Bureaucracy and economic development (and yes, Afghanistan)

Reagan once observed that "the most terrifying words in the English language are: I'm from the government and I'm here to help." Turns out if you're trying to build a market economy the only thing worse than too much government is not enough, according to a study by Brown, Earle and Gehlbach.

Counterintuitively, their examination of privatized firms in post-Soviet Republics found that larger bureaucracies did better at creating an environment conducive to successful economic growth than smaller bureaucracies. Having enough bureaucrats to administer business permits and prevent power from becoming concentrated in the hands of just a few bureaucrats who can extort bribes at whatever price they choose turns out to be important.

Another finding may offer solace to your inner Jeffersonian. National-level bureaucracies did little to improve firm success. Having a reasonably sized bureaucracy at the regional and local level is what's important. Those are the bureaucrats that work most directly with small businesses, and are most closely engaged in constituent services.

If we look to Afghanistan we've reason to be supportive of much of the population (read constituent service) Gen. McChrystal and Amb. Eikenberry's population-centric strategy calls for. Bit of a leap? If we hope to make Afghans' lives better, we need to focus on - well, the Afghans themselves. It's a cliche by now, but higher employment reduces incentives for young men to seek their fortune with the Taliban.

The danger of this cliche is some make the leap that we could simply employ Afghans in work programs for less than the cost of our war effort there. Unfortunately that's untenable so long as the state, or a third-party enforcer like the U.S., is unable to protect the population from coercion. Think LRA-style child soldiers.

Typically only around 5% of a population takes active part in civil wars. Given how little it takes to upset the applecart, we should be sensitive to how big a challenge the stabilization project is, and how skeptical we should be that economic development alone can solve our problems in Afghanistan.

The National Solidarity Program (NSP) is an interesting experiment in improving both local governance and providing funding for local level programs that directly impact Afghans. Rather than foreign assistance being funneled through expensive contractors and foreign-national run NGOs, it goes directly from an Afghan ministry (there are pockets of competence within the government of Afghanistan) to locally-elected Community Development Councils (CDCs). CDCs are one of the few mechanisms for local governance that has escaped politicization by Karzai's government (though recent leadership changes may have endangered its independence). MIT's Andrew Beath is conducting an impact study that has found NSP to be an effective program in ways few other programs can claim.

For more on governance capacity-building in Afghanistan listen to the Institute for State Effectiveness's Clare Lockhart.

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Balancing the National Security Budgetary Pie

How do we know when we've hit that "sweetspot" where we've adequately invested in our civilian foreign policy tools (e.g. diplomats and foreign assistance "carrots") versus how much we've spent on defense or homeland security. Unfortunately there's no complex quantitative model that can offer us a refined account of what that balance should look like - though considering the lack of trust we have in technocrats, that's just as well. Our best resource is looking at real world trends, and looking at simple investment metrics to give us a sense of whether or not 1) we need a course correction, and 2) whether or not we've achieved a course correction. This post deals with the second challenge.

It's helpful to look at changes in funding from one year to the next for the Department of Defense, compared to State and Homeland Security. It gives you a much stronger sense of how real world events impact the distribution of resources across our national security system, and how much political reality insulates budgets from real world requirements. By looking at whether one account gets a bigger bump in a given fiscal year, we can evaluate whether reality has kept up with rhetoric.





2009 was the first year where the increase to the State and International Affairs Budget was greater than greater than what DOD experienced, an important driver of which was the Obama Administration's supplemental request. Unfortunately the FY11 budget won't be accurate until we know how much money will appear in supplemental requests. But at first blush it appears the Obama Administration has taken seriously its own pledge to strengthen the civilian instruments of national power. What remains unclear is whether this will be sustainable in the face of the current economic crisis.

At a Congressman's fundraiser last month a donor asked, "how are we able to find money for Haiti on such short notice, when we still don't have funding for emergency communications systems back in the district?" A valid question, and one that will have to be answered by Congress as it handles the State Department and Foreign Operations bill this year.

In the graph above, if a data point is at "0" on the vertical axis, there was no budget change from the previous year. If it's at $20 billion, then the given department experienced a $20 billion bump up from the previous year. I highlight major events driving fluctuations in spending. For instance, the 2007 bump in DOD spending was largely driven by the "surge" in Iraq. The 1991 dip in DOD spending is driven by the U.S. government catching on to the fact the Cold War had ended.

Typically discussions of Defense versus State Department budgeting become difficult to parse because of the differences in scale. An Abrams tank or F-35 is simply much more expensive than a foreign service officer, rendering direct comparisons of DOD and State Department budgets slightly absurd. Visual representations of absolute spending levels or shares of the budget pie become insensitive to changing priorities, and fail to capture what's really going on.

By controlling for the base budget of previous years we begin to see how seriously different Administrations and Congress regard spending on State or the DOD. Since Secretary Gates announced that a "dramatic increase in spending on the civilian instruments of national security" was required in his 2007 Kansas State University speech, he has continued to advocate for a strong State Department and other civilian institutions to take on roles that the DOD hasn't built institutional competency in - reconstruction, conflict resolution, institution building, etc.

If we follow the money, we know we're not there yet.

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Security Assistance, DOD win, State loss?

The Cable picks up on DOD retaining the "Global Train and Equip Fund", also called 1206 for the section of the original authorizing legislation.

The whole story is a little more complex. State ends up winning full control of the section 1207 funds - an account that allowed DOD to transfer funds to State to conduct stabilization and reconstruction programs. Whether State will continue to coordinate priorities with DOD now that they have autonomous control over those funds is an open question.

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Counterinsurgency and Mentoring

I love Noah Shachtman, but wish that when he asks if the U.S. military can accomplish the train and equip mission in Afghanistan and shows a video highlighting not only ANA on drugs but also some Marines responding with a drill instructor mentality, he'd also point out his colleague David Axe captured on video another soldier using best practices.

Here's what to do.

Here's what not to do.

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Assessing the Adminisration's Afghanistan Strategy

Granted the strategy looks like a camel. But I like it anyway.

The stakes in Afghanistan and Pakistan are too high to walk away lightly, but the obstacles to anything that looks like success are too high to confidently invest billions of dollars and thousands of lives in the endeavor. Rather than continue to drift into a Vietnam-like quagmire as we have been, or simply withdrawal with potentially disastrous consequences, this strategy offers a moment of clarity.

This strategy clarifies that this is the moment for Karzai to decide whether or not he wants to commit to reform while he has U.S. support, or risk not only his regime but his personal survival on the loyalty and efficacy of the deals he can cut with local warlords after the U.S. withdraws. For Pakistan it clarifies that if they want the U.S. to remain in Afghanistan for the long-term they must assist us against the Afghan Taliban, or risk their ability to retain strategic depth in Afghanistan on the Taliban’s ability to keep India out. In the meanwhile our core regional concern with Pakistan’s stability is assisted by the time this strategy buys for the Pakistan military to develop counterinsurgency capabilities to fight the Pakistan Taliban and so ensure the security of their own nuclear stockpile.

We can’t fight or buy our way to success in Afghanistan on our own. The best we can do is offer our partners in Afghanistan and Pakistan a window for success, and the additional 30k troops (w/ 10k option) does that. Either our allies oblige us or they don’t. Pretending for another year or two that we’ll stay in Afghanistan indefinitely regardless of cost won’t convince anyone we’ve a long-term strategic commitment to the region if the last 8 years hasn’t.

Tactical issues:

- Leveraging local tribal and village militias is positive, attempts to reproduce the Awakening. Risk is of setting off further intertribal wars.

- 10k option for next year is meaningless, we wouldn’t be able to get them out there any faster if we wanted to.

- U.S. aid will be going to individual ministries and local leaders based on ability to fight corruption and provide services. This is similar to the NSP model.

- 2011 withdrawal timeline will offer the Democrat base some reassurance for mid-terms, and more so for 2012 election. As we know from Iraq, there's plenty of flexibility even in a theoretically hard time line like this one.

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Development and the national security narrative: How long?

There's a time limit to how long development advocates can frame their crusade in terms of national security. The reason the national security lens gets any purchase at all is because of fragile states, and fragile states only because of Afghanistan.

If support for war in Afghanistan is deteriorating, how long before the tide shifts back against looking at development as a national security priority? And that narrative in turn becomes subsumed in a neo-realist perspective that frames attempts to stabilize fragile states as filled w/ hubris?

Afghanistan's chief challenge is governance, a sector the military seems more disposed to address than the development community. If State and USAID are unable to seriously address the core problems of fragile states, when this narrow window of opportunity closes Congress will see the additional resources they've invested in State and USAID as wasted. Is that unfair? Perhaps, but that's how it is.

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IRI Pakistan Survey - Mixed Bag

The data tells a story of Pakistanis that fear their country is going in the wrong direction, but largely for economic reasons. Their perception of religious extremism, the Taliban and Al Qaeda as problems have grown. Support for military operations against the Taliban have grown, but those operations have to be Pakistani operations. They continue to oppose cooperation with the U.S. (Obama provided a slight bump which has since disappeared), and any U.S. operations in Pakistan. A substantial minority still like Osama Bin Ladin (9%).

Those who feel we're in Afghanistan in order to prevent Pakistan from degenerating into chaos should be paying attention to these numbers. They're an important component of an evaluation of how necessary our presence in Afghanistan is to prevent insurgents based there from undermining stability in Pakistan, along with military and economic factors.

Of course the fact remains, there isn't much we can do to effect Pakistan directly. But just because your neighbor's garden hose isn't long enough to reach your burning house, doesn't mean you should start spraying his house down for lack of anything else to do.

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Building Afghan Intelligence Capacity, or Building Contractor Wallet Capacity?

Pincus points out the DOD is hiring contractors to translate the U.S. Army intelligence field manual into an Afghan-friendly version. Isn't this exactly how we're supposed to have learned not to do things? If you're trying to build capacity you have to follow the FUBU principle - "For Us, By Us."

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Senate Appropriators vs Authorizers - Building Afghanistan's Security Forces

While Sen. Levin is calling for the rapid expansion of Afghanistan's security forces - to facilitate a more rapid US withdrawal - the Senate Approps committee is cutting the Administration's request (sorry, CQ subscription).

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Afghanistan, governance capacity and foreign assistance pathologies

Why should we care about governance capacity building, and why do our current aid institutions fail so miserably?

Lockhart before the SFRC, 17 Sept 2009.

Back in 2002, during the preparation of Afghanistan’s first post-Bonn budget, Afghanistan required a budget of $500m for the year to be able to pay its 240,000 civil servants (including doctors, teachers, and engineers) their basic salaries of $50 per month and to cover essential running costs. As the Treasury was empty, assistance was required. Unfortunately, donors initially committed only $20 million to the 2002 Afghan budget, meaning that Afghanistan’s leaders could never in the 2002-4 period meet the basic costs of sustaining services. At the same time, $1.7 billion was committed to an aid system to build parallel organizations, which ended up employing most of the same doctors and teachers as drivers, assistants and translators to operate small projects at significant multiples of their former salaries. While some additional funds were later committed to the

World Bank-run Afghan Reconstruction Trust Fund, this was never enough to sustain basic governance, and the civil service atrophied. Rather than support the essential nation-wide services and programs within a framework of rule of law and policy, donors launched thousands of small, badly-coordinated projects. Billions of dollars were spent through the aid complex, resulting in little tangible change for most Afghan citizens. Their perception of aid projects was most vividly captured for me in a story told to me by villagers in a remote district of Bamiyan, who described their multi-million dollar project going up in smoke.

The prescriptions of the “aid complex” not only by-passed, but actively undermined Afghan capability: for example, it was aid donors forbade any investment in the Afghan budget for education or training over the age of 11, citing the overriding imperative of investing in primary education. Similarly, a $60 million provincial and district governance program designed to restore policing and justice services was turned down in 2002 for funding on the basis that governance was not “poverty-reducing”.

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