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Thinking Rationally About Homeland Security

Well thanks to nadezhda and praktike, I'm goaded into reading this excellent post by Dan Drezner discussing prospect theory and homeland security measures. I have to say up front, I've never heard of prospect theory previous to this post, perhaps because I really never studied economics before. But the implications of using this risk-based human behavior theory to emergency preparedness and response is really interesting.

First things first - praise and adulation to Benjamin Friedman for his article in Foreign Affairs on the topic of debunking homeland security myths.

¡°All Americans Should Fear Terrorism¡± That¡¯s ridiculous. The odds of dying in a terrorist attack are minuscule.

¡°Terrorists Can Strike Any Place, Any Time, with Any Weapon¡± Unlikely. This assertion is the guiding principle of our homeland security strategy, yet it ignores probability.

¡°Terrorists Will Attack Soft Targets as ¡®A¨CList¡¯ Targets Become More Secure¡± Not necessarily. This claim is made repeatedly in the pages of the 2002 National Strategy for Homeland Security¡ªwithout any supporting evidence.

¡°America Is Doing Far too Little to Protect Its Ports¡± Hardly. More than $600 billion in goods and nearly 50 percent of U.S. imports flow through American ports each year. U.S. ports are vulnerable to both weapons smuggled into the United States in containers and U.S.S. Cole¨Cstyle attacks on ships. But there is little indication such attacks are likely.

¡°Corporations Should Spend More on Security¡± False. The odds of any one business in the United States being attacked by terrorists are vanishingly small.

¡°Terrorists Will Soon Mount a Crippling Cyberattack¡± Nonsense. Cyberattacks are costly and annoying, but they are not a threat to U.S. national security.

¡°Al Qaeda Remains the Largest Threat to U.S. Homeland Security¡± Wrong. The organization bin Laden continues to run from Afghanistan or Pakistan is on the ropes. Today, the main threat to the United States comes in the form of extremist entrepreneurs with only tenuous links to bin Laden and from other Sunni terrorist groups.

Where Dan pulls it together is how he notes a prospect theory paper observes that this model can explain why people are irrational when faced with making decisions with risk. The paper states that people will consider choices as adjustments to their current wealth from their personal perspective. They tend to be risk adverse toward potential gains and risk seeking toward potential losses. Second, people overweight unlikely events and underweight likely events when assigning probabilities to alternatives. Last, the manner in which alternatives are persented can irrationally influence the choices made.

This may sound like common sense, but the paper has the math and research to back these observations. Technical stuff, but I've seen it in action. OSD Policy beats up on the military services and their research and development efforts for ignoring "next-generation" CB warfare agents that haven't been developed or used yet - their justification being "if you can't accept the consequences of a potential attack, then you must invest in solutions now." Meanwhile, we're still working on developing countermeasures to current CB warfare agents, let alone IEDs and other more likely threats. So end result, given the opportunity to add $1 billion to new CB defense efforts last year, OSD funds basic research for improbable future threats instead of buying needed equipment for current threats. Where's the logic?

This post and its related articles should be read by anyone in emergency response, homeland security, or CB defense programs. We SMEs in these areas tend to be more technological focused, but it's these public policy discussions that really influence success and failure in future military combat/terrorist response scenarios.