The “peer-effect” in counterterrorist policies

Existing accounts posit that defensively oriented counterterrorist policies create negative externalities and result in regulatory competition that induces governments to increasingly tighten their policies. We argue that rather than causing an unconditional global “race to the top,” spatial dependence in counterterrorist policies is limited to within groups of countries exposed to a similar level of threat from international terrorism. Countries strongly differ in their propensity to become the target of an international terror attack. Governments can safely ignore counterterrorist policies enacted by countries outside their “peer group,” but they must pay attention to measures undertaken by their peers. We test several predictions derived from our theory in an empirical analysis of counterterrorist regulations in twenty Western developed-country democracies over the period 2001 to 2008.