Paul Collier is back again with cost-benefit analysis of foreign aid and military invention in conflict areas. The short story is that foreign aid and military intervention can and indeed usually do reduce bloodshed around the world. The invasion of a centrally-controlled and ordered Iraq, Collier notes, is not representative of the usual efficiency and effectiveness of such engagements; “the far more typical scenario is political violence within a small, low-income, low-growth nation burdened with strong ethnic divisions.”
Collier begins by arguing that conditions prohibiting military spending of aid packages by host countries is important, as “about 11% of all aid is currently diverted into military spending, which significantly increases the likelihood of violence.” The reduction in risk and increase in discretionary cash would allow benefits from aid to more than quadruple costs.
Even still, aid is less cost effective than the use of peacekeeping forces:
“Compared with no deployment, spending $100 million on a peacekeeping initiative reduces the ten-year risk of conflict from around 38% to 16.5%. At $200 million per year, the risk falls further, to around 12.8%. At $500 million, it goes down to 9%, and at $850 million drops to 7.3%.”
This does not include the conflict abatement that occurs because the belligerents know that well-armed, well-trained troops will be dispatched if they are to act violently. To that end, Collier recommends “an “over the horizon” security guarantee: a reliable commitment to dispatch troops if they are needed. A guarantee could be offered by the UN or a regional power like the African Union to protect governments that came to power through certified democratic elections.”
Collier believes that such “a guarantee could credibly help the world avoid three of the four new civil wars expected in low-income countries in each decade.”
What would the cost be for a capable security force? Around $2 billion annually. And the benefits? Collier argues that the returns on the “significant reduction in the risk of conflict and faster economic growth are between 11.5 and 39 times higher.”
Not a bad investment.
Collier concludes by providing an overview of a general strategy for helping nations escape the conflict trap, which I would endorse without question: “Combine aid, limits on military spending, peacekeeping forces, and “over the horizon” security guarantees in a way that ensures that the developed world deals with hot spots consistently. The UN Peace-Building Commission has the potential to coordinate this. The annual cost of the full package would be $10.8 billion, but the benefits to the world would be at least five times higher.”
The problem is no one, but the US (for all its problems), has shown much of a commitment to aid with this public good.