Last week, the Bush administration announced plans to change how it will spend nearly 20 percent of the $18.4 billion in approved aid for Iraq. The money will be shifted from rebuilding infrastructure to security, from capital improvements to employment generation, and from physical construction to social engineering projects. If these priorities had been adopted sooner, the situation in Iraq would probably be better than it is today.
Administration officials have explained that deteriorating security requires increased efforts to train and equip Iraqi police and military forces, and makes the protection of large construction projects difficult. They have also expressed the need for programs to get young Iraqi men off the streets and employed.
And indeed, America's plans to focus aid on modernizing Iraq's electric grid, sewage systems and communications infrastructure at American taxpayers' expense have been an aberration—out of keeping with recent American nation-building experience in places like Bosnia, Haiti, and Kosovo and with post—World War II strategies for democratizing Germany and Japan.
The object of nation-building is to return power to a competent, responsible and representative local government as soon as possible.
In a country like Iraq where the governmental structure has collapsed, the first priority is to establish public security. Second is to begin rebuilding the local structures for governance. Third is to create an environment in which basic commerce can occur—where people can buy and sell goods and services and get paid in a stable currency. Fourth is to promote political reforms, stimulate the growth of civil society, build political parties and a free press, prepare for elections and organize representative government. Fifth, and last, is improving roads, bridges, electricity, water, telephones and the rest.
This last category of spending normally comes last because such projects take a long time to complete and the payoff on investment is very slow. These projects are also very expensive, far more than other objectives. And unlike investments in other sectors, reconstruction projects are ultimately profitable and can normally pay for themselves. That is why money for large-scale construction projects routinely comes from loans financed through the World Bank or regional development banks, not from grants by donor governments.
In preparing for the occupation of Iraq, the administration chose to transfer responsibility for Iraqi reconstruction from the State Department and the Agency for International Development to the Defense Department and the United States Army Corps of Engineers.
The Defense Department brought a perspective to the tasks of nation-building that reflected its own experiences in building military bases and procuring weapons systems, which led it to largely ignore recent and historical experiences with nation-building. Instead, the Pentagon focused more on hardware than software, on improving infrastructure rather than social structures. It also relied more on large American military contractors than on Iraqi contractors and smaller nonprofit groups specializing in political transformation.
Giving first priority to improving electricity and sewage services, and second priority to political parties and elections was inconsistent with precedents set like Bosnia, Kosovo and even Afghanistan. Critical of earlier efforts in the Balkans, in particular, and frustrated with the slow progress being made in Afghanistan, the Bush administration used as its model the very successful American occupations and transformations of Germany and Japan, and upon the Marshall Plan in Europe.
But administration officials fundamentally misread the lessons of nation-building at the end of World War II. In Germany and Japan, the United States had put in place political reforms that today remain the underpinnings of democracy in both countries, before it provided substantial economic aid, beyond basic humanitarian assistance.
The Marshall Plan did not start in Germany until 1948, and Japan never received any Marshall Plan assistance. Germany's economic takeoff came only after its democratic reforms had been carried out, and Japan's early prosperity derived from local American procurement connected with the Korean War beginning in the early 1950's. In both, political transformation preceded economic transformation. Democracy preceded prosperity.
The administration's plan to shift aid from large construction projects to security, employment and social reform is welcome, not simply because it deals with the deteriorating security situation, but because it better helps the nation become secure and democratic. A secure and democratic Iraq will have no difficulty persuading others to help it rebuild.
James Dobbins, director of the International Security and Defense Policy Center at the RAND Corporation, was special envoy for the Clinton and Bush administrations on reconstruction efforts in Afghanistan, Bosnia, Haiti, Kosovo and Somalia.
This commentary originally appeared in New York Times on September 22, 2004. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.