The Mumbai Terror attacks takes me back to a longish post I had written a while back. In that post I had said we should, take terrorism a lot seriously than we do. The knee-jerk reactions will not work as counter-terrorism policies need a overhaul of our security and defense systems.
In that post I had pointed out how financial stability and terrorism are in the same boat.
Copenhagen Consensus is a forum that started in 2002 and debates the top challenges facing the world. The challenges are presented as research papers on both sides- one defending the challenge, other nullifying it. The papers and findings are presented before a jury which then ranks the challenges based on evidence presented. There have been 2 forums so far one in 2004 and other in 2008. An analysis shows how both financial stability and terrorism are there in the same boat of ignorance.
Four proposals before the panel addressed the issue of international financial stability. The panel, noting the complexities and uncertainties in this area, chose not to come to a view about which, if any, of these proposals to recommend. They were therefore not ranked.
In 2008 CC didn’t mention financial stability as a challenge but had terrorism as a challenge. Interestingly, it couldn’t come to any conclusion on terrorism either:
The panel chose not to include any of the proposed solutions to the challenge of terrorism in the overall ranking. Though the paper presented innovative and new work on the economic costs and benefit of terror prevention, the panel found that there was not sufficient evidence regarding the proposed options.
What is important is to discuss and act on these issues in good times. However, what we get to see is we forget these in good times and when they strike, we are clueless and don’t know how to act/react. Read the post for more details as have pointed to suggestions by Martin Feldstein and papers presented at the Copenhagen Consensus.