Responding to Threats of Terrorism: How the Law Can Generate Appropriate Incentives

Abstract

A law-and-economics framework of analysis is adopted to assess the likely effectiveness of counter-terrorist regulatory measures. The analysis suggests that ex post deterrence measures are likely to be less cost-effective than ex ante preventative measures, and, among the latter, controls restricting access to weapons and increasing security at potential targets are likely to be more cost-effective than those restricting the movements of suspected individuals.

Keywords: terrorism, deterrence, regulation

JEL Classification: H56, K14, K29