Global Terror, Private Infrastructure, and Domestic Governance

Abstract

This article, a chapter from a three-volume study of the effects of globalization on domestic law, society and economics, considers implications for domestic administration when ''globalization comes home'' in the form of terrorism risk management. Specifically, it explores tensions between the need to enlist private actors in the governance of global terror risks on the domestic front, and the traditional model of domestic public administration. In this context, policymakers must often rely on private firms' choices regarding risk assessment. These governance choices are frequently made outside public accountability safeguards. Yet the private actors who make them are driven by economic incentives and risk decision models that might cause their behavior to ignore what are essentially public risks, thereby undermining their effectiveness.

The chapter gives an overview of these challenges and argues that the prevailing model of public reliance on voluntary self-regulation by private critical infrastructure entities fails to meet them. Delegating choices wholesale to private actors neither furthers important public accountability norms nor overcomes incentive problems that hinder effective market responses to the problem. The chapter then briefly explores alternative models of public-sector involvement in critical infrastructure governance that may hold promise in rendering private-sector decisions more accountable to both policy goals and public norms.

Keywords: Private Governance, Critical Infrastructure, Self-Regulation, Terrorism Risk, Public-Private, Globalization

JEL Classification: K20, K23, K32, L20, L51, L90