The moral hazard of terrorism prevention

How does a policy of reacting to terrorist attacks with restrictions on free speech protections affect the likelihood of terrorism in the first place? In this article, I develop a dynamic model of an interaction between a security agency and a terrorist organization to study the dynamic consequences of adopting policies that curtail free speech protections and other rights when terror strikes. The article shows that in a world in which democratic governments respond to major terrorist attacks with restrictions on freedom of expression and other rights and liberties, such policies have perverse effects on the pre-Attack incentives of terrorism prevention/occurrence, which can make a terrorist attack more likely. The analysis suggests that a commitment to respecting fundamental rights and liberties in times of duress can be security-beneficial: If liberal societies were to remain faithful to their fundamental values in the aftermath of terrorist attacks, such a strategy can decrease the probability of a terrorist attack in the first place.