Getting Beyond Governments
Should aid be targeted at governments — or at people?
September 23, 2003
Under the often-changing facets of the Bush Administration's war on terror lie several unifying themes, not all conservative. A refreshingly pragmatic one is its reliance on the kindness of strangers.
But the strangers on whose kindness the Bush Administration's foreign policy increasingly relies are governments of places like Saudi Arabia, Ukraine, Pakistan, China and Uzbekistan — opportunistic friends whose long-term support is dubious.
Security experts agree that the real danger to the United States is no longer state-sponsored terrorism. Rather, independent groups of rogue terrorists are the main threat. Under these circumstances, a strategy focusing on governments — rather than people — has significant drawbacks. It may even be bound to fail.
To make matters worse, some of the reasons why it could backfire violently on the United States are obscure and need more open debate than most Americans feel comfortable undertaking on this subject. In particular, the current approach often creates multi-billion dollar incentives for other governments not to eradicate terror.
Let us examine the record of U.S. policies in the Middle East. Egypt has received $2 billion in U.S. aid per year for decades. If some of that money was used to keep al Qaeda affiliates out of the country after the tourist attacks at Luxor in 1997 — then these funds may have done some good.
Egypt's wealth indicators, however, are flat. Political repression in Egypt is brutal and the country's disaffected, no-prospects elite is breeding monsters like al Qaeda leaders Mohammed Atta and Ayman al-Zawahiri.
Embarrassingly, both are among the shining scions of Cairo's professional top shelf. Al-Zawahiri, the doctor, is Osama's loyal second. And Atta studied for years in Germany as he prepared to hit the broad side of Tower 1 in daylight at the controls of a jumbo jet.
They apparently devoted themselves to killing Americans because the lesser causes and challenges otherwise available to occupy Cairo's best minds bored them.
In Egypt, those $2 billion per year have bred neither democracy not progress — but rather poisonous, self-absorbed resentment. Given that the U.S. Congress is increasing that aid by the logic of past failures, one would have to expect a truly perverse result: more Egyptian mass-murderers on American streets — or in American skies.
Aid to Pakistan's President Musharraf so weakened him politically that he nearly lost the parliamentary election he rigged in October 2002. That weakness, in turn, forced him to release the current generation of Pakistan's murderous Kashmir freedom fighters from jail — just as soon as no one was paying attention.
Turkey, for its part, has shed past diplomatic acquiescence and seems newly focused on asking the United States for pots of money. The country calculated a $6 billion gap between what it has and what it needs to fight both terrorism and spillover from an Iraqi war.
When by the logic of its own democracy, Turkey opted out of the U.S. coalition fighting Saddam Hussein, it reduced its request to a mere billion or two. How ironic, that a democracy — so rare among majority Muslim countries — produced the Muslim world's most prominent dissent to recent U.S. action in Iraq.
But a billion here and a billion there, as Everett Dirksen said, and soon you're talking real money.
Even the $3 billion per year subsidy to Israel has a mixed record. That U.S. aid has financed a weaponification of Israel — meaning that the ample supply of U.S. arms to the Israel Defense Forces gives that army an enormous advantage over any conventional, government-sponsored foe. Yet however impressive that may be, it seems poorly targeted to counter threats strapped around teenagers' waists.
Worse still, past U.S. aid has effectively allowed the Sharon government to fund at least 40 new West Bank settlements. These, in turn, have bought votes for Mr. Sharon's Likud party — at the price of seething Palestinian resentment.
All of which goes to show that, as far as U.S. strategy is concerned, handing out money to governments is not the answer.
The idea of filling gaps between what overseas friends of the United States want to do — out of sheer good will, love for the United States, or both — and what their resources allow is not so much naïve as it is shop-worn.
Suffice it to recall that similar financing gaps justified development aid that persisted from the end of World War II despite only random success up to the 1990s.
We may want to convince ourselves that aid donors were merely unlucky because the scoundrels in power in developing countries often frustrated assistance goals. But decades of poor development results suggest the problem is deeper-rooted.
Ultimately, the problem is this: When aid fills a gap, the one strong incentive created is for the beneficiaries of that aid to maintain that gap.
If we learn nothing else from our rich, if sobering, experiments in global economic development, it should be that anti-terrorism aid to governments is no different from other types of aid.
It will create powerful incentives to maintain beneficiaries' "antiterrorism gaps." And those gaps depend on not quite eradicating terrorism.
Chastened by past failures, development economists are looking beyond subsidizing governments to shape directly the incentives, skills and hopes of those they want to help. Likewise, the Bush Administration must look beyond relying on friends in high places.
If it wants to address the facts on the ground spawning terrorism, it must recognize that individual rather than state terrorism is the threat. Then it will become very clear that addressing individual frustration — rather than the budget gaps of negligent states — must be the answer.
Co-Founder, GoalScreen LLC David Apgar is the author of Risk Intelligence: Learning to Manage What We Don’t Know (Harvard Business, 2006) and Relevance: Hitting Your Goals By Knowing What Matters (Jossey-Bass, 2008). Both books are based on ten years of best practices research for corporate finance teams as a managing director at the Corporate Executive […]