Estimating Terrorism Risk
The United States Senate and House of Representatives have been unable to reach a compromise on a new formula for distributing homeland security grants to state and local governments. A timely RAND Corporation report, which was just released and titled Estimating Terrorism Risk, examines several challenges to the risk-based allocation of homeland security resources.
Ideally, the Department of Homeland Security's goal should be to allocate funds where they can most effectively reduce terrorism risk—rather than simply spending money in areas facing the greatest risk. This requires knowing the cost effectiveness of homeland security investments, but the development and evaluation of metrics for most homeland security initiatives has only recently begun. Nevertheless, until cost effectiveness is appropriately measured, it is logical to allocate some or all such funds in proportion to risk.
While many people agree that homeland security funds should reflect the magnitude of risks to which different metropolitan or other areas are exposed, no consensus has emerged on how this might best be accomplished. The RAND report demonstrates how event-based models can be used to calculate the expected annual consequences of terrorism. Event-based models are built upon detailed analysis of specific attack scenarios. They provide a method for judging how threat, vulnerability, and consequences affect terrorism risk in specific locales. Using this approach could provide important insights into questions like: “How are current programs reducing risk?” and “When and where may new terrorist risks be emerging?”
It is impossible to predict future terrorist events. Given that fact, if risk estimates are to help in guiding how homeland security funds are distributed, inaccurate calculations could mean that some communities may not receive adequate funding to guard against a possible attack. To reduce the potential for underestimating risks, the report demonstrates a method to address the uncertainties inherent in terrorism risk by combining risk estimates that reflect multiple perspectives on terrorism. In this way, homeland security initiatives could be designed to be robust as well as adaptable to the uncertainties of both terrorist events and natural disasters that might occur in the future.
The RAND report makes five recommendations which, if adopted, could help federal officials improve the allocation of scarce homeland security resources: 1) the U.S. Government should consistently define terrorism risk in terms of metrics like expected annual consequences; 2) the Department of Homeland Security (DHS) should seek risk estimators that support robust decision-making by accounting for uncertainty about terrorism risk and variance in preferences for reducing potential human, economic, or other consequences; 3) DHS should use event-based models to assess terrorism risk; 4) until event-based models are more widely used, density-weighted population (population multiplied by population density) is a better simple indicator of risk than population alone; and 5) the U.S. Government should invest resources to bridge the gap between terrorism risk assessment and cost-effective resource allocation policies.
The research presented in the report does not provide a direct assessment of current DHS practice, nor does it endorse any single modeling approach. Rather, it is intended to add information and encourage thoughtful discourse on the rapidly maturing issues of terrorism risk assessment and resource allocation.
Related Congressional Testimony
Henry H. Willis presented testimony on Analyzing Terrorism Risk before the House Homeland Security Committee, Subcommittee on Intelligence, Information Sharing, and Terrorism Risk Assessment on November 17, 2005.
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RECENTLY RELEASED:
A newly released RAND report, titled State and Local Intelligence in the War on Terrorism, examines how state and local law enforcement agencies conducted and supported counterterrorism intelligence activities after 9/11. It analyzes data from a 2002 survey of law enforcement preparedness in the context of intelligence; shows how eight local law enforcement agencies handle intelligence operations; and suggests ways that the job of gathering and analyzing intelligence might best be shared among federal, state, and local agencies.
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