Maritime Piracy and its Control: An Economic Analysis
C. Paul Hallwood, Thomas J. Miceli
Language: English
Pages: 151
ISBN: B01181RW9Q
Format: PDF / Kindle (mobi) / ePub
Modern day maritime piracy is a world-wide phenomenon. Over the last ten years, about 3,000 pirate attacks, actual or attempted, have been reported, but with some recent decline due to the effort of naval task forces as well as a very large increase in the use of on-board armed guards. Somali pirates principally operate a capture-to-ransom model, with ransoms of up to $5.5 million per incident being collected. Elsewhere in the world robbery is the main motive. The overall economic cost of maritime piracy in 2012 was estimated at $6 billion.
Maritime Piracy and its Control develops an economic approach to the problem of modern-day maritime piracy with the goal of assessing the effectiveness of remedies aimed at reducing the incidence of piracy. Miceli and Hallwood's theoretical framework is based on a standard Becker-type model of law enforcement, extended to consider the effort level of pirates to locate and attack target vessels, and of shippers to invest in precautions to avoid contact. The model provides the basis for prescribing an optimal enforcement policy whose goal is to minimize the cost of piracy to international shipping. It also serves as a benchmark for evaluating actual enforcement efforts within the context of international law and concludes with several proposals aimed at improving enforcement.
respect to ei yields the first-order condition As usual, the left-hand side is the marginal deterrence benefit of an additional dollar spent on enforcement, consisting of the reduction in harm to i’s shipping and its share of punishment costs, while the right-hand side is the marginal cost of enforcement, including the direct cost of an additional unit of enforcement ($1) plus the increase in i’s share of punishment costs. Equation (5.16) defines the reaction function of country i, taking as
before it’s boarded and hijacked. That’s where the private security companies come in. We are already on board and good to go. Firstly it’s as a deterrent—row upon row of razor wire, water hoses, and other obstacles on deck; then a show of force with weapons on the bridge. After that it’s warning shots, but the rules of engagement are clear—only fire when you are fired upon, or a life is in immediate danger, then aimed shots only. Pirates aren’t suicide bombers or jihadis, they have no wish to
to apply international law governing maritime terrorism to the maritime piracy. Similarly, Hong and Ng (2010) would like the SUA Convention to be applied to maritime piracy because of its more effective enforcement characteristics. They do not see major obstacles, but they do see limited scope, arguing that it would only apply to hijackings and not to the much more frequent crime of robbery at sea.12 6.3 Comparing SUA with the LOS To examine these enforcement issues in more detail, Table 6.1
defined by a set of onerous provisions and obligations, and therefore had not been left to each signatory to make up its own mind on how to cooperate, it is very likely that many fewer countries would have ratified that treaty. That is, the fewer are the obligations, the more countries will agree to sign on. An obvious further question is why countries sign treaties that they know are very likely to be ineffective. A possible answer is to leave ‘wiggle room,’ because a country can always claim
universal jurisdiction for piracy,’ Northwestern University School of Law, Public Law and Legal Theory Series, No. 09-26, Law and Economics Series, No. 09-45. Koskenniemi, M. (2011) ‘The mystery of legal obligation,’ International Theory 3 (2): 319–325. Landes, W. and R. Posner (1987) The Economics Structure of Tort Law. Cambridge, MA: Harvard University Press. Lee, R. E. (1974) Blackbeard the Pirate: A Reappraisal of His Life and Times. Winston-Salem: John F. Blair Publisher. Leeson, P.