Study Weighs Costs of Anti-Terrorism Fight

Since 9/11, annual global spending to combat terrorism has increased by about $70 billion, but according to a new study led by UT Dallas economist Todd Sandler, governments have gotten very little in return.

Sandler worked with Daniel Arce, also an economist from the UT Dallas School of Economic, Political and Public Policy, and Walter Enders from the University of Alabama, to compute the cost benefits for five approaches used to fight transnational terrorism.

Their calculations accounted for changes in GDP, the value of lives lost or injured, the costs of increased homeland security and proactive, offensive measures.

The Copenhagen Consensus studies global problems and priorities.

This study, the first of its kind, was commissioned by the Copenhagen Consensus, an international project to weigh the costs and benefits of different solutions to the world’s biggest problems and to identify whether the current global priorities are the right ones.

The research found that increasing homeland security worldwide by 25 percent resulted in a payback of about 30 cents on a dollar.

Increased offensive measures, like those against the Taliban after 9/11, had a payback of 8 to 12 cents on a dollar.  The biggest benefits came from increased cooperation among police forces and governments.  This approach paid back $5 to $15 per dollar spent, depending on cost assumptions.

“The most effective solutions are the cheapest, but they must overcome the greatest obstacles that require either greater international cooperation or more sensitive and farsighted policymaking,” said Dr. Sandler, who is the Vibhooti Shukla Professor of Economics and Political Economy at UT Dallas.

Sandler will present the study’s findings at the 2008 Copenhagen Consensus May 26 and 27.  He will join colleagues from Harvard, Oxford and Cornell, and more than 55 international economists, including four Nobel laureates, in addressing 10 of the world’s biggest challenges and assessing more than 50 solutions.

Sandler will argue that global priorities in combating terrorism need to be rethought.  “There’s no panacea for terrorism, and that’s scary, but we shouldn’t allow fear to distract us from the best ways to respond to this threat,” said Sandler.