Quantifying the risk imposed by terrorism and the associated benefit of security policies is daunting and complicated. And yet this knowledge is vital for making informed policy decisions and maximizing the impact of the allocation of limited resources. Dr. Carol Mansfield and Professor V Kerry Smith discuss their ground-breaking research into the benefit-cost analysis of security policies.
In less than a day, the Paris attack triggered debate in the U.S. about budgets for security. Similar political debates are taking place in Europe. Everyone involved knows there will never be sufficient resources to guarantee safety. Indeed, free societies face many other important challenges that are also threats to their populations – improving health care, reducing poverty, expanding educational opportunities, protecting the environment, and many more. Policy-makers must make choices. To do so, they must gauge public needs and the costs to respond to them. Cost-benefit analyses provide the tools to address this need. Until recently, security policy has been left out of the cost-benefit discussion. We know little about how to systematically evaluate the benefits of these policies. We all want to maintain a secure homeland, but what is most important in doing that?
One of the U.S. Department of Homeland Security’s university research centers, CREATE, at the University of Southern California, has addressed this omission by sponsoring a research program to determine whether it is possible to evaluate security policies in a benefit-cost framework. Our new book Benefit-Cost Analyses for Security Policies provides an up-to-date summary of what has been learned from more than five years of research. It brings together a collection of the world’s experts in best-cost analyses to outline the issues in doing these analyses and evaluate how to improve them.
Events like the attack in Paris create fear and can cause people everywhere to be concerned about the safety of their everyday lives. Policy needs to be framed around activities that address the sources for the fear – reducing both the risk and consequences of terrorism – with a recognition of the need to also balance the costs to the public. There are important differences in the ways that policy can be designed and in the methods used to evaluate them! Any new policy can be expected to induce responses from those people responsible for terrorism. Their actions will adapt to new security measures in ways that reduce the effectiveness of the security measures.
This adaptive response on the part of those committing terrorist acts means the standard methods of risk assessment do not fit these situations. Equally important, the risks are not well understood by the general public. They seem diffuse and frightening to many people. At the same time, the costs of the policies and impact they have on people and businesses have not always been carefully articulated in the evaluations of the net implications for the public. Finally the public sector needs to continuously respond to new threats and to the effectiveness of existing policies –changing in response to both.
The research reported in our book outlines an architecture for the analysis of security policy. It describes what can be learned from past evaluations of other policies where analysts also had to grapple with situations where the policy affects broad, seemingly intangible services such as the environment. It uses specific examples of past policy evaluations and new methods to evaluate the choices people would make to reduce specific threats.
Security risks are different but not impossible to evaluate. Private and public responses can inform how future policies are evaluated. This volume describes where we stand, what it means for current practice, and outlines what is needed to improve these methods.
Dr Carol Mansfield works is a senior economist at RTI International. She has extensive experience with survey-based data collection for preference elicitation and exposure analysis, including instrument design, management, and statistical analysis of the responses. Dr. Mansfield has managed numerous multi-disciplinary teams researching environmental health and natural resource management policies. Before joining RTI, Dr. Mansfield was an assistant professor in the Duke University Nicholas School of the Environment and Earth Sciences.
V Kerry Smith is Emeritus Regents’ Professor and Emeritus University Professor of Economics, Department of Economics, W. P. Carey School of Business, Arizona State University. He is a member of the National Academy of Sciences and a university fellow at Resources for the Future, a non-profit think tank based in Washington, D.C.. He is also a fellow of the Association of Environmental and Resource Economists, and of the American Agricultural Economics Association. Smith came to ASU from North Carolina State, where he was a University Distinguished Professor and the Director of the Center for Environmental and Resource Economic Policy.