Policy Analysis Market

Introduction

The Defense Advanced Research Projects Agency (DARPA) was born in the uncertain days after the Soviets launched Sputnik in 1958. Its mission was to become an engine of technological change that would bridge the gap between fundamental discoveries and their military use (Bray, 2003). Over the last five decades, the Agency has efficiently gone about its business in relative obscurity, in many cases not getting as much credit as it deserved. The Agency first developed the model for the internet as well as stealth technology. More recently, DARPA innovations have spanned a wide array of technologies. To name a couple: computers that correct a user's mistakes or fix themselves when they malfunction and new stimulants to keep soldiers awake and alert for seven consecutive days.

Because DARPA is mandated to take on risky projects, failures have occurred. For the most part, however, the agency's low profile has protected it from inaccurate scare stories cropping up in the popular press. However, in 2003 DARPA has managed to make the front pages twice, both times with disastrous results. Earlier in the year Congress moved to scale back the agency's Terrorism Information Awareness Program (TIA). In an effort to spot patterns of terrorist activity, this program proposed the development of advanced computer systems capable of scanning commercial databases containing information on millions of Americans.

Then, in late July, the Agency backed off a plan to set up a kind of futures market (Policy Analysis Market or PAM) that would allow investors to earn profits by betting on the likelihood of such events as regime changes in the Middle East. Critics, mainly politicians and op-ed writers, attacked the futures project on the grounds that it was unethical and in bad taste to accept wagers on the fate of foreign leaders and the likelihood of terrorist attacks. The project was canceled