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Today’s guest on Economics Detective Radio is Anja Shortland of King’s College London, discussing her new book Kidnap: Inside the Ransom Business, where she brings an economist’s perspective to the shady world of the kidnapping for ransom business and to the professionals who specialize in getting hostages home safely. The book’s description reads as follows:

Kidnap for ransom is a lucrative but tricky business. Millions of people live, travel, and work in areas with significant kidnap risks, yet kidnaps of foreign workers, local VIPs, and tourists are surprisingly rare and the vast majority of abductions are peacefully resolved – often for remarkably low ransoms. In fact, the market for hostages is so well ordered that the crime is insurable. This is a puzzle: ransoming a hostage is the world’s most precarious trade. What would be the “right” price for your loved one – and can you avoid putting others at risk by paying it? What prevents criminals from maltreating hostages? How do you (safely) pay a ransom? And why would kidnappers release a potential future witness after receiving their money?

Kidnap: Inside the Ransom Business uncovers how a group of insurers at Lloyd’s of London have solved these thorny problems for their customers. Based on interviews with industry insiders (from both sides), as well as hostage stakeholders, it uncovers an intricate and powerful private governance system ordering transactions between the legal and the criminal economies.

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  • How do ransom and foreign policy relate? Kayla Mueller’s dad tells ‘Today’ show: Policy trumped lives – Yahoo News God, family, country. That is the order of precedent most people subscribe to, scratch God for non-theists but it is almost universal to put your family ahead of tribe. Currently the US threatens to prosecute anyone who tries to negotiate for their loved one who is a hostage. As if they are not a victim of terrorism but instead <i>supporting</i> terrorist by trying to save the life of their loved one. There are good arguments against paying a ransom since it could encourage more kidnappings but my question here is that if more people were being kidnapped would it possibly lead to any change in foreign policy? Are these hostages a victim of foreign policy or not?

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