Terrorism, biosecurity and endogenous risk

Abstract

Bioterrorism and infectious disease are biosecurity threats that can be modelled as biological invasions (e.g. alien species), incorporating the concept of endogenous risk from the environmental economics literature, i.e. that human behaviour may alter, deliberately or unintentionally, the likelihood and severity of these threats. Application of this modelling approach to investment strategy in pre-event, biosecurity readiness yields efficiency conditions for optimum allocation of expenditure between prevention and preparation for emergency response to bioterrorism and to infectious disease, which may occur individually or jointly. Model results provide a unified framework for interpreting empirical studies and deriving broad policy implications, such as the optimal investment in prevention vs. preparedness strategies. The threat of biological attack can also be analysed within the broader context of transnational terrorism. A model of compound lotteries helps illuminate the trade-off between investment in pre-emptive counterterrorism activities and investment in defensive anti-terrorism programmes, especially when terrorists can make strategic substitutions among targets and modes of attack, including use of biological agents. In combination, the endogenous risk and terrorism lottery models support a biosecurity investment strategy that favours enhancing public health capacity in prevention (e.g. medical surveillance) and strengthening pre-emptive counterterrorism capability.