Tag: Haiti

Expeditionary Economics

The U.S. military is now a major player in economic development. In Iraq and Afghanistan, for example, economic stabilization is a core tenet of its counterinsurgency strategy. Which makes good sense, in theory, but raises a troubling practical question: does the military actually know anything about economic stabilization and development?

In a recent essay in Foreign Affairs (Expeditionary Economics: Spurring Growth after Conflicts and Disasters), Carl Schramm answers in the negative. The U.S. military does not have these skills in anywhere near the measure that it should. He then recommends that:

[P]ostconflict economic reconstruction must become a core competence of the U.S. military. … It is imperative that the U.S. military develop its competence in economics. It must establish a new field of inquiry that treats economic reconstruction as part of any successful three-legged strategy of invasion, stabilization or pacification, and economic reconstruction. Call this “expeditionary economics.”

Schramm goes on to argue that expeditionary economics should emphasize entrepreneurship and “messy” capitalism, not just large-scale infrastructure efforts that often get the most attention. If you are interested in these issues, his essay is definitely worth a read.

For more context and other views, you should also check out the conference that Kauffman held to discuss these issues. You can read highlights from the conference here.

Some excerpts (not attributed to any of the specific participants):

The core idea behind the Marshall Plan was to stimulate the private sector through direct financial support of businesses rather than distribution through local government institutions, and it continues to serve as a potential model for efforts today, especially insofar as it deeply considered the nature of the war and the pre-existing institutional conditions in Europe.

…

Stability and economic development operations in Iraq and Afghanistan have been problematic for quite different reasons. In Iraq, the United States squandered the opportunity to demonstrate a real concern for the welfare of the Iraqi people in the months after the invasion because it failed to adequately plan for stabilization and reconstruction activities after major combat operations—as a result, both the economic and security planning systems failed. Many government agencies were complicit in this failure, including the military. In Afghanistan, the rush to respond and the limits of time constrained stabilization and reconstruction planning along with a desire to maintain a light footprint. Military, political, and development strategy was cobbled together as the conflict progressed. This meant the United States began trying to catch up with ideas, and has been trying to acquire and deploy resources ever since. As part of a “peacebuilding” strategy for the future, the military should address these core challenges to improve its stabilization operations

…

One pre-requisite of a market economy might be the rule of law, although China’s success over the past few decades offers an interesting challenge to that premise.

…

There is debate and uncertainty over what we mean by the phrase, “rule of law,” and whether it simply includes a justice system, courts, and efficient policing or extends beyond that to contracts, finance, commerce, and beyond. The answer is no one knows, and the rules of the game don’t have to be perfect—they just have to be certain and perceived as fair. The two things businesses always look for are stability and certainty.

…

In war, just as there are human casualties, there also are financial casualties, and we need to accept this reality. Some dollars will be misappropriated, and some will go to the enemy, to criminal networks, to ineffective local leaders, and to bad projects. This doesn’t make it okay, but we need a productive dialogue to determine what is a reasonable level of these financial casualties.

…

Some disagree that economics is … a soldier’s job. Yet, economics is required to win, and a soldier’s job is to win. The military has no choice but to use economics as a weapon in stability operations, so let’s be as good as possible at it. What we need to be thinking is, “What are the appropriate economic principles we can teach military leaders so they can use them to accomplish their mission?”

Are Chile’s Building Codes Getting Too Much Credit?

Many commentators have pointed to Chile’s stringent building codes as a key reason why the death toll from its earthquake (in the hundreds at this writing) has been so much lower than in Haiti (in the hundreds of thousands).

Unfortunately, much of this commentary confuses two separate concepts: building quality and building codes. Building quality clearly played a key role in minimizing death and damage from the earthquake. Indeed, Chilean buildings are well-known for incorporating earthquake resistance techniques such as the strong columns, weak beams system.

That doesn’t imply, however, that building codes deserve credit for the quality of the buildings. Indeed, I can think of three other factors that likely deserve some credit as well:

  • Chile’s wealth. In 2009, per capita income in Chile was eleven times higher than in Haiti. Even in the absence of any building codes, the relatively rich Chileans would not be living in buildings as fragile as those in Haiti.
  • Chile’s history of earthquakes. In 1960, Chile suffered the largest earthquake on record (9.5), killing several thousand people. Even in the absence of any building codes, memories of that quake would have encouraged Chileans to construct more earthquake-resistant buildings. In Haiti, in contrast, the last major earthquake was in 1842, before the memories of any living Haitians.
  • Chile’s enforcement of building codes. Building codes are just pieces of paper (or their electronic equivalent). Governments can create all the codes they want, but if unscrupulous officials don’t enforce them—or get bribed to look the other way—they can be next to useless. Chile ranked among the 20 least corrupt nations in the world in 2009; Haiti was among the 12 most corrupt.

My point is not that building codes had no effect. I bet they did. But that’s not the whole story when it comes to building quality. Chileans would have built better buildings than Haitians anyway.  And Chileans live in a society where building codes actually get enforced. For both those reasons, we shouldn’t overstate the importance of building codes alone in explaining Chile’s resilience and Haiti’s devastation. Nor should we leap to the conclusion that the way to deal with Haiti’s future earthquake threats is to import Chile’s building code.

My second point is a scientific one. In principle, Chile’s earthquake provides an opportunity for researchers to evaluate just how important building codes have been in protecting Chile’s buildings. Enterprising analysts should look for situations that allow us to identify the effect of building codes versus other factors. For example, much has been made of the building code revisions that Chile adopted in 1995. That suggests one empirical strategy: compare what happened to buildings that were constructed in 1994 to buildings that were constructed in 1996. Did the 1996 ones perform much better? That would suggest that the building codes really helped. Or did 1994 buildings do just as well as the 1996 ones? That would suggest that the codes had little effect, perhaps because they were just capturing practices that were already in use by Chilean builders.

For related discussions, see this piece from Fast Company and this piece from the Infrastructurist. The comments on the second piece include an interesting discussion of the extent to which Chilean buildings would have been earthquake resistant in the absence of building codes. One commentator offers the extreme view that the building codes had no effect, while others offer the other extreme. I think the truth is in the middle.