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This chapter examines the costs and benefits of increases in homeland security spending since 2001 in the US, the UK, Canada, and Australia. It concludes that increases in American homeland security expenditures have been wildly inefficient. To be considered cost-effective in analyses that substantially bias the consideration toward the opposite conclusion, the enhanced expenditures each year would have had to have deterred, foiled, or protected against as many as 1,667 otherwise successful terrorist acts, roughly like the one intended on Times Square in 2010, or more than four per day. While increases in overall security spending have been much lower in the UK, Canada, and Australia, they still fail a cost-benefit evaluation.

This introductory chapter assesses the massive increase in homeland security expenditures in the wake of 9/11. It suggests that the Department of Homeland Security (DHS) focuses all or almost all of its analyses on the contemplation of the consequences of a terrorist attack while substantially ignoring the equally important likelihood component of risk assessment, as well as the key issue of risk reduction. In general, risk assessment seems to be simply a process of identifying a potential source of harm and then trying to do something about it without evaluating whether the new measures reduce risk sufficiently to justify their costs. An overview of the subsequent chapters is also presented.

To synthesize preceding chapters and point the way forward, Chapter 9 first identifies the need for enhanced transparency on costs and rationalization, particularly in early stages of disputes to manage expectations and create efficiencies. Second, it identifies relative costs and benefits of ITA, arguing an increased focus on non-adjudicative dispute resolution is warranted while acknowledging those mechanisms only work effectively when legitimate adjudication permits parties to negotiate “in the shadow of the law.” Third, the chapter explores ICSID’s proposals to foster a dialogue about costs. Fourth, it advocates changing cost-shifting norms toward a factor-dependent model. Recalling potential limitations, it concludes that for international investment dispute resolution to foster rule-of-law adjudication that is efficient, fair, reliable, and rationalized, stakeholders should implement structural safeguards to focus on appropriate dispute resolution to promote cost containment, predictability, and sustainable dispute resolution in an era of re-emerging nationalization and a backlash against international law.

This chapter examines homeland security measures specifically designed to protect people and assets from a terrorist attack. It lays out a series of general principles or parameters that must be considered for the discussion to be sensible. These include the need to seek realistically to assess the (usually remote) likelihood of a terrorist attack on a potential target (the numbers of which are massive); the limited numbers of terrorists and the equally limited competence of most of them; the ability of terrorists to shift from one target to another if the first proves to be well protected; their method of target selection that often seems to be random; the costs of repair in comparison with those of protection; the hopelessness of adequately protecting many potential targets except by closing them down; and the costs and negative consequences of protective measures. Many of these principles, however, are currently either ignored or applied in confused ways. The chapter also assesses the often-quixotic process of fabricating lists of potential terrorist targets in an effort to predict which targets are most appealing to terrorists.