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This article establishes the prevalence of deterrence over preemption when targeted governments can choose between either policies or employ both. There is a similar proclivity to favor defensive counter-terrorist measures over proactive policies. Unfortunately, this predisposition results in an equilibrium with socially inferior payoffs when compared with proactive responses. Proactive policies tend to provide purely public benefits to all potential targets & are usually undersupplied, whereas defensive policies tend to yield a strong share of provider-specific benefits & are often oversupplied. When terrorists direct a disproportionate number of attacks at one government, its reliance on defensive measures can disappear. Ironically, terrorists can assist governments in addressing coordination dilemmas associated with some antiterrorist policies by targeting some countries more often than others. 1 Table, 6 Figures, 25 References. [Reprinted by permission of Sage Publications Inc., copyright 2005.]

Repeated interaction between a terrorist group and a target government is analyzed in a game-theoretic model. The analysis identifies a dynamic inconsistency problem, which forces the government to under-invest in defensive measures while over-investing in offensive measures. Policy implications are discussed in light of recent US counterterrorism experience. It is shown that governments may resolve the problem by delegating the authority over defensive measures to an independent agency.

Blind Spot: The Secret History of American Counterterrorism, by Timothy Naftali, is reviewed.