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Expeditionary Economics

By Carl J. Schramm

This article,  published in Foreign Affairs Journal, asserts that Washington’s method of reconstructing economies hit by conflicts and natural disasters is inadequate. It suggests that US military must build its competence in economics. And the object of economic reconstruction must be part of any successful  strategy of invasion, stabilization, and economic reconstruction. The writer calls this expeditionary economics. We are posting this article on our blog for our readers.

The United States’ experience with rebuilding economies in the aftermath of conflicts and natural disasters has evidenced serious shortcomings. After seven years of a U.S. presence in Iraq and over nine years in Afghanistan, the economies of those countries continue to falter and underperform. Meanwhile, the damage caused by the earthquake in Haiti early this year revealed deep economic problems, ones that had confronted earlier U.S. efforts to boost Haiti’s economy, and they will plague reconstruction efforts there for a long while.

Economic growth is critical to establishing social stability, which is the ultimate objective of these counterinsurgency campaigns and disaster-relief efforts.Various obstacles, such as insurgencies and inadequacies in infrastructure, have made economic development difficult in these countries, of course, but these difficulties cannot be blamed exclusively on such obstacles. A central element in the failure to establish robust economies in war-torn or disaster-stricken countries is the prevailing doctrine of international development, according to which strong economies cannot emerge in poor countries.

Yet there is a proven model for just such economic growth right in front of U.S. policymakers’ eyes: the entrepreneurial model practiced in the United States and elsewhere. This model rests to a huge extent on the dynamism of new firms, which constantly introduce innovations into the economy. Washington’s recent engagements have made it appreciate that postconflict economic reconstruction must become a core competence of the U.S. military. But this appreciation has not yet been followed by sufficient enabling actions. The U.S. Army Stability Operations field manual, published in 2009, offers no relevant guidance on what role economic development should play in the United States’ postconflict strategy or how to help build dynamic, growth-oriented economies. The manual epitomizes the central-planning mindset that prevails in the international development community.

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.”

CARL J. SCHRAMM is President and CEO of the Ewing Marion Kauffman Foundation and a co-author, with William J. Baumol and Robert E. Litan, of Good Capitalism, Bad Capitalism.

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