For analytical purposes, we focus on a well-defined set of issues that can be defined by the functions or by the risks covered by our analysis.<sup>3</sup> We approach security in terms of risks, including (Table 1): physical (risk of death or injuries); social (e.g. crime); or political (e.g. coup d’etat). The implications of these risks also differ depending on whether they occur mainly at the individual/household (micro), local/regional (meso), or national (macro) level.

**Table 1: Main Types and Levels of Security-Related Risks (Some Examples)**

|**Sources of risk**|**Micro**<br>**(idiosyncratic)**|**Meso**|**Macro**<br>**(covariate)**|
|---|---|---|---|
|**Physical**<br>**(Health**<br>**Life-cycle)**|**/**<br>Injury, disability<br>Death|||
|**Social**|Crime<br>Domestic violence|Terrorism<br>Gangs, organized crime|Civil strife<br>War<br>Social upheaval|
|**Political**|Ethnic<br>and<br>other<br>discrimination|Riots|Political default on social<br>programs<br>Coupd’état|

_Source: Based on Holzmann and Jørgensen (2000), which also includes other risks (e.g. natural and economic risks)._ The question is then how to manage these security-related risks. In this context of risk management, the framework developed in the seminal work of Holzmann and Jørgensen (2000) can be used. A fruitful distinction in this framework is between risk reduction (reducing the probability of a downside risk), mitigation (reducing the impact of a future downside risk), and coping (relieving the impact of a risk after it has materialized). This highlights that risks have a direct impact (for example, destruction of irrigation systems during a war has a direct cost in terms of reduced economic activity and loss of economic assets), an indirect impact due to coping strategies (e.g. selling livestock to cope with the economic loss, or leaving the country), and an indirect impact due to ex-ante risk reduction or mitigation measures (e.g. reducing irrigation investment due to fear of losing such assets). Importantly, these three impacts have both static (e.g. loss of life today) and dynamic (e.g. reduced human capital in the future) effects.

We posit that these various impacts can be summarized around three main channels, which encompass key drivers of growth and development: investment climate, human and social capital, and public institutions (see Aghion and Durlauf, 2005). From the Holzmann and Jørgensen framework, we can see that security-related risks have an impact on growth and development not only directly, but also through the way individuals, communities, and firms respond ex post when risks materialize (coping strategy) and ex ante to reduce the likelihood or magnitude of these shocks (Table 2). In this section, we review the key transmission links at play for each channel and suggest ways to assess their importance in a given country.

> 3 Although we are trying to provide a holistic view of the security – development nexus, some linkages are excluded. First, we do not consider the global level, which has received much attention after the terrorist attacks of September 11, 2001.  Second, and related, we are focusing on policy implications at the national level, not on international institutions or cooperation.  Also, our focus is on developing countries.  Finally, we do not consider some of the impacts of poor security on development more broadly defined, for instance on environment, migration, and youth.

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