Security Spending Research Articles

Guns and crime revisited

I focus on the effect of changes in public security (policing) on private security measures that potential victims can take. In particular, I look at the tradeoff between different types of private security measures – such as using or carrying guns, carrying less cash or keeping less valuables at home, and using burglar alarms or Lojack – and study how this tradeoff is affected by changes in public security. If private householders’ direct security expenses are strongly substitutable with public policing (e.g., for guns which may be more useful in badly policed areas), an increase in policing results in a drop in these expenses; it also results in carrying or keeping less cash (an indirect security measure which reduces the prize a criminal can seize). If, however, householders’ direct security expenses are “complementary” to policing in the sense that they are more effective when police response is rapid (e.g., for burglar alarms), more policing increases these expenses unless the efficacy of joint (public and private) security expenses on combating crime encounters very sharply diminishing returns; moreover, a rise in policing also induces carrying or keeping more cash. An increase in penalties increases the tendency to keep cash on hand, and also reduces crime, provided that as private precautions increase, with policing constant, it takes a larger increment in security spending to compensate for a specific drop in penalties. The results are consistent with some empirical trends in crime rates, policing, penalties and private precautions.

Market Impact on IT Security Spending

ABSTRACTTraditionally, IT security investment decisions are made in isolation. However, as firms that compete for customers in an industry are closely interlinked, a macro perspective is needed in analyzing these decisions. We utilize the notions of direct‐ and cross‐risk elasticity to describe the customer response to adverse IT security events in the firm and competitor, respectively, thus allowing us to analyze optimal security investment decisions. Examining both symmetric and asymmetric duopoly cases using a continuous‐time Markov chain (CTMC) model, we demonstrate that optimal IT security spending, expected firm profits and willingness of firms to cooperate on security improvements are highly dependent on the nature of customer response to adverse events. We also examine the investment problem when security attacks on different firms are correlated.

Consequências individuais e socioeconômicas da síndrome da apneia obstrutiva do sono

A Síndrome da Apneia Obstrutiva do Sono (SAOS) é definida como a obstrução da passagem de ar pelas vias aéreas superiores durante o sono. Acontecem episódios repetidos de hipoxemia e hipercapnia, e com eles o sono torna-se superficial e fragmentado, resultando em distintas complicações ao indivíduo e à coletividade. O objetivo deste estudo foi revisar a literatura quanto às consequências individuais, econômicas e sociais causadas pela SAOS. Identificaram-se diversas complicações da SAOS relacionadas ao indivíduo: (1) alterações físicas e comportamentais: sono excessivo, fadiga, ansiedade, irritabilidade, depressão, redução da libido, diminuição da qualidade de vida, astenia, consequências metabólicas (ganho de peso, diabetes e dislipidemia) e cardiovasculares (hipertensão arterial sistêmica, aterosclerose e doença coronariana); (2) disfunção neurocognitiva: déficits de atenção, percepção, memória, raciocínio, juízo, pensamento e linguagem. Quanto à relação da SAOS e repercussões socioeconômicas, tem-se: (1) aumento do número, proporção e gravidade de acidentes automobilísticos devido à diminuição da concentração do motorista; (2) prejuízos ocupacionais com queda na produtividade, demissões e acidentes de trabalho; (3) prejuízo social: o individuo com SAOS representa também um perigo potencial para toda a sociedade por aumento de imperícias; (4) aumento de gastos públicos e privados: manutenção de rodovias e estrutura de fiscalização e apoio, gastos previdenciários, custos diagnósticos, terapêuticos e hospitalares. A SAOS deveria ser considerada uma doença de saúde pública, dados seus inequívocos prejuízos individuais, sociais e econômicos. Políticas específicas deveriam ser implementadas visando à redução do impacto dessas consequências.

The cyclicality of education, health, and social security government spending

We use a panel of developed and emerging countries for the period 1970 to 2008 to assess the cyclicality of education, health and social security government spending. We mostly find acyclical behaviour, but evidence also points to counter-cyclicality for social security spending, particularly in OECD countries, consistent with the operation of automatic stabilizers.

A Vector Error Correction Modeling of Security Spending and Economic Growth in Nigeria

The study has been on the impact of security expenditure on the level of economic growth in Nigeria. Using data covering the period between 1980 and 2010, the ECM result shows that the expenditure on defence has a negative impact on the level of economic growth. An indication of flawed expenditure budgeting and implementation in the defence sector. Expenditure on internal security played important role in generating the desired level of economic growth in Nigeria. The low elasticity indicates that the significance was below expectations. The result of the variance decomposition shows that the shocks to expenditure on defense did not significantly explain the changes in the level of economic growth in Nigeria. Expenditure on internal security however played a role in influencing the level of economic growth in Nigeria. The result of the Johansen cointegration test shows a long run relationship among the variables and the error correction result shows a satisfactory speed of adjustment. It is thus recommended that government should reassess the content of her defense expenditure and make it more transparent and growth oriented.

Security Challenges and Security Votes in Nigeria ( 2008 - 2013 )

Nigeria has joined the league of countries that are known to spend a good chunk of their budgetary allocation on security. As a result of these challenges, Nigerian leaders have decided to tackle them by raising her defence and security votes. Nigeria ranks 57 in the global rating on military expenditure. It occupies the seventh position in African while it is regarded as the largest spender in the West African sub-region. The ranking was based on Nigeria's military expenditure in 2009, which also made her the seventh largest spender on the African continent. The country spent $1.864 billion or N233 billion in 2009, representing 0.90 percent of the Gross Development Production (GDP). Defence is a critical sector and has enjoyed favourable consideration in funding, especially in recent years. For instance, the sector got N264 billion in 2010 and this rose to N348 billion in 2011 budget. Unlike other sectors of the economy, military expenditure in Nigeria has gone up by over 50 percent compared to other sectors in recent times. It is anybody's guess why budget allocations in key ministries and agencies especially security and defence has continued to get the lion's share in the last few years. But analysts however wager that the rising budget spending for security over the years could have been influenced by a constellation of forces. For instance, in 2008, the policy thrusts of the budget as presented by the late President Umaru Yar'Adua to the legislature on November 8, 2007, was supposedly reflected in N444.6 billion for security and the Niger It would appear that the mega figure was aimed at political correctness and possibly intended to show new commitment heights for security and the development needs of the Niger Delta. Apparently justifying the need for the bogus budget, analysts at the time said perhaps, it was also intended to signal to the international community that Nigeria is sparing no expenditure in ensuring peaceful co-existence among the citizenry and the interest of the businesses. The paper concludes that despite rising budget allocations for defence and security in the last five years Nigerians have not received value for their money.

Northeast Asia’s Aging Population and Regional Security

Fast aging in Northeast Asia has significant implications for the geopolitics and security dynamics of the region. The long-term impact of graying populations and substantial increases in social security spending might limit the regional arms race. By 2030, Japan, South Korea, and China will become too old for military rivalry.

Afghanistan: Balancing Social and Security Spending in the Context of Shrinking Resource Envelope

For Afghanistan, the dual prospect of declining donor support and high ongoing security spending over the medium term keeps the government budget tight. This paper uses a general equilibrium model to capture the security-development tradeoff facing the government in its effort to rehabilitate macroeconomic stability and welfare. In particular, it considers strategic policy options for counteracting and minimizing the negative macroeconomic impact of possible aid and revenue shortfalls. We find that the mobilization of domestic revenues through changes in tax policy is the preferred policy response for Afghan central government. Such a response helps to place its finances on a sustainable path and preserve most of the growth potential. Cutting expenditures balances public finances, but causes the economy to permanently shrink. Debt financing helps to preserve much of the economy size but can jeopardize the sustainability of public finances.

Afghanistan: Balancing Social and Security Spending in the Context of Shrinking Resource Envelope

For Afghanistan, the dual prospect of declining donor support and high ongoing security spending over the medium term keeps the government budget tight. This paper uses a general equilibrium model to capture the security-development tradeoff facing the government in its effort to rehabilitate macroeconomic stability and welfare. In particular, it considers strategic policy options for counteracting and minimizing the negative macroeconomic impact of possible aid and revenue shortfalls. We find that the mobilization of domestic revenues through changes in tax policy is the preferred policy response for Afghan central government. Such a response helps to place its finances on a sustainable path and preserve most of the growth potential. Cutting expenditures balances public finances, but causes the economy to permanently shrink. Debt financing helps to preserve much of the economy size but can jeopardize the sustainability of public finances.

Comparison of the Effects of Public and Private Health Expenditures on the Health Status: A Panel Data Analysis in Eastern Mediterranean Countries

Health expenditures are divided in two parts of public and private health expenditures. Public health expenditures contain social security spending, taxing to private and public sectors, and foreign resources like loans and subventions. On the other hand, private health expenditures contain out of pocket expenditures and private insurances. Each of these has different effects on the health status. The present study aims to compare the effects of these expenditures on health in Eastern Mediterranean Region (EMR). In this study, infant mortality rate was considered as an indicator of health status. We estimated the model using the panel data of EMR countries between 1995 and 2010. First, we used Pesaran CD test followed by Pesaran's CADF unit root test. After the confirmation of having unit root, we used Westerlund panel cointegration test and found that the model was cointegrated and then after using Hausman and Breusch-Pagan tests, we estimated the model using the random effects. The results showed that the public health expenditures had a strong negative relationship with infant mortality rate. However, a positive relationship was found between the private health expenditures and infant mortality rate (IMR). The relationship for public health expenditures was significant, but for private health expenditures was not. The study findings showed that the public health expenditures in the EMR countries improved health outcome, while the private health expenditures did not have any significant relationship with health status, so often increasing the public health expenditures leads to reduce IMR. But this relationship was not significant because of contradictory effects for poor and wealthy peoples.

Should there be Specific Policies to Protect the Welfare of Older People in Britain?

Older people have always been a major focus for social policy and because the UK is an ageing society, their importance to the subject is likely to increase further. Like other modern welfare systems, the British welfare state originated in pension provision for older people and totally this group are the main users of the health and social services and the main recipients of social security spending. Compared with unemployed people and lone parents, older people are often viewed as a group that “deserves” specific social policy and especially, social security. However, it is sometimes said that the true test of a civilized society is how it treats its older and vulnerable groups. Despite this group's position as one of the most deserving of welfare, there are still widespread awareness of the many negative images of old age. In common with other western societies, Britain is a country in which age discrimination, or ageism, is widespread (Alcock et al, 2006).

Can spending on information security be justified?

PurposeThe purpose of this paper is to investigate the optimality of various strategies for spending on information security. Being able to understand the strengths and weaknesses of spending strategies is useful to organizations.Design/methodology/approachThe author's analysis begins with a whole‐systems view of the security spending decision that encompasses people, technology, and economics and a taxonomy of justifications is presented for spending on information security. Each justification within the taxonomy is discussed, with that analysis used to examine the apparent rationality of a number of common spending strategies. A model is constructed that can be used in a practical manner to enable an organization to select a rational approach to spending on information security.FindingsThe author describes two spending strategies intended to be simple and straightforward for an organization to employ in a practical manner. These strategies account for a number of weaknesses in common justifications for spending on information security. They also take into consideration the observation that a number of pressures push companies towards inefficiency in their spending.Originality/valueWhen faced with budgeting decisions, managers are bound by fiduciary duty to identify those investments that will maximize shareholder value. As such, decisions about spending must be carefully considered and evaluated in rational economic terms. This paper provides useful thinking on this important topic.

Long-Term Fiscal Projections: Assessing Sustainability in the United Kingdom

Stephen Miners enriches the set of variables affecting fiscal sustainability by considering not only demographic trends but also factors such as medical technology and nuclear decommissioning. He focuses on the UK budget and compares the results obtained with long-term projections produced in the framework of the Code for Fiscal Conduct with those obtained with generational accounting exercises and with other estimates carried out for the UK by international organisations. Despite the different approaches and assumptions, all studies seem to agree that the UK is not facing significant long-term sustainability problems. While the UK is in a stronger position than most countries with respect to demographic trends, the author argues that the positive results of sustainability tests for the UK also reflect the recent implementation of measures designed to control the risks of unsustainable demand for social security and health spending.

Social security and economic performance in Portugal: after all that has been said and done how much has actually changed?

This paper provides an empirical estimate of the macroeconomic effects of the Portuguese pay-as-you-go social security system based on data for the period 1970–2007 and on VAR estimates using GDP, the unit cost of labor, the unemployment rate, the savings rate and social security spending. The major findings are twofold. First, growing social security spending has had detrimental effects on all of the private sector variables under consideration suggesting the existence of sizable inefficiencies. Second, these inefficiencies persist despite the successive reforms that took place over the last two decades. These results highlight the need for structural reforms of the pay-as-you-go system thereby addressing the sources of these inefficiencies, regardless of whether or not the system is financially sustainable. Furthermore, any reforms designed to address sustainability concerns cannot ignore these inefficiencies or risk making them even worse and thereby hindering the quest for sustainability itself.

The European Debt Crisis and American Security Policy

The European Union (EU) is building the institutional capability to play a larger role in global security affairs and there is an acknowledged need for it to develop improved power projection capabilities if it is going to engage in the full range of crisis management tasks. European militaries, however, are for the most part still in the process of transforming themselves from static defense forces into deployable units that are useful for the sort of crisis management missions in which the EU envisages itself playing a larger (and more independent) role in the future. In doing so, Europeans will encounter distinct costs that have only been partially dealt with to date. We should not discount the progress that has been made in pooling assets as a way to manage the costs of European ambitions, but there are near-term and long-term trends that will significantly impact European spending on defense and foreign affairs. In the near term, there is the on-going sovereign debt crisis in the Eurozone that has obvious implications for spending across the board. Yet, even if this is solved in a relatively painless manner, there is a more consequential long-term demographic trend in Europe that will impact spending for security and defense for many years to come. The consequences of Europe's fiscal difficulties for the United States' economy are self-evident, but there are security consequences to consider as well. Although it is easy to dismiss European militaries for their relatively small contributions to North Atlantic Treaty Organization (NATO) and US-led military operations, those militaries compose the vast majority of the assistance the United States has received in global military operations since the end of the Cold War. A rapid decline in the ability of European states to fund their militaries would mean that the United States would be faced with conducting future operations without significant contributions from the militaries with which it has developed 60 years of standardization and coordination through the NATO alliance. Even more of the burden of global security operations would be shifted onto the United States while it is attempting to cut defense spending and modernize aging weapons systems and platforms. European miltary contributions to NATO and US-led operations are modest, but they do add up. In Afghanistan, for example, the member states of the European Union contribute approximately 35,000 of the 130,000 forces in the country. (1) European partners supply close to 90 percent of all non-US forces in the country with most of the remainder supplied by Australia and non-EU allies such as Turkey. In other words, European militaries supply a number of boots on the ground roughly equal to forces in the surge implemented by the United States in 2010. If European defense budgets continue to collapse and those states are no longer capable of their current level of contributions to ongoing operations, the United States armed forces will be stretched further than they currently are and lose a degree of strategic flexibility in terms of a surge capacity that has been employed with limited success in both Iraq and Afghanistan. The ability of European states to manage the effects of the dual storm of the financial crisis and the long-term demographic shift on their military capabilities will be determined by two factors. First, their ability to shift funds within existing defense budgets away from personnel and toward operations and procurement. Second, their ability to manage the process of base closures across Europe as a whole and rationalize their defense infrastructure on a European rather than a purely national basis. This is a process that is far more likely to occur within the context of the European Union and the Common Foreign and Security Policy (CFSP) rather than in a NATO context because of the higher public popularity of the CFSP in Europe compared to public enthusiasm for the tranatlantic alliance. …

The Truth about Social Security and Medicare

In their book Aging Nation, Schulz and Binstock (2006) identified “merchants of doom,” by whom they meant a variety of academics, political figures, and journalists who argued that the United States cannot afford “the aging of our population” (p. 12). Although these individuals are not always consistent and, at times, disagree among themselves, their underlying message is that we face a “fiscal cancer” that “could have catastrophic consequences for our country” (CBS News, 2007; see also Aaron, 2009; Eisner, 1995; Schulz & Binstock, 2006). This message is usually accompanied by recommendations that we shift the cost of social security and Medicare to beneficiaries (Kingson & Altman, 2011). In the wake of the Great Recession and in light of the growing budget deficit, this perspective has become increasingly influential (Samuelson, 2011). Although many merchants of doom are “serious, well-respected individuals,” their views are often “built on exaggerations and faulty assumptions” (Schulz & Binstock, 2006, p. 13). For example, as Gorin (2007) wrote in a previous editorial, Underlying much of the concern about population aging are projected changes in dependency ratios (Gee, 2002). One of the best known of these is the beneficiary-to-covered-worker ratio, which shows the number of social security beneficiaries supported by each 100 workers (individuals ages 20 to 64) (Reno & Lavery, 2006). This ratio is expected to rise from 29 in 2000 to 46 in 2030. Although these figures have generated much alarm, they are somewhat misleading. Specifically, they overlook that older adults are not the only dependent age group. A more sophisticated measure is the total age-dependency ratio, which includes not only older adults, but also individuals under the age of 20 (Reno & Lavery, 2006). This gives us a much different perspective. It shows that we have already experienced the worst of the demographic shifts. In 1960 each 100 working-age people supported 90 dependents (people age 65 and older plus those under age 20); in 2030, they will support only 79. The point, of course, is that although the aging population will increase, there will be many fewer young people than when the boomers were growing up (Schulz & Binstock, 2006). Now, some might argue that we cannot really compare young people with older adults. After all, older adults are supported by government programs funded with tax dollars, whereas children generally receive support from their parents. This is true, but it misses the point. The fundamental issue is our society's ability to support its dependents (Schulz & Binstock, 2006). Parents do support their children, but as taxpayers, they also finance programs that support older adults. Moreover, children are recipients of tax dollars. Public education, which primarily benefits young people, is financed by state and local governments (Reno & Lavery). This is not a negligible expense. Proportionally, the increased spending on public schools to educate the boomers was much greater than the amount that will be needed to support them in retirement. Between 1950 and 1975, the share of gross domestic product (GDP) going to public education increased by 2.8 percent; in contrast, between 2005 and 2030, the share devoted to social security spending will increase by only 1.8 percent (Reno & Lavery). Furthermore, although “the boomers came into the world with nothing” (Leone, 2005), they will leave behind tremendous financial and other resources. The total dependency ratio suggests that the future is not as bleak as the merchants of doom have argued (Schulz & Binstock, 2006). Yet, this ratio is also limited. Like the beneficiary-to-covered-worker ratio, the total age-dependency ratio is too abstract, that is, it considers older adults and young people as categories, not in terms of their actual lives. In reality, some older adults and young people are employed, and some working-age people are not (Reno & Lavery, 2006). A more useful measure is the consumer-to-worker support ratio, which considers the total number of consumers, including working people, in relation to the “number of workers of all ages” (Reno & Lavery, 2006, p. 5). By this measure, in 1960 there were 268 consumers to every 100 workers; in 2030 there will be 214 consumers to every 100 workers. Although the composition of the dependent population will change, the total support burden will be much lower when the boomers retire than it was in their youth. (pp. 165–166)

Intergenerational Implications of Fiscal Consolidation in Japan

In Japan, intergenerational inequality in lifetime resources is substantial, with a heavier fiscal burden on the young than the old. Moreover, given the need for fiscal consolidation, the inequality is even worse than existing policy would suggest. However, this does not mean that fiscal consolidation would make the young worse off. Lack of fiscal consolidation would eventually increase interest rates, which would reduce output and hit young generations harder. Simulations using an overlapping generations model indicate that, from the perspective of intergenerational fairness, it would be desirable to include both social security spending reforms and revenue measures in a fiscal consolidation package. The simulations also show that delaying fiscal consolidation could be costly and worsen intergenerational resource inequality.

The Cyclicality of Education, Health, and Social Security Government Spending

We use a panel of developed and emerging countries for the period 1970-2008 to assess the cyclicality of education, health, and social security government spending. We mostly find acyclical behaviour, but evidence also points to counter-cyclicality for social security spending, particularly in OECD countries, consistent with the operation of automatic stabilizers.

Intergenerational Implications of Fiscal Consolidation in Japan

In Japan, intergenerational inequality in lifetime resources is substantial, with a heavier fiscal burden on the young than the old. Moreover, given the need for fiscal consolidation, the inequality is even worse than existing policy would suggest. However, this does not mean that fiscal consolidation would make the young worse off. Lack of fiscal consolidation would eventually increase interest rates, which would reduce output and hit young generations harder. Simulations using an overlapping generations model indicate that, from the perspective of intergenerational fairness, it would be desirable to include both social security spending reforms and revenue measures in a fiscal consolidation package. The simulations also show that delaying fiscal consolidation could be costly and worsen intergenerational resource inequality.

Cutting social security and tax credit spending

Since being elected in May 2010, the coalition government in the United Kingdom has announced spending cuts that by 2014/15, it is estimated, will save the state £81 billion per annum. It announced the cuts in two exercises – an ‘emergency Budget’ in June 2010 and a Comprehensive Spending Review in October 2010. In this paper we focus on one aspect of the cuts – those related to social security and tax credit spending. The paper examines the scale and nature of the cuts by focusing on the indexation and capping of benefits, making benefits more selective and the fate of contributory benefits in the cuts. The paper argues that the package of cuts to benefits and tax credits represents themes – constraining expenditure by restricting increases in, and the eligibility criteria for, benefits – that are familiar in social security policy. The consequence will be the long-term erosion of the scope and value of social security benefits and tax credits.