B public goodscollective action problems not all

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b. Public goods/collective action problems Not all public goods need to be provided by government, and not all collective action problems need to be solved by government. However, under some transaction cost and strategic circumstances, government may be the optimal provider of public goods, and may resolve collective action problems. We have noted above that some types of cyberspace security will have public goods characteristics, and therefore may be under- provided without intervention of some kind. This will be an argument for governmental intervention. Interestingly, it will often (but not always) also be an argument for international cooperation, as the existence of public goods or collective action characteristics that call for government intervention at the domestic level may call for governmental intervention at the global level. This is not to say that all arguments for regulation are arguments for global regulation. There are likely to be sub-global “optimal regulatory areas.” 23 c. Externalities Public goods problems and collective action problems are actually types of externalities, where the decision of one person has effects, beneficial or detrimental, on another, and that decision is not necessarily incorporated in decision-making. There are many possibilities for externalities in connection with security against cyberterrorism. Most importantly, one person’s insecure network may be used to mount an attack against another person’s network. Second, because of the benefits of cyberspace network externalities, the failure of one person to protect his own network may have adverse effects on others. d. Costs of Regulation 23 See, e.g., Daniel Esty, Toward Optimal Environmental Governance , 74 N.Y.U.L. R EV . (1999); Merritt Fox, Optimal Regulatory Areas for Securities Disclosure , 81 W ASH . U.L.Q. 1017 (2003).
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Global Cyberterrorism, Jurisdiction, and International Organization 16 One of the major arguments made by those who argue against all cyberspace regulation is that it is prohibitively costly, if technically possible, to regulate the “borderless” internet. It is true that the internet makes avoidance of national regulation by relocation easier. However, this argument militates both (a) against national regulation, and (b) in favor of international regulation. For example, Michael Vadis writes that “Given the global nature of the internet, it is not surprising that computer crime is also global, with attacks crossing national lines with increasing frequency. Operational efforts to prevent and respond to computer attacks must therefore also be global.” 24 5. Choice of Horizontal Public Order: A Transaction Costs Analysis of Prescriptive Jurisdiction in Cybersecurity Once we accept that each state will have different preferences, and different ways of articulating those preferences, it becomes apparent that there will be some variety in the way states approach the problem of security against cyberterrorism. Clashes of values and clashes of methods will be significant. States may have sharply divergent goals, and there may be substantial externalities. If we think of cyberterrorism as a type
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