Terrorism prevention with reelection concerns and valence competition

In recent decades, fear of terrorism has increased among voters in liberal democracies. In response, governments have adopted counterterrorist measures that curtail civil liberties, at times prompting allegations that political expediency underlies such measures. I study politicians’ strategic design of counterterrorist policies in a model of valence competition under threat of terrorism. The incumbent chooses a counterterrorist strategy that combines observable (state of emergency) and unobservable (effort) actions. In equilibrium, emergencies and terrorist attacks become endogenously informative about valence. The low-valence incumbent underprovides effort relative to the high-valence incumbent, and at times declares a state of emergency in the absence of a terrorist threat. Increasing voters’ information about the incumbent’s valence improves politician selection, but at the expense of a higher incidence of unwarranted emergencies and, under some conditions, terrorist attacks.