An economic analysis of national reconstruction at gunpoint

Abstract

Can USA or other Western military forces establish self-sustaining liberal democracy in a country with a different type of politico-economic order? US government leaders believe they can do so, or so it appears, if we may judge by the dozens of attempts they have made since the late nineteenth century. From the Spanish– American War to the present wars in Afghanistan and Iraq, USA, British, and other Western leaders, relying on military force, have undertaken to remake defeated, subjugated, occupied, or colonized societies into market-oriented, democratically governed, rule-of-law systems. In the great majority of cases, these attempts have failed. In After War: The Political Economy of Exporting Democracy (Stanford, CA: Stanford University Press, 2008), Christopher J. Coyne brings economic analysis to bear in explaining why this quest so often fails. He also points the way toward a policy stance more likely to meet with success. Coyne defines his terms early on. He focuses his analysis on national reconstruction, by which he means “the rebuilding of both formal and informal institutions....[This] involves the restoration of physical infrastructure and facilities; minimal social services; and structural reform in the political, economic, social, and security sectors” (p. 9). He distinguishes reconstruction from the related terms state building, nation building, and peacekeeping, which he treats as subsets of reconstruction. Success in national reconstruction implies “the achievement of a self-sustaining liberal democratic, economic, and social order that does not rely on external monetary or military support” (p. 10). He intends his analysis to be purely positive, neither requiring nor entailing any normative assumptions or conclusions. Coyne’s specific contribution is the application of economic tools to the analysis of reconstruction and related matters. He proceeds not by specifying a formal mathematical model or by estimating the coefficients of an econometric model, but by introducing, explaining, and applying a number of economic concepts, principles, Rev Austrian Econ (2008) 21:341–347 DOI 10.1007/s11138-008-0041-9