Periodic Report Summary 2 - EUSECON (A New Agenda for European Security Economics)
The EUSECON project made a sustainable investment in the relatively new yet critical area of research called security economics. Understanding the causes and consequences of insecurity, including the economic costs of security policies, is of high relevance and importance. A better understanding of these issues is necessary in order to help reach the European Union's goals of achieving economic development while simultaneously protecting its citizens. EUSECON helps to achieve these broad goals by focusing on a few key areas within the security economics research agenda. First, it attempted to define the field of security economics and provide a framework for its analysis. Second, it aims to identify and addresses gaps in knowledge in various segments of the security economics discipline. Third, it fostered the establishment of a cohort of economic security experts, an important aspect in ensuring that there is a sustainable critical mass of researchers in Europe working in this area. Based on the research that EUSECON produces, the project expected to generate policy-relevant knowledge that improves policy-making in the European Union, and finally, it disseminated academic and policy-relevant findings in order to promote information exchange between dispersed researchers and knowledge transfer.
EUSECON made efforts to achieve these goals through a structured work program consisting of a series of work packages. These work packages cover a broad range of aspects related to the human drivers of insecurity. The project began in the first and second year with a broad effort to develop a series of concepts upon which the project can be guided. It has continued in the third year with a range or empirical and theoretical research investigating the relevant micro-economic to macro-economic drivers of insecurity. Moreover, the efforts have begun to analyse EU security policies, also in the context of global security policies. A number of studies produced in the first half of the project were revised and finalised in the third year. This work will continue in the fourth year of the project, but at the same time, the project will place a larger emphasis on the policy-relevance of its outputs and will dedicate increased efforts to disseminate relevant findings. In total, there are seven content-oriented work packages and two that focus on management and research dissemination. The full list of work packages is as follows:
1. Conceptual framework of insecurity
2. The micro-economic analysis of the structure and behavior of different agents of insecurity
3. The micro-economic analysis of individual and private sector responses to insecurity and security policies
4. The macro-economic analysis of economic impacts of insecurity and security policies
5. The security industry
6. EU security policy
7. Policy implications
8. Dissemination of knowledge
9. Project Management
The EUSECON consortium comprises fourteen institutes of research excellence from around Europe: from Norway in the North to Spain in the South, and from the UK in the West to the Czech Republic and Israel in the East. The partners are also quite diverse, including representatives from universities, research institutes, and the private sector. Their researchers represent fields from development economics and criminology to political science and systems research. EUSECON has been able to utilize this diversity to encourage useful dialogue and collaboration among its roughly thirty researchers. The project partners, as well as principal investigators, are as follows:
- German Institute for Economic Research (DIW Berlin) | Prof. Tilman Brück | Germany
- Institute for Peace Research and Security Policy (IFSH) | Prof. Michael Brzoska | Germany
- Economics Institute, Academy of Sciences of the Czech Republic (CERGE-EI) | Prof. Jitka Male?ková | Czech Republic
- Charles University, Prague | Dr. Libor Stejskal | Czech Republic
- University of Oxford (Center for Criminology and Queen Elizabeth House) | Prof. Federico Varese and Prof. Valpy FitzGerald | United Kingdom
- Ingenieria de Sistemas para la Defensa de España, S.A. (Isdefe) | Carlos Martí Sempere | Spain
- University of the Basque Country | Prof. Javier Gardeazabal | Spain
- RAND Corporation | Dr. Claude Berrebi | United Kingdom
- Hebrew University of Jerusalem | Dr. Esteban F. Klor | Israel
- University of Thessaly | Prof. Christos Kollias | Greece
- Johannes Kepler University, Linz | Prof. Friedrich Schneider | Austria
- International Peace Research Institute, Oslo | Prof. Scott Gates | Norway
- Institute of Social Studies, The Hague | Prof. Syed Mansoob Murshed | Netherlands
- Athens University of Economics and Business | Prof. Konstantinos Drakos | Greece
EUSECON completed its third project year on February 28, 2011. As is always the case, the end of a project year provides a good opportunity to look back over the previous twelve months of cooperation among the diverse group of partners. In doing so, the third year is viewed by the consortium of partners to have been a success marked by a great deal of scientific progress complemented by dissemination of policy-relevant results.
EUSECON made progress in its research program on various fronts in the third year: conceptual development, empirical analysis, and policy-related considerations. The first area, conceptual development, involved the continuation of the work that was featured in the first and second years of the project. All of the conceptual papers that were produced through work package 1 were reviewed and the majority were finalised in the third year of the project. The main goal of this effort to publish a special issue of Defence and Peace Economics on a conceptual framework for security economics from a European perspective has been achieved. The issue titled "The Economics of Security: a European Perspective" was guest edited by Tilman Brück, Michael Brzoska and Konstantinos Drakos and published as volume 22, issue 2, 2011. The outputs included a discussion of security as a public good, a conceptual model of the fight against terrorism from the perspective of the policy-maker, a historical perspective on notions of security and insecurity within the EU, and an overview of available data in the area of security economics for empirical research. All of these papers are also available to the general public as Economics of Security Working Papers.
The second, and largest, area of research in EUSECON during the third year involves the research being conducted in work packages two through five. Several outputs of these work packages have been undergoing peer review with the view of publication in a supplemental issue of European Journal of Political Economy on terrorism. The issue is edited by Tilman Brück and Friedrich Schneider. Publication of the issue is expected in 2011.
Work packages two and three investigate the micro-economic causes and effects of insecurity, as well as the micro-economic effects of security policies. While much progress was made in these areas in the third year of the project, some highlights can be illustrated.
Researchers from RAND and HUJI, in addition to analysing the link between economic conditions and the quality of suicide terrorism, examined the economic costs of harbouring suicide terror attacks, and measured the impact of a successful attack on local unemployment and wages. They find robust evidence that terror attacks have important economic costs, such as an increase in unemployment. Researchers at EI conducted similar types of analyses to identify specific demographic and/or political characteristics of the subgroup found crucial for the support (and occurrence) of terrorism in their earlier study. Preliminary results suggest a large and interesting variation in the gender support for terrorism. The study conducted by JKU aiming to estimate the financial means of terrorist organisations with the help of a latent estimation approach (MIMIC procedure) reveals figures that illustrate considerable financial means of Al Qaeda and other terrorist organisations.
Similar types of research and findings are included in other areas. The findings of DIW researchers show a hump?shaped effect of governance on criminal activity. Organised crime benefits from improvements in market and state structures at the bottom end of the governance spectrum. Another study led by DIW analyses the impact of various types of extreme events, including terrorism, on the perceptions of entrepreneurs concerning some key entrepreneurial issues - such as fear of failure in starting a business venture etc. The findings show that terrorist attacks have a positive and significant impact on business creation.
Progress has been made in the analysis of macroeconomic impact of insecurity and security policies. In their study of diffusion mechanism of terrorist shocks to stock market responses in third countries' AUEB determine that the likelihood and the size of negative stock market reaction increase with terrorism record and risk concern. Furthermore, in regard to the effects of terrorist attacks on stock markets, the comparative study of Athens and London stock market produced by UTH finds that the effects of terrorist events appear to be transitory and seem to depend on the political and symbolic significance of the target hit.
With respect to the analysis of the EU security policy, which is the focus of work package six, the research conducted at IFSH suggests that the desired comprehensive approach in many counterterrorism measures still remains elusive. DIW finds that the successful counter-piracy measures (including EU Operation Atalanta) so far deterred pirates from forming alliances with Islamist movements and may therefore have made a major contribution to international security.
Early in the third project year the consortium of EUSECON partners met for the project interim workshop. Organised jointly by DIW Berlin and AUEB - Athens University of Economics and Business, the meeting was held on 12-13 April 2010 in Athens and brought together the majority of partners to discuss the scientific development of the project, research ideas for the following years and synergies across work packages. The two days of the workshop were filled with presentations on research output, allowing researchers from all working groups to hear what others are doing and to discuss ways of coordinating and converging their outputs. In conjunction with the workshop, the first meeting of the Advisory Board with the members of the Coordination Board took place on 12 April 2010. Five external advisors, who are notable experts in the area of security, provided valuable feedback on the project outputs and suggestions for future activities.
Additional meetings have been planned for the third and fourth years of the project. In order to address specific issues related to the project's area of focus, such as micro-economic aspects, macro-economic aspects, and security policy, the consortium has planned a series of special one-day focus workshops that would also function as work package meetings. The workshop dedicated to security policy took place on 23 November 2010 at the Institute for Peace Research and Security Policy (IFSH) in Germany. The meeting on the microeconomic analysis of determinants and effects of insecurity was held on 8 April 2011 at DIW Berlin - German Institute for Economic Research. Macroeconomic impacts of insecurity and security policies will be the focus of the upcoming workshop scheduled for 27 May 2011 at University of Thessaly (UTH), Greece. Two of the additional meetings which have already taken place so far proved to be very useful in terms of identifying synergies between individual papers and putting together a broader picture of the EUSECON research as a whole.
EUSECON has developed a series of channels in which it communicates with the public. The most visible one is its website: http://www.economics-of-security.eu This website, which serves as the home for EUSECON and NEAT, is operated with the help of content management system (CMS). The EUSECON section of the website provides an overview of the project, its work plan, all partners, news and events relevant to the project, and access to publications. Publications are one of the most essential components of the website. On the 'Publications' page, users have access to all Economics of Security Working Papers, the series which is used to disseminate project outputs. By the end of the third year, this series included 47 papers on the economics of security, more than half of which had been produced through the EUSECON project.
These types of analyses will be finalised in the fourth year of the project. As the increasing number of findings becomes available and published in the pier-reviewed journals, EUSECON's policy-relevant overviews for EU and national-level policy-makers will grow more numerous. The groundwork for such activities has already been underway. EUSECON has worked to become more visible in the research community and in professional circles through its website, its working paper series, journal publications, policy publications, presentations and commentaries by its researchers, discussions with public officials, and other means.
Project website: http://www.economics-of-security.eu/eusecon
EUSECON made efforts to achieve these goals through a structured work program consisting of a series of work packages. These work packages cover a broad range of aspects related to the human drivers of insecurity. The project began in the first and second year with a broad effort to develop a series of concepts upon which the project can be guided. It has continued in the third year with a range or empirical and theoretical research investigating the relevant micro-economic to macro-economic drivers of insecurity. Moreover, the efforts have begun to analyse EU security policies, also in the context of global security policies. A number of studies produced in the first half of the project were revised and finalised in the third year. This work will continue in the fourth year of the project, but at the same time, the project will place a larger emphasis on the policy-relevance of its outputs and will dedicate increased efforts to disseminate relevant findings. In total, there are seven content-oriented work packages and two that focus on management and research dissemination. The full list of work packages is as follows:
1. Conceptual framework of insecurity
2. The micro-economic analysis of the structure and behavior of different agents of insecurity
3. The micro-economic analysis of individual and private sector responses to insecurity and security policies
4. The macro-economic analysis of economic impacts of insecurity and security policies
5. The security industry
6. EU security policy
7. Policy implications
8. Dissemination of knowledge
9. Project Management
The EUSECON consortium comprises fourteen institutes of research excellence from around Europe: from Norway in the North to Spain in the South, and from the UK in the West to the Czech Republic and Israel in the East. The partners are also quite diverse, including representatives from universities, research institutes, and the private sector. Their researchers represent fields from development economics and criminology to political science and systems research. EUSECON has been able to utilize this diversity to encourage useful dialogue and collaboration among its roughly thirty researchers. The project partners, as well as principal investigators, are as follows:
- German Institute for Economic Research (DIW Berlin) | Prof. Tilman Brück | Germany
- Institute for Peace Research and Security Policy (IFSH) | Prof. Michael Brzoska | Germany
- Economics Institute, Academy of Sciences of the Czech Republic (CERGE-EI) | Prof. Jitka Male?ková | Czech Republic
- Charles University, Prague | Dr. Libor Stejskal | Czech Republic
- University of Oxford (Center for Criminology and Queen Elizabeth House) | Prof. Federico Varese and Prof. Valpy FitzGerald | United Kingdom
- Ingenieria de Sistemas para la Defensa de España, S.A. (Isdefe) | Carlos Martí Sempere | Spain
- University of the Basque Country | Prof. Javier Gardeazabal | Spain
- RAND Corporation | Dr. Claude Berrebi | United Kingdom
- Hebrew University of Jerusalem | Dr. Esteban F. Klor | Israel
- University of Thessaly | Prof. Christos Kollias | Greece
- Johannes Kepler University, Linz | Prof. Friedrich Schneider | Austria
- International Peace Research Institute, Oslo | Prof. Scott Gates | Norway
- Institute of Social Studies, The Hague | Prof. Syed Mansoob Murshed | Netherlands
- Athens University of Economics and Business | Prof. Konstantinos Drakos | Greece
EUSECON completed its third project year on February 28, 2011. As is always the case, the end of a project year provides a good opportunity to look back over the previous twelve months of cooperation among the diverse group of partners. In doing so, the third year is viewed by the consortium of partners to have been a success marked by a great deal of scientific progress complemented by dissemination of policy-relevant results.
EUSECON made progress in its research program on various fronts in the third year: conceptual development, empirical analysis, and policy-related considerations. The first area, conceptual development, involved the continuation of the work that was featured in the first and second years of the project. All of the conceptual papers that were produced through work package 1 were reviewed and the majority were finalised in the third year of the project. The main goal of this effort to publish a special issue of Defence and Peace Economics on a conceptual framework for security economics from a European perspective has been achieved. The issue titled "The Economics of Security: a European Perspective" was guest edited by Tilman Brück, Michael Brzoska and Konstantinos Drakos and published as volume 22, issue 2, 2011. The outputs included a discussion of security as a public good, a conceptual model of the fight against terrorism from the perspective of the policy-maker, a historical perspective on notions of security and insecurity within the EU, and an overview of available data in the area of security economics for empirical research. All of these papers are also available to the general public as Economics of Security Working Papers.
The second, and largest, area of research in EUSECON during the third year involves the research being conducted in work packages two through five. Several outputs of these work packages have been undergoing peer review with the view of publication in a supplemental issue of European Journal of Political Economy on terrorism. The issue is edited by Tilman Brück and Friedrich Schneider. Publication of the issue is expected in 2011.
Work packages two and three investigate the micro-economic causes and effects of insecurity, as well as the micro-economic effects of security policies. While much progress was made in these areas in the third year of the project, some highlights can be illustrated.
Researchers from RAND and HUJI, in addition to analysing the link between economic conditions and the quality of suicide terrorism, examined the economic costs of harbouring suicide terror attacks, and measured the impact of a successful attack on local unemployment and wages. They find robust evidence that terror attacks have important economic costs, such as an increase in unemployment. Researchers at EI conducted similar types of analyses to identify specific demographic and/or political characteristics of the subgroup found crucial for the support (and occurrence) of terrorism in their earlier study. Preliminary results suggest a large and interesting variation in the gender support for terrorism. The study conducted by JKU aiming to estimate the financial means of terrorist organisations with the help of a latent estimation approach (MIMIC procedure) reveals figures that illustrate considerable financial means of Al Qaeda and other terrorist organisations.
Similar types of research and findings are included in other areas. The findings of DIW researchers show a hump?shaped effect of governance on criminal activity. Organised crime benefits from improvements in market and state structures at the bottom end of the governance spectrum. Another study led by DIW analyses the impact of various types of extreme events, including terrorism, on the perceptions of entrepreneurs concerning some key entrepreneurial issues - such as fear of failure in starting a business venture etc. The findings show that terrorist attacks have a positive and significant impact on business creation.
Progress has been made in the analysis of macroeconomic impact of insecurity and security policies. In their study of diffusion mechanism of terrorist shocks to stock market responses in third countries' AUEB determine that the likelihood and the size of negative stock market reaction increase with terrorism record and risk concern. Furthermore, in regard to the effects of terrorist attacks on stock markets, the comparative study of Athens and London stock market produced by UTH finds that the effects of terrorist events appear to be transitory and seem to depend on the political and symbolic significance of the target hit.
With respect to the analysis of the EU security policy, which is the focus of work package six, the research conducted at IFSH suggests that the desired comprehensive approach in many counterterrorism measures still remains elusive. DIW finds that the successful counter-piracy measures (including EU Operation Atalanta) so far deterred pirates from forming alliances with Islamist movements and may therefore have made a major contribution to international security.
Early in the third project year the consortium of EUSECON partners met for the project interim workshop. Organised jointly by DIW Berlin and AUEB - Athens University of Economics and Business, the meeting was held on 12-13 April 2010 in Athens and brought together the majority of partners to discuss the scientific development of the project, research ideas for the following years and synergies across work packages. The two days of the workshop were filled with presentations on research output, allowing researchers from all working groups to hear what others are doing and to discuss ways of coordinating and converging their outputs. In conjunction with the workshop, the first meeting of the Advisory Board with the members of the Coordination Board took place on 12 April 2010. Five external advisors, who are notable experts in the area of security, provided valuable feedback on the project outputs and suggestions for future activities.
Additional meetings have been planned for the third and fourth years of the project. In order to address specific issues related to the project's area of focus, such as micro-economic aspects, macro-economic aspects, and security policy, the consortium has planned a series of special one-day focus workshops that would also function as work package meetings. The workshop dedicated to security policy took place on 23 November 2010 at the Institute for Peace Research and Security Policy (IFSH) in Germany. The meeting on the microeconomic analysis of determinants and effects of insecurity was held on 8 April 2011 at DIW Berlin - German Institute for Economic Research. Macroeconomic impacts of insecurity and security policies will be the focus of the upcoming workshop scheduled for 27 May 2011 at University of Thessaly (UTH), Greece. Two of the additional meetings which have already taken place so far proved to be very useful in terms of identifying synergies between individual papers and putting together a broader picture of the EUSECON research as a whole.
EUSECON has developed a series of channels in which it communicates with the public. The most visible one is its website: http://www.economics-of-security.eu This website, which serves as the home for EUSECON and NEAT, is operated with the help of content management system (CMS). The EUSECON section of the website provides an overview of the project, its work plan, all partners, news and events relevant to the project, and access to publications. Publications are one of the most essential components of the website. On the 'Publications' page, users have access to all Economics of Security Working Papers, the series which is used to disseminate project outputs. By the end of the third year, this series included 47 papers on the economics of security, more than half of which had been produced through the EUSECON project.
These types of analyses will be finalised in the fourth year of the project. As the increasing number of findings becomes available and published in the pier-reviewed journals, EUSECON's policy-relevant overviews for EU and national-level policy-makers will grow more numerous. The groundwork for such activities has already been underway. EUSECON has worked to become more visible in the research community and in professional circles through its website, its working paper series, journal publications, policy publications, presentations and commentaries by its researchers, discussions with public officials, and other means.
Project website: http://www.economics-of-security.eu/eusecon