Market Structures and Shipping Security

The events of September 11th, 2001, in the US have brought a greater focus to the ways in which national security is viewed. International agencies such as the International Maritime Organisation and most national governments have been active in developing new security policies. Security, however, poses particular problems because, unlike safety where there is no conscious effort to cause harm, there is an inevitable gaming problem with potential perpetrators continually vying to circumvent security regimes. Added to this, security involves uncertainty that, unlike risk, has no real probability associated with it. These features necessitate a public as well as a private sector response. To develop public policy in these circumstances there is a need to tailor actions to the nature of the maritime market. A difficulty in doing this is that there is no single market; rather there are a number of overlapping markets. An added problem is that there is no consensus on the underlying structure of most of these markets. This paper fills some of the resultant voids by examining the extent to which actors in various market situations have internal incentives to ensure security and how they would react to external incentives such as regulations. Maritime Economics & Logistics (2006) 8, 100–120. doi:10.1057/palgrave.mel.9100145