Governments Should Never Pay Ransoms

Tuesday, December 23, 2014

I've been hearing more and more talk about how governments should pay ransoms when journalists are kidnapped. After all, journalists do important work for the nation. Doesn't it make sense for the nation to pay relatively small sums of money to ensure their safety?

I think that governments should do their best to ensure the safety of all of their citizens. That's exactly why no ransom should ever be paid for anyone - reporter, politician or military serviceman.

Why do I say this? Like all matters in economics, it comes down to incentives. In the short run, not paying a ransom can cost decision makers dearly. Not only is there the obvious potential for loss of life, but there is often significant political blowback as well.

When a government so much as hints that it considers paying a ransom to be a viable solution to a hostage situation, it creates the appearance of a marketplace for kidnapping. As we all know, when a marketplace exists, large numbers of suppliers (in this case kidnappers) will attempt to meet as much demand as they can find.

Paying ransoms leads to more kidnapping, not less. As difficult and painful as it may be, governments and institutions have to make it clear that the long-term safety of its people is a top priority. As such, they may never consider paying ransom to be a viable response to any kidnapping.

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