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An Economic Analysis of Security Policies

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  • Tilman Brück

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 suitable balance between market and non-market instruments in achieving security should be aimed for 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 itself fraught with enforcement problems.

Suggested Citation

  • Tilman Brück, 2004. "An Economic Analysis of Security Policies," Discussion Papers of DIW Berlin 456, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp456
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    References listed on IDEAS

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    Cited by:

    1. Brauer1, Jurgen & Haywood, Robert, 2010. "Non-state Sovereign Entrepreneurs and Non-territorial Sovereign Organizations," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    2. Michael McBride & Gary Richardson, 2012. "Stopping Suicide Attacks: Optimal Strategies and Unintended Consequences," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(5), pages 413-429, October.
    3. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2010. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," Discussion Papers of DIW Berlin 1049, DIW Berlin, German Institute for Economic Research.
    4. Schneider, Friedrich, 2010. "The (Hidden) Financial Flows of Terrorist and Organized Crime Organizations: A Literature Review and Some Preliminary Empirical Results," IZA Discussion Papers 4860, Institute for the Study of Labor (IZA).
    5. Kollias, Christos & Papadamou, Stephanos & Stagiannis, Apostolos, 2011. "Terrorism and capital markets: The effects of the Madrid and London bomb attacks," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 532-541, October.
    6. Xiao, Fenglong, 2011. "When organization encounters uncertainty in regulatory times," MPRA Paper 36240, University Library of Munich, Germany.
    7. Kollias, Christos & Messis, Petros & Mylonidis, Nikolaos & Paleologou, Suzanna-Maria, 2009. "Terrorism and the effectiveness of security spending in Greece: Policy implications of some empirical findings," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 788-802, September.

    More about this item

    Keywords

    Collective goods; Public policy; Regulation; Risk; Security; Terrorism;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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