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ISET Economist Blog

A blog about economics in the South Caucasus.

Dear Police: There is a Bomb. Please Find It!

Evacuation is one of the most frequently used words in Georgian TV in the last two weeks, arguably due to an inflation of fibber bomb warnings. Rustavi 2, Imedi, Parliament, airport, bank offices, and schools – all were targeted by these macabre hoaxes.

In the Georgian fairy tale of Liar Shepherd, the young boy lied twice that wolfs were coming. When finally wolfs were really coming, no one believed him anymore. This is one of the main risks of bomb hoaxes – they may lead to something one might call “terrorism fatigue”.

Recently, I spoke with somebody who lived in Israel for many years. He told me that he was entering a high security area in Jerusalem for many days in a row. After a few days, the security team in charge of checking entrants “knew” him already. From that point on, they refrained from checking him thoroughly. A clear failure of the security team, easily exploitable by terrorists, but this kind of negligence is a typical pattern of human behavior. Experimental research confirms that once people made a streak of experiences supporting a certain theory, they typically become overly confident that the theory is correct, even if that is by no means warranted by the amount of evidence they have (this, by the way, explains human proneness to superstition). We therefore must hope that the bomb warnings in Tbilisi are taken seriously each and every time, the evacuations will be carried out again and again, and all this is done even though everybody thinks that it is but another hoax.

In Israel the destruction and the casualties of terror strikes account only for a tiny part of the economic costs of terrorism. Really expensive are the extensive efforts made by the Israelis to prevent terrorism. Responding to terrorist threats, in Israel you cannot enter a supermarket, an administrative building, or a restaurant without being screened with a metal detector and your bags being searched. On a national scale, this is extremely costly. Arguably, if it was about maximizing the number of saved lives, one should rather invest this money into health care, cancer prevention, or traffic safety. Yet the deep-seated fear that arises among citizens in the face of terrorism leads decision makers to excessively allot resources to terrorism prevention.

In general, terrorism is not primarily costly because of the direct destruction it causes, but because of the reaction of society. With hoax terrorism, so popular in Georgia now, this effect is even stronger: it is only costly because of the reaction it provokes (evacuations, heavier security measures etc.), but these costs can be considerable.


WHAT TO DO ABOUT IT?

In his famous 1968 paper “Crime and Punishment: An Economic Approach”, the later Nobel Prize laureate Gary Becker argues that by deciding on punishments and by allotting resources to the police, decision makers can essentially decide on how much crime of a certain type will occur. Based on this contention, he says that at the beginning of any crime debate should be the question of “how many offenses should be permitted and how many offenders should go unpunished”. The optimal punishment should be based on “a measure of the social loss from offenses” and one should choose punishments so as to “minimize this loss.” Because punishment is economically costly in itself, his rule does not prescribe to impose maximal punishment on all crimes. Besides that, Becker has an affinity to fines over other forms of punishment: “Fines have several advantages over other punishments: for example, they conserve resources, compensate society as well as punish offenders”.

Georgian policy makers seem to be aware of Gary Becker’s ideas. About a week ago, the Georgian parliament passed changes in the punishment of hoax terrorism. Adults now have to face 2-5 years in prison. Minors will be fined 1,500 GEL for the first offense and 2,000 GEL for a repetition. Whether this will suffice to bring down the number of hoax bomb warnings to its desired level, which is close to zero, will turn out in future. Georgian policy makers follow Becker’s advice in so far as punishments are tightened in response to the increased number of hoax bomb calls. This is in line with Becker, who practically proposes a trial-and-error process, gradually changing the punishment until the amount of crime is bearable.


THE PRANKSTERS’ INCENTIVES

What are the incentives of the hoax terrorists? Perhaps they act just out of childish oafishness. Perhaps these wannabe terrorists just imitate other’s actions or they want a day without school. In this case, fines can work, but it is important to spread the information that the detection probability is basically one (allegedly, all of the hoaxers were caught so far) and the fine is 1,500 GEL. Most pupils won’t evaluate one day off at school at 1 500 GEL. If this is but a childish game, then it should stop after the amount of the fine was announced publicly and it was claimed that almost certainly one will be caught.

If some of these hoaxers are not just simple fools but act on the order of third parties, there is much more reason for concern. Are there people who want to cause instability in the society? Is it even intended to cause the kind of “fatigue” described in the beginning of this article, so as to land a real terror strike somewhere in the future?

In that case, an increase in the amount of fines will hardly change the situation. An external motivator may easily reimburse 500 GEL, 1,500 GEL, or whatever fines the government imposes. If there was evidence that the hoaxes are systematically organized or externally motivated, the police would have to catch not only the callers but also those who are ordering these calls. Obviously, this may be very difficult, and the masterminds may even be abroad.

Let us hope that the recent increase in fines will have an impact on the frequency of these hoaxes. If not, we should all be on the watch.

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Guest - Hans G on Friday, 04 October 2013 01:37

thank you for bringing economic (and clear) thinking to this issue.

I also had to think back to my experience in London during the IRA bombings and bombing threats in the 1990s. There, the rule was that you do not ever report bombing threats in the media. I think this is a very sensible rule.

The pay-off to a prankster is national recognition in exchange for a phone call with a horse voice. That looks like a pretty sweet deal if you are a disaffected teenager.

Take the media recognition away, and our prankster needs to propagate his deed himself. The costs go up, as do the risks.

You may recall the famous story of the four Philippino students arrested for a bomb hoax regarding a plane. They arrived late at the check-in counter, and on being informed that the plane had left they said: "that is not possible! What about the bomb threat?!?" The smart check-in attendant immediately caught onto the fact that she was looking at the culprits, who had called in to try and make the plane. Shift propagation costs on the hoaxer, and the calculus shifts, too.

I think ISET should propagate this approach in Georgia, for three reasons. First, it should reduce hoaxers, and copy-cats. Second, it will thus keep people more alert (and possible safe) if a real threat occurs. Third, policy makers and the public will get to think about a complex issue in a more nuanced way, informed by how people behave (good economics, good psychology, and good common sense), which would be a good approach to policymaking more broadly.

thank you for bringing economic (and clear) thinking to this issue. I also had to think back to my experience in London during the IRA bombings and bombing threats in the 1990s. There, the rule was that you do not ever report bombing threats in the media. I think this is a very sensible rule. The pay-off to a prankster is national recognition in exchange for a phone call with a horse voice. That looks like a pretty sweet deal if you are a disaffected teenager. Take the media recognition away, and our prankster needs to propagate his deed himself. The costs go up, as do the risks. You may recall the famous story of the four Philippino students arrested for a bomb hoax regarding a plane. They arrived late at the check-in counter, and on being informed that the plane had left they said: "that is not possible! What about the bomb threat?!?" The smart check-in attendant immediately caught onto the fact that she was looking at the culprits, who had called in to try and make the plane. Shift propagation costs on the hoaxer, and the calculus shifts, too. I think ISET should propagate this approach in Georgia, for three reasons. First, it should reduce hoaxers, and copy-cats. Second, it will thus keep people more alert (and possible safe) if a real threat occurs. Third, policy makers and the public will get to think about a complex issue in a more nuanced way, informed by how people behave (good economics, good psychology, and good common sense), which would be a good approach to policymaking more broadly.
Guest - Eric Livny on Friday, 04 October 2013 02:33

Thanks for your comment, Hans! Makes a lot of sense

Thanks for your comment, Hans! Makes a lot of sense
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