Homeland Security Cost-Benefit Analysis

Friday, July 25th, 2008

Bruce Schneier looks at John Mueller’s homeland security cost-benefit analysis, titled The Quixotic Quest for Invulnerability: Assessing the Costs, Benefits, and Probabilities of Protecting the Homeland:

The premises:
  1. The number of potential terrorist targets is essentially infinite.
  2. The probability that any individual target will be attacked is essentially zero.
  3. If one potential target happens to enjoy a degree of protection, the agile terrorist usually can readily move on to another one.
  4. Most targets are “vulnerable” in that it is not very difficult to damage them, but invulnerable in that they can be rebuilt in fairly short order and at tolerable expense.
  5. It is essentially impossible to make a very wide variety of potential terrorist targets invulnerable except by completely closing them down.

The policy implications:

  1. Any protective policy should be compared to a “null case”: do nothing, and use the money saved to rebuild and to compensate any victims.
  2. Abandon any effort to imagine a terrorist target list.
  3. Consider negative effects of protection measures: not only direct cost, but inconvenience, enhancement of fear, negative economic impacts, reduction of liberties.
  4. Consider the opportunity costs, the tradeoffs, of protection measures.

Here’s the abstract:

This paper attempts to set out some general parameters for coming to grips with a central homeland security concern: the effort to make potential targets invulnerable, or at least notably less vulnerable, to terrorist attack. It argues that protection makes sense only when protection is feasible for an entire class of potential targets and when the destruction of something in that target set would have quite large physical, economic, psychological, and/or political consequences. There are a very large number of potential targets where protection is essentially a waste of resources and a much more limited one where it may be effective.

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