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Terrorism Policy Research

Security Decisionmaking in an Age of Catastrophic Terrorism

Background

Even with joint efforts of the government, industry and private citizens, the task of protection represents an enormous challenge since it is not possible to protect all targets perfectly—or anywhere near perfectly. Because the risk of catastrophic terrorism will continue for the indefinite future, governments and private corporations must begin to make complex decisions about how to provide security in light of this threat.

These entities need a structured decisionmaking tool that will allow them to better understand their individual organization's security requirements and what security measures will help them best combat the threats they are facing. However, these entities also need a framework for understanding how decisions about organizational security might aggregate to promote—or undermine—collective security and how organizations might be affected by attacks on public or private infrastructure.

RAND Research Goals

The RAND Center for Terrorism Risk Management Policy is designed to assist public and private decisionmakers to:

• Understand dependencies on critical infrastructure, privately and publicly held, and what the consequences of successful attacks on such infrastructure would be.
• Define 'worry' budgets about vulnerabilities to decide how much to pay for security options and how to allocate security resources more efficiently.
• Combine security measures in portfolios that provide robust protection across the spectrum of potential attack modes and against dynamic shifts in terrorists’ targeting strategies.
• Estimate how risk shifts among targets or attack modes as defenses are increased.
• Explore how the disruption of terrorist activities affects the group's prioritization of targets. Does risk increase to overseas locations, or to less-fortified domestic locations? Does the probability of smaller though more frequent attacks increase?
• Analyze, in the context of possible displacement to other targets, whether to encourage loss-minimization and civil defense preparedness instead of visible fortification.

We plan to examine whether insurance companies might require a certain level of protection at an insured location to secure coverage. Are there realistic approaches to credits and debits for terrorism protection? Besides the underwriting decision and its impact on insurer terrorism risk management, how will such insurer policies affect the security cost-benefit calculations of businesses? To what extent might such approaches improve overall homeland security?

Regardless of whether another attack occurs in the near future, governments and corporations will continue to face difficult decisions about security. The Center will provide a critical platform for assessing the public and private opportunity costs associated with terrorism security.

Equally important, the Center will provide a framework for making security cost-benefit calculations. Since resources are finite, the Center will have a unique and valuable role in helping policymakers and corporate leaders address issues of security.