DEFENSIVE COUNTERTERRORISM MEASURES AND DOMESTIC POLITICS

Abstract

Unlike most of the literature, this paper includes domestic political considerations in which two countries must decide defensive countermeasures against a common terrorist threat. A delegation problem arises as voters strategically choose a policymaker whose preferences differ from their own. As a consequence, countries limit the presumed oversupply of defensive countermeasures. Thus, the inclusion of domestic politics gives a new perspective on counterterrorism. The timing of elections is also shown to make a difference.

Keywords:

• Terrorism
• Externalities
• Counterterrorism
• Delegation problem
• Domestic politics

JEL Codes:

• H41
• D72

ACKNOWLEDGMENTS

This research was partially supported by the US Department of Homeland Security (DHS) through the Center for Risk and Economic Analysis of Terrorism Events (CREATE) at the University of Southern California, grant number 2007‐ST‐061‐000001. However, any opinions, findings, and conclusions or recommendations are solely those of the authors and do not necessarily reflect the views of DHS.

Notes

¹ The second‐order condition is