Security spending fails to curb terror toll -study

By Mark Trevelyan, Security Correspondent

LONDON, March 6 (Reuters) - Boosting international police cooperation and increasing aid to developing countries would be far more cost-effective ways to fight terrorism than pouring the money into homeland security, according to U.S. researchers.

A study by three U.S. economists says global spending on homeland security measures, such as intelligence-gathering, checks on air passengers, import inspections and protecting vulnerable infrastructure, has increased by about $70 billion a year since the Sept. 11 attacks on the United States in 2001.

While this has translated into a drop of just over a third in transnational terrorist attacks, it said, the average number of deaths per year has actually risen by 67 as militants responded by seeking deadlier strikes on softer targets.

"Because it is human nature to overspend on unlikely catastrophic events, it is likely that terrorists have succeeded in getting the world to overspend on counterterrorism," said the study by economists Todd Sandler and Daniel Arce of the University of Texas at Dallas and Walter Enders of the University of Alabama.

They said transnational terrorist attacks, on average, kill 420 people and wound 1,249 each year, compared to more than 30,000 who are killed on U.S. highways.

The study was commissioned by the Copenhagen Consensus, a project founded by Danish political scientist Bjorn Lomborg to analyse the cost and benefits of different solutions to world problems, from terrorism to climate change and AIDS.



SENSE OF PROPORTION

"Yes, terrorism does kill, but it kills 420 people every year. It's probably useful to get a sense of proportion, compared to the many other troubles the world is considering," Lomborg said in a telephone interview.

The study estimated the benefits from increased global spending on homeland security since 2001 -- in terms of fewer attacks and therefore less economic damage -- amounted to 9.5 percent of the sums invested, a return of less than 10 cents for every dollar.

Better international cooperation could produce much greater benefits, it argued.

For $128 million a year, it would be possible to double the budget of world police organisation Interpol and sharply increase the resources of the International Monetary Fund for tracing terrorist funds. If that stopped just one major attack, it would save at least $1 billion.

"These would be very cheap measures that would have potentially great impact," Lomborg said.

The study also argued that a more sensitive U.S. foreign policy, including an increase in development aid from the 2006 level of $22.7 billion, could project a more positive image of the country that would help negate militant propaganda.

A U.S. aid increase of $7-8 billion a year could be recouped in full by savings in homeland security spending and a 25 percent fall in worldwide attacks on U.S. interests, assuming that could be achieved as a result of such a policy.