Kidnap

Abstract

Every year thousands of people are kidnapped for ransom. Their families, friends, or employers are forced into a fiendishly complex and harrowing transaction with violent criminals to retrieve them. How do you agree a ‘fair’ price for a loved one—who may be tortured or killed as you deliberate? How do you securely deliver a sack of cash to the criminals’ lair? What compels kidnappers to uphold their end of the bargain after payment? Well-off individuals, profitable firms, and international NGOs operate surprisingly safely in areas of high and extreme kidnap risks. Many of them have bought kidnap insurance. Kidnaps among the insured are very rare—and almost all insured hostages are safely retrieved. This book examines the intricate governance system created by special risk insurers at Lloyd’s of London to guide and shape their customers’ interactions with the criminal underworld, rebel groups, and traditional elites. By encouraging local leaders to protect rather than hassle the insured, most abductions can be prevented. If a kidnap occurs, there are robust protocols to structure the negotiation and maintain ransom discipline. Experienced specialists facilitate payments and safely retrieve hostages. Kidnap insurance underpins trade, aid, and investment in many informally governed, crime-ridden, and rebel-held areas of the world. In terrorist kidnaps, however, international law prohibits commercial resolutions and well-meaning politicians have stepped into the breach. The outcomes have been massive ransom inflation, political concessions, torture, and gruesome murders. This book explains why private governance works and why public governance is bound to fail in the market for hostages.

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