There may also be significant externalities in

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access the internet reduces its value even to those who retain access. There may also be significant externalities in connection with the threat of cyberterrorism. A particular state or private sector entity may have relatively little at stake with respect to its network, but it may be that its failure to take care imposes risks on other states or other private sector actors. Will individuals overcome the transaction cost issues to develop mechanisms to provide this public good or internalize relevant externalities without government intervention, or is government intervention necessary? It is true that the internet has substantial transaction cost advantages that allow it to facilitate coordination. Which group of individuals are we talking about: end-users, or backbone providers and internet service providers, or both? The number of backbone providers and internet service providers is relatively small, also facilitating coordination. Moreover, it may be that backbone providers and internet service providers have appropriate incentives based on their desire to maintain the value of their networks to service consumers. Business end-users that depend on the internet for business to business communication and business to consumer selling will also have high-powered incentives to ensure the security of the internet. These incentives are likely to be highest in connection with wealthier countries. It is possible that even end-users would have appropriate incentives with respect to the protection of their ability to access the internet. However, here the collective action problem is significant, and we would expect under-provision of this public good, 18 See James M. Buchanan, An Economic Theory of Clubs , 32 E CONOMICA 1 (1965); R ICHARD C ORNES & T ODD S ANDLER , T HE T HEORY OF E XTERNALITIES , P UBLIC G OODS AND C LUB G OODS (2d ed. 1996). 19 See, e.g., Nicholas Economides, The Economics of Networks , 14:2 I NT L J. I ND . O RG . (1996).
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Global Cyberterrorism, Jurisdiction, and International Organization 13 given the difficulties in coordinating. 20 On the other hand, as noted above, software or hardware prophylaxis may be excludible and therefore may not be a public good. In that case, we would have greater reason to expect efficient provision of security. Do private sector actors have the tools to deliver security against cyberterrorism? Will private sector responses result in an accentuated digital divide or other adverse social effects? 21 It is possible that private ordering might focus on solutions to the cyberterrorism problem that will not be socially optimal. 4. Governmental Intervention It appears that some kinds of cyberterrorism security issues may be amenable to private ordering solutions. These types of issues might include spam, viruses, worms and other methods of attacking individual computers at the end-user level. Under circumstances of sufficient diversity, decentralization, resiliency, and redundancy, society could afford to accept the risk of this type of cyber-attack. Computer scientists and others skilled in assessing risk would be required to evaluate the extent to which this type
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