A Framework for Evaluating Counterterrorism

Regulations

Jerry ElligSenior Research Fellow, Mercatus Center

Amos GuioraDirector, Institute for Global Security Law and

PolicyCase Western Reserve School of Law

Kyle McKenzieResearch Fellow, Mercatus Center

What can an analytical framework do?

Regulatory analysis identifies cause and effect

Regulatory analysis cannot automate the decision

… Or, in Plain English:

1. Figure out what you’re trying to do and how you’ll know you did it

2. Figure out why government needs to do it

3. Figure out what level of government needs to do it

4. Think about different ways to do it and find the most effective one

5. Figure out what you have to give up to do whatever you’re trying to do

6. Weigh the pros and cons

When to do the analysis?

Prospective: Compare a variety of alternatives that are intended to accomplish the same goal

Prospective: Assess a particular proposed regulation

Retrospective: Assess a set of regulations that are intended to accomplish the same goal(s)

1. Outcomes

Benefit to the public produced, or harm avoided, as a result of government action

Activities, outputs, expenditures, laws, programs, and regulations are not outcomes

Measure regulation’s effect on outcomes and verify causality

1. Identify the Desired OutcomesNot Outcomes

Number of information analysis productsNumber of information analysis community member organizations with which the Information Analysis and Infrastructure Protection (IAIP) Directorate is integratedDevelopment and support of a cyber security test bedPercent of worldwide US destined containers processed through Container Security Initiative portsNumber of cyber security work products disseminatedNumber of Researchers Supported

1. Identify the desired outcomesOutcomes

Maritime injury and fatality index (five-year moving average of maritime deaths and injuries)

Number of firefighter injuries and civilian deaths from fire

Percentage of Secret Service protectees who arrive and depart safely

Number of criminal and terrorist attacks initiated from aircraft

where at least one air marshal was present

2. Market failure: Voluntary action provides less security than people are willing to pay for Public Goods

Externalities

Imperfect Information

Monopoly

Likely

Likely

Maybe

Unlikely

2. Assess evidence of market failure

“First, do no harm.”

But also: Understanding why there is a problem will lead to an effective solution

E.g., airline security and incentives facing airports

3. Identify the core federal role What is the federal government’s

“comparative advantage”?

When do states or localities have inadequate incentives to provide security?

Where does the federal govt. have better knowledge, and where do other levels have better knowledge?

3. Identify the core federal role

Evacuation plans (state)

Border security (federal)

4. Assess effectiveness of alternatives Government action by government personnel

Command and control regulation

Performance-based regulation

Mandated information disclosure

Ex post liability

What counts as an alternative? Agencies often consider tweaks on same

basic regulation

Congress often constrains agency flexibility

Decisionmaker (agency or Congress) has responsibility for doing the analysis

4. Assess effectiveness of alternative approaches

Pre – 9/11 Security contractors

Post – 9/11 Federalized screening

Post – 9/11 Screening contractor pilot programs

5. Costs

Federal expenditures

Non-federal expenditures

Price effects Pass-through of costs Deadweight loss

Quality effects

Behavioral changes

5. Identify CostsTSA Budget

$4.3 billion (2005)

Dead Weight Loss

Increased Waiting Time

Increased fatalities due to substitution from flying to driving

$2.35 billion (2005)

$2.76 billion (2005)

116 individuals (4th Quarter 2002)

6. Compare costs with outcomes Cost effectiveness

Cost-benefit

Breakeven

Note: None of these make the decision automatic!

6. Compare costs with outcomes

Regulatory Analysis in Plain English1. Figure out what you’re trying to do and how you’ll

know you did it

2. Figure out why government needs to do it

3. Figure out what level of government needs to do it

4. Think about different ways to do it and find the most effective one

5. Figure out what you have to give up to do whatever you’re trying to do

6. Weigh the pros and cons