Foreign Policy Explained, Ep. 9: Is Nation-Building Worth The Cost?

Foreign Policy (playlist): Learn how we can promote peace and human flourishing through our approaches to foreign policy. 
Foreign Policy (program): Join professors Christopher Coyne and Abigail Hall Blanco as they explore the history of foreign policy, the military industrial complex, and the effects of war on domestic policies. 

In 2003, a US led coalition invaded Iraq under the pretense that Iraq was harboring weapons of mass destruction. But another popular reason was to bring hope and progress to the lives of millions of Iraqis by showing them the power of freedom and to make Iraq safe for democracy.
That was the objective. But over the course of the next ten years, over 100,000 people died, most of the them civilians and the US spent over $800 billion on military infrastructure. The rebuilding efforts in Iraq were an abysmal failure and the country is worse off today than it was in 2003.
In 2012, 1.3 million Iraqis were considered internally displaced and the majority of the population is not economically active. In 2011, Iraqi households received an average of 7.6 hours of electricity a day. Today, corruption in government remains rampant. And both fraud and waste have been pervasive in the contracting process to rebuild the country.
According to one estimate, at least 31 billion and possibly as much as $60 billion has been lost to contract waste and fraud in America’s operations in Iraq and Afghanistan. And in Afghanistan a similar story could be told. In a recent assessment of the reconstruction effort, the special inspector attributed the failures in Afghanistan to corruption, poor contract management and oversight, as well as a lack of planning and strategy.
When the US military overthrows a problematic government, interventionist argue that the army can’t simply pack up and leave. Wars are destabilizing and an even more dangerous leader might take over. According to this logic, once the US Government intervenes abroad it must engage in nation-building. This is when outside governments attempt to build economic, social, legal, and political institutions in the occupied country.
Many policy makers see the US Constitution as a blueprint for how countries become wealthy and democratic. By their logic, all that’s needed is to implement that blueprint with lots of experts and money, resulting in a sustainable, liberal, democratic country. But this line of logic doesn’t address significant constraints complicating that goal.
Perhaps the biggest constraint in building nations is the knowledge problem. Success in nation-building is not simply a matter of taking the rules that work in one society and imposing them on another. This is because underlying belief systems, values, and ideals, often differ across societies. For example, what works in the United States may not work in the Middle East.
General Stanley McChrystal, former commander of the US forces in Afghanistan, noted that the armed forces had a very superficial understanding of the situation and history of the country and had an overly simplistic view of recent history. Given this lack of knowledge, why should we expect foreign occupiers to succeed in establishing these institutions?
And then there’s the issue of incentives. Are policymakers, contractors, and soldiers motivated to act for the good of the citizens of the country? Or are they mostly motivated by self interest which may not be to the benefit of the citizens of the host country. Consider the incentives the bureaucrats face.
The success of a bureau is judged by the size of its budget and by the number of bureaucrats employed. And foreign occupations provide an excellent opportunity to increase both. While bureaus are supposed to be working together towards some common goal, they often end up fighting with each other in the hopes of establishing a dominant position and securing a bigger share of the resources associated with the intervention.
Incentives and the knowledge problem provide two reasons for us to be skeptical of the ability of the US government to produce liberal institution change in foreign societies. This isn’t to say that government interventions abroad can’t succeed in specific instances. But there are good reasons to lack confidence that foreign interventions will work in the vast majority of cases.