Moviegoers know that the bad guys never run an efficient operation. There's always some double-cross, or embezzlement, or various hijinks that throw a wrench in the gears. They're the bad guys after all, and that's what bad guys do. So much the worse for them. Anyway, in the January issue of Strategic Insights, Jacob Shapiro wrote an interesting paper called "The Greedy Terrorist," which argues that some of the same sort of inefficiencies plague terrorist networks too. (Although, certainly, they're still pretty damn efficient.)

Shapiro points out that, for a given terrorist operation, those most devoted to the cause are more likely to be slotted in the riskiest positions, such as carrying out operations (on the theory that labor is limited, so networks have to place everyone in the riskiest possible positions they'll accept). That means those in "middleman" and logistical positions are often less devoted to the cause, and hence, their own interests may not be entirely aligned with the leaders of the terrorist network. Since terrorist networks, by their nature, operate with fewer checks and balances—for security reasons—the opportunities for graft and embezzlement are ripe. A leader doling out money to some middleman or financier for an operation won't know if all of the money is being used "well" because he can't just get on his cell-phone and check up on everybody every day. (And if the operation fails because the financier was skimming off some money—who will know?) Nor can the leader always punish fraud, because then he runs the risk that shirkers who are punished might go expose the whole network. So there's a huge tradeoff between efficiency and security.

And in fact, embezzlement seems to occur quite often: Hezbollah's fundraiser folks here in the United States, for instance, all drive fancy cars and live in swanky neighborhoods. Not terribly efficient. But why should governments care? Well, Shapiro makes an interesting suggestion: Perhaps counterterrorism agencies shouldn't publicize the freezing of terror funds, since then those financiers and middlemen have to explain the loss of that money to their superiors, which breeds distrust and possibly forces networks to take costly monitoring measures. Alternatively, given that governments tend to punish "middlemen" less than they punish, say, higher-ups or even the people carrying out the bombings (or whatever), that lowers the cost of being a middleman, which means that these spots are more likely to be filled be uncommitted shlubs just looking for a quick buck, who are in turn more likely to skim, graft, and double-cross. I don't know if that's a good policy to pursue actively, but it does create some nice inefficiency!