815, July.
    10. Todd Sandler, 2013. "Introduction: Advances in the Study of the Economics of Terrorism," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 768-773, April.
    11. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2020. "Terms-of-trade and counterterrorism externalities," Oxford Economic Papers, Oxford University Press, vol. 72(2), pages 293-318.
    12. Bandyopadhyay, Subhayu & Sandler, Todd, 2014. "Immigration policy and counterterrorism," Journal of Public Economics, Elsevier, vol. 110(C), pages 112-123.
    13. Siqueira, Kevin & Sandler, Todd, 2007. "Terrorist backlash, terrorism mitigation, and policy delegation," Journal of Public Economics, Elsevier, vol. 91(9), pages 1800-1815, September.
    14. Abhra Roy & Jomon Paul, 2013. "Terrorism deterrence in a two country framework: strategic interactions between R&D, defense and pre-emption," Annals of Operations Research, Springer, vol. 211(1), pages 399-432, December.
    15. Bose, Gautam & Konrad, Kai A., 2020. "Devil take the hindmost: Deflecting attacks to other defenders," Reliability Engineering and System Safety, Elsevier, vol. 204(C).
    16. Kjell Hausken & Jun Zhuang, 2011. "Governments' and Terrorists' Defense and Attack in a T -Period Game," Decision Analysis, INFORMS, vol. 8(1), pages 46-70, March.
    17. Rehman, Faiz Ur & Nasir, Muhammad & Shahbaz, Muhammad, 2017. "What have we learned? Assessing the effectiveness of counterterrorism strategies in Pakistan," Economic Modelling, Elsevier, vol. 64(C), pages 487-495.
    18. Subhayu Bandyopadhyay & Todd Sandler & Javed Younas, 2011. "Foreign aid as counterterrorism policy," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 423-447, July.
    19. Justin George & Todd Sandler, 2021. "EU Demand for Defense, 1990–2019: A Strategic Spatial Approach," Games, MDPI, vol. 12(1), pages 1-18, February.
    20. Todd Sandler & Daniel G. Arce & Walter Enders, 2011. "An Evaluation of Interpol's Cooperative-Based Counterterrorism Linkages," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 79-110.

    More about this item

    Keywords

    proactive counterterror and lobbying; drones; unilateral Nash equilibrium; politically influenced Nash equilibrium; welfare efficiency;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:93884. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna Oates (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.