Doing Bad by Doing Good: Why Humanitarian Action Fails

http://www.huffingtonpost.com/peter-van-buren/christopher-coyne-doing-bad-by-doing-good_b_3314052.html?utm_source=Alert-blogger

…large-scale attempts at reconstruction, long-term humanitarian aid,
nation building, counterinsurgency or whatever buzz word is in favor (I'll
use them interchangeably in this review), not only are destined to fail,
they often create more suffering through unintended consequences and
corruption than would have occurred simply by leaving the problem alone.
Coyne makes it clear that continued U.S. efforts at nation building in
Afghanistan (Haiti, Libya, Syria...) will not accomplish America's national
goals and will actually make the lives of the locals worse in the process.
This book should be required reading for every U.S. government employee
headed to Afghanistan and beyond.

The Man

Coyne's book is a careful, detailed, academic answer to the real-world
question surrounding U.S. reconstruction efforts: How is it possible that
well-funded, expertly staffed and, at least rhetorically, well-intentioned
humanitarian actions fail, often serially, as in Afghanistan?

Central to Coyne's explanation of why such efforts fail so spectacularly
(and they do; I saw it first hand in Iraq, and Coyne provides numerous
examples from Kosovo to Katrina) centers on the problem of "the man of the
humanitarian system." An economist, Coyne riffs off of Adam Smith's "man of
the system," the bureaucrat who thinks he can coordinate a complex economy.
In humanitarian terms, The Man thinks he can influence events from above,
ignorant (or just not caring) about the complex social and small-scale
political factors at work below. Having no idea of what is really going on,
while at the same time imaging he has complete power to influence events by
applying humanitarian cash, The Man can't help but fail. There is thus no
way large-scale humanitarian projects can large-scale change a society. The
connection between Coyne's theoretical and the reality of the U.S. State
Department staff sequestered in Iraq's Green Zone or holed up on military
bases in Afghanistan, hoping to create Jeffersonian democracies outside the
wire, is wickedly, sadly perfect.

The Man takes additional body blows in Coyne's book. One of the most
significant is in how internal political rewards drive spending decisions,
not on-the-ground needs. A bureaucrat, removed from the standard profit-loss
equation that governs businesses, allocates aid in ways that make Himself
look good, in ways that please his boss and in ways that produce what look
like short-term gains, neat photo-ops and the like. The Man is not
incentivized by a Washington tied to a 24 hour news cycle to take the long,
slow view that real development requires. The institutions The Man serves
(State, Defense, USAID) are also slow to decide, very slow to change, nearly
immune from boots-on-the-ground feedback and notoriously bad at information
sharing both internally and with each other. They rarely seek local input.
Failure is inevitable.

Subtractive Harm

With the fundamental base of ignorance and arrogance laid to explain
failure, Coyne moves on to address how harm is done. One begins with
subtractive harm, how most aid money is siphoned off into the pockets of the
contractors and Non-Governmental Organizations (NGOs), plus bureaucratic and
security overheard, such that very little reaches the country in need. For
example, of the nearly two billion dollars disbursed by the U.S. Government
to Haiti, less than two percent went to Haitian businesses. In Iraq, I
watched as USAID hired an American NGO based in Jordan specifically to
receive such money, who then hired an Iraqi subcontractor owned by a
Dubai-consortium, to get a local Iraqi to dig a simple well. Only a tiny,
tiny percentage of the money "spent" actually went toward digging the well;
the rest disappeared like water into the desert sand.

Some more bad news: in today's development world, The Man monopolizes the
show. Humanitarian aid and reconstruction have been militarized, primarily
by the U.S., as a tool of war; indeed, the U.S. Army in Iraq constantly
referred to money as a "weapons system," and planning sessions for aid
allotments were called non-lethal targeting. They followed the same rubric
as artillery missions or special forces raids in laying out goals,
resources, intel and desired outcomes. USAID, State and other parts of the
U.S. Government exert significant control over more indigenous NGOs simply
by flinging money around; do your own thing under the radar with little
money, or buy-in to the U.S. corporate vision of humanitarian aid. Many
chances at smaller, more nimble and responsive organizations doing good are
thus negated.

Real Harm

In addition to such subtractive harm, the flow of aid money into often poor
and disorganized countries breeds corruption. Coyne reckons some 97 percent
of the Afghan GNP is made up of foreign spending, with healthy chunks
skimmed off by corrupt politicians. I saw the same in Iraq, as the U.S.'
need for friendly partners and compliant politicians added massive overhead
(corruption, price inflation) to our efforts. A thousand Tony Sopranos
emerged alongside our efforts, demanding protection money so that supply
trucks weren't ambushed and requiring the U.S. to use "their" local
contractors to ensure no accidents would cripple a project. In Afghanistan,
such corruption is casually documented at the highest levels of government,
where even President Karzai boasts of receiving shopping bags of cash from
the CIA each month.

(One Afghan, perhaps humorously, commented "I would like the CIA. to know
they can start delivering money to the carpet shop my family owns any day
this week. But, please, no plastic bags. Kabul is choked with them. The
goats eat as many as they can, but still the Kabul River is filled with
them, waiting to be washed down to Pakistan, where they have enough problems
of their own.")

And of course those nasty unexpected consequences. The effect of billions of
dollars in "helpful" foreign money accompanied by thousands of helpful
foreign experts also dooms efforts. If the U.S. is willing to pay for trash
pickup (as in Iraq, for example) or build schools and roads, why should the
local government spend its time and money on the tasks? The problem of
course is that when foreign money drifts away on the newest political
breeze, there are no local systems in place to pick up the work. The same
problem occurs on a macro scale. Huge piles of free money air-dropping
in-country create their own form of shadow economy, one far-removed from
both local entrepreneurship and market forces. Again, when the free money
stops, there is no viable market economy in place to take up the slack.
Chaos at worst, corruption and haphazard progress at best, are inevitable.

Not-such-a bonus: Foreign workers, Coyne documents, often act with impunity,
if not formal immunity, from local laws. From UN workers fueling the child
sex trade in Africa, to State Department-hired Blackwater mercenaries
gunning down innocent Iraqi civilians in Nisour Square, bloody harm is often
done under the guise of good.

The End?

Coyne tries hard to come up with some sort of solution to all this. Though
he bypasses the question of whether countries like the U.S. should make
reconstruction and large-scale aid national policy, he accepts that they
will. What to do? Coyne posits that the only chance for success is economic
freedom. Encouraging discovery via entrepreneurship and access to the free
market while rolling back the state in humanitarian interventions will allow
the space for genuine economic and societal progress. Coyne concludes this
process is messy and will often appear misguided to outsiders, but that it
is the only way to achieve society-wide development.

And good luck to those who try and press such change on the U.S. efforts. In
the end, Coyne's book is extremely valuable as a way of understanding why
current efforts have failed, and why future ones likely will fail, rather
than as a prescription for fixing things. That's a bit of an unfair
criticism; changing U.S. policy on such a fundamental level is no simple
task and Coyne, to his credit, gives it a try. I may have meant well
personally, but failed in my own efforts at reconstruction and then writing
about it to do much more than lay out the details. Coyne deserves much
credit for formalizing what many of us experienced, and for at least laying
out the theoretical construct of a more successful approach.

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