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The Journal of Law, Economics, & Policy (JLEP)
and the
GMU National Security Law Society (NSLS)
Presented a Joint Lecture entitled:


"A Law and Economics Perspective of Terrorism"

This Event was held: March 29, 2006



Lecture Series Event Summary
    Kidd opened the discussion by outlining several economic concepts discussed in the paper. The paper demonstrated that if one were to assume the rationality of terrorists, one could find optimal levels of punishment, deterrence, and prevention. “Rational” does not mean that terrorists are necessarily reasonable, rather that terrorists respond to incentives, e.g. the costs and benefits of their actions. However, unlike the “normal ordinary person,” a terrorist may have a completely different set of preferences/incentives

    The paper applies several economic models developed to deter both criminal and terrorist behavior. For instance, because terrorists may place a lower value on their own life than the average criminal, the threat of the death penalty does not hold the same deterrent value. The paper proposes an alternate approach to deter terrorist actions: the imposition of communal liability as in corporate crime deterrence models. Under this regime, both the terrorists as well as the people who knowingly sponsored them or who had ex ante knowledge of their terrorist plots would be liable. This may serve to deter the terrorists, and to provide incentives to those people who have information regarding an attack.

    Bowman commented that although it might be interesting to apply the approaches discussed in the paper with certain terrorists groups, he cautioned that from the FARC in Colombia, the IRA in Ireland, to Al-Qaeda worldwide, there is a great deal of variation in the way that groups operate. Furthermore, many terrorists are not group-oriented but rather operate individually or in pairs. Such an individual or small team might not act rationally and may not be influenced by a threat of group liability. Thus, Bowman cautioned against using one law and economics model to deal with all terrorist activity.

    Dubois observed that it might not be relevant as to whether or not the individual terrorist is rational, so long as the infrastructure around the terrorist is reasonably rational. Dubois stated that if one were to attack the terrorists’ infrastructure with the proposed model, one could reach an “80% solution” to the terrorist problem. However, this approach requires a deep understanding of the supporting infrastructure for terrorists, including their link with organized crime, which many times serves as a source of funding. By cutting off their source of funding, it would set a budget constraint on terrorists, thus forcing them into a rational model.

    Judge Sentelle believed that, in any case, the law and economics model is not a viable approach when applied to crime because it is too theoretical. He stated that criminals, in general, do not operate from rational incentives; a criminal does not weigh the possible penalty versus the possible benefit prior to committing the crime. Moreover, Judge Sentelle stressed that it would be very difficult to understand the incentives of terrorists as they are so different from ours. He also noted that communal liability might not be effective in preventing terrorist attacks because many terrorists do not tell family members of their plans to be suicide bombers- only a select few in the terrorist organization even know of such plans. He proposed that the use of traditional law enforcement techniques, particularly covert infiltration, would yield higher success rates in preventing terrorism. However, he agreed with Dubois' proposition that a law and economics model could be a partial solution if it targeted terrorists’ infrastructure and sources of funding.

    Furthermore, the panel also addressed issues such as the role of technology, domestic and international cooperation between intelligence and law enforcement agencies, the waiver of privacy rights for financial incentives as well as the definition of terrorism.

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