Examples include internet backbone networks internet

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network and where firewalls cannot provide sufficient protection. Examples include internet backbone networks, internet service provider networks, banking and other financial services, telecommunications services, transportation services, health services, and fire, police, emergency and other public services. How to protect the networks and end-user systems in these areas? Stronger firewalls, filters and protected access to critical components seem worthy of consideration. It would be possible to establish a variety of levels of protection, dependent on the level of risk of attack, and the magnitude of loss expected to be incurred from a successful attack. Would there be sufficient incentives for any one of these sectors, or for particular entities within these sectors, to develop appropriate protection, and to implement the protection? While some types of protection may best be implemented on a decentralized basis, there may be types of protection, including surveillance and interdiction, that is best implemented collectively. Is this area characterized by a collective action problem? While not all public goods problems or collective action problems are suitable for governmental intervention, under some transaction costs and strategic circumstances, government intervention will be the preferred solution. a. The Role of Law in Different Societies As noted above, variations in contexts, threats, and potential responses indicate that we are likely to see variations in the determination by each state of its unilateral optimal response to the threat of global cyberterrorism. Some states may determine to do nothing. They may determine that the threat is to the private sector, that there are no potential externalities or information asymmetries that would justify regulation, and that it is up to the private sector to act.
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Global Cyberterrorism, Jurisdiction, and International Organization 15 Other states may determine that a regulatory response is merited. Under some circumstances, an effective regulatory response may require international coordination or cooperation. In this part, we examine the possible effectiveness of private ordering, the possible areas in which public regulation may be required, and the possible areas in which international coordination of public regulation may be required. The degree to which public intervention is preferred will depend on the preferences of persons in different states, which will vary, as well as on the available governance structures and transaction cost structures within the particular state. It is clear that law plays different roles in different societies, and the private-public balance is likely to be achieved in different ways in different societies. These differences produce a type of path dependency in which subsequent institutional choices are constrained.
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