This paper reviews the existing law and economics literature on crime, noting where various models might apply to the terror context. Specifically, it focuses on two strands of the literature, deterrence and incapacitation. It considers anti-terror measures enacted by different countries, highlighting how the details of the laws correspond to the insights from economic models of crime. In conclusion, the paper proposes an efficient sorting mechanism in which individuals will be provided with incentives to reveal their type to law enforcement authorities.
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Acknowledgements The authors thank Robin Hanson, Charles Rowley and the participants to the GMU Conference on the Political Economy of Terrorism for helpful comments. We are also grateful to Mariona Llobet, who helped with the Spanish law, and Nathaniel Yoo who served as a research assistant. Garoupa acknowledges financial support from the Portuguese Ministry of Higher Education, POCTI/JUR/557527– 2004.
- Basic crime model
- Communal liability
- Organized crime
- Penalty enhancements