The terrorist attacks of September 11, 2001, present significant
challenges for policymakers at all levels of government. Since
terrorism seems to present particularly acute risks for core urban areas,
it may influence economic and policy decisions in ways that affect the
spatial distribution of population and economic activity. These impacts,
however, will depend importantly on the assignment of responsibilities
among Federal, state, and local governments for dealing with terrorism and
on the distribution of the costs of these responsibilities. The
policy interactions among different levels of government, and between the
private and the public sectors, should provide students of political
economy with much insight into the nature of the policy process in the
American federation.