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Defense R&D In The Anti-Terrorist Era

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  • Manuel Trajtenberg

Abstract

This paper analyzes the terrorist threat following 9/11, and explores its implications for defense R&D. First, it reviews the composition of defense R&D since 9/11: big weapon systems still command 30% of defense R&D spending (legacy of the Cold War), vis-a-vis just about 13% for intelligence and anti-terrorism. The second part examines the nature of the terrorist threat, and develops a simple model of terrorism, cast in a nested discrete choice framework. Two strategies are considered: fighting terrorism at its source, and protecting individual targets, which entails a negative externality. Intelligence emerges as the key aspect of the war against terrorism and, accordingly, R&D aimed at enhancing intelligence capabilities is viewed as the cornerstone of defense R&D.

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  • Manuel Trajtenberg, 2006. "Defense R&D In The Anti-Terrorist Era," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 177-199.
    • Handle: RePEc:taf:defpea:v:17:y:2006:i:3:p:177-199
    DOI: 10.1080/10242690600645076
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    1. Oren Setter & Asher Tishler, 2006. "A Brave Leap Or A Gradual Climb? The Dynamics Of Investment In R&D Of Integrative Technologies," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 201-222.
    2. Hausken, Kjell & Bier, Vicki M., 2011. "Defending against multiple different attackers," European Journal of Operational Research, Elsevier, vol. 211(2), pages 370-384, June.
    3. Konstantinos Sioumalas-Christodoulou, 2021. "Exploring the Intellectual Capital of a High Tech Industry: A Case Study of the Scientific Outputs of Defence Firms," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(3), pages 69-85.
    4. Kjell Hausken & Jun Zhuang, 2011. "Governments' and Terrorists' Defense and Attack in a T -Period Game," Decision Analysis, INFORMS, vol. 8(1), pages 46-70, March.
    5. Hart, David M., 2009. "Accounting for change in national systems of innovation: A friendly critique based on the U.S. case," Research Policy, Elsevier, vol. 38(4), pages 647-654, May.
    6. Manuel Trajtenberg, 2006. "Defense R&D In The Anti-Terrorist Era," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 177-199.
    7. Berman, Eli & Laitin, David D., 2008. "Religion, terrorism and public goods: Testing the club model," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 1942-1967, October.
    8. Jenelius, Erik & Westin, Jonas & Holmgren, Åke J., 2010. "Critical infrastructure protection under imperfect attacker perception," International Journal of Critical Infrastructure Protection, Elsevier, vol. 3(1), pages 16-26.

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    More about this item

    Keywords

    Terrorism; Defense R&D; Public goods; Intelligence; Dual-use;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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