Why do foreign policy adventures so often go awry? In this week’s Learn Liberty video, Professor Abby Hall Blanco reveals how economic principles–like incentives and constraints—can explain the frequent poor outcomes of foreign policy.
Incentives are usually defined by economists as the evaluation of the costs and benefits of a particular decision. But incentives may be misaligned in the case of foreign policy. For example, a congressman in a military district has an incentive to push for foreign intervention even if it’s a bad idea for the country as a whole.
Poor foreign policy also stems from a constraint in understanding—known as the knowledge problem. In many foreign policy decisions it is vital to be aware of the local culture, customs, and internal structure. But this local knowledge is almost impossible to achieve. Lawmakers may have the best intentions, but they are not fully equipped to make informed decisions, potentially creating worse outcomes than what already exists.
Given the reality of misaligned incentives and the knowledge problem, it’s wise to be skeptical of foreign intervention.