An Economist Looks at the Politics of Reconstruction

It’s a common observation these days that U.S.-led reconstruction efforts in Iraq and Afghanistan are not going as well as predicted and that the mission is far from accomplished. Are efforts to export democracy by military intervention doomed to failure, i.e., economic failure? If so, should we consider other ways of fostering democratic reforms?

In After War (forthcoming in November 2007) Chris Coyne takes up these questions by bringing an economic mindset to a topic traditionally tackled by historians, policymakers and political scientists.  Economics focuses on how incentives influence human action. According to an economic point of view, successful social change require finding and establishing a set of incentives that would make citizens prefer a liberal democratic order over any available alternatives.  These opportunities might include the ability to vote, open a business, worship freely, or utilize the legal system, among other possibilities. However, in his forthcoming book, Coyne spells out that efforts to foster liberal democracy through foreign intervention--from Haiti to Somalia and Iraq-- have been unsuccessful in large part because of flaws inherent in the politics of such interventions. After War is a fascinating study of the distortions that politics introduces.

For instance, instead of giving incentives to citizens of occupying countries the political process that gets underway puts the bureaucracy (with the competing goals of its various agencies)  and special interests  in charge.   It fosters situations in which corporations that provide the most in campaign contributions receive the largest contracts (yes, think Halliburton).  As a result, ordinary citizens (and their leaders) don't perceive any advantages in cooperating with their "liberators." In a recent discussion in the Economist, Coyne discusses how conflicts between various government agencies compromised the reconstruction program.