2011/01/06

Bureaucracies and national resources

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Why was Ancient Egypt able to build huge pyramids, why was Ancient China capable of building the Great Wall(s) and impressive channels?

Compare this to the marginal performance of many Third World nations which struggle with much less impressive challenges unless they get outside help.

The answer is of course the bureaucracy. Bureaucracy is almost a cuss word in developed countries, countries which got used to the benefits of bureaucracies and got used to hate bureaucracy excesses. Bureaucracies are nevertheless a necessity for a state which wants to harness its idle workforce and other idle resources for state services or great projects.

Most countries with an incapable state have much idle manpower; unemployed or underemployed men and women which could work a lot more at the price of some additional food (if it's manual work).
A modest increase in available food coupled with authority and coordination could suffice to revolutionise the state services and infrastructure of many poor countries, but this doesn't happen because their bureaucracies aren't effective.

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The new Afghan state is such an incapable state. It's excessively corrupt, and this is largely so because of the great influx of foreign cash. Whoever decided to spend dollars in the country itself was obviously unaware about how to develop a country.

A country does not need foreign printed paper for physical development; it needs material imports. The right point for spending the dollars was the border. All ordered and accepted imports should have been paid for with dollars before they passed the Afghan border - avoiding that any money enters the country at all. There was no reason for paying Afghan workers in dollars at all, ever. The Afghan state should have paid them with food and/or indigenous currency instead - and both should have been raised with a bureaucracy.

Claims that Afghanistan isn't able to maintain an army of 600,000 men without foreign assistance because of its weak economy are ridiculous. Of course it has the economic potential! There are enough weapons and enough unemployed or underemployed men in the country. It's just missing the bureaucracy to do it. That's not a sustainability or economical problem - it's an administrative problem.

It was only turned into an impossible fiscal problem by the infusion of enough foreign currency into the country to drive the wages for mercenaries up way beyond the countries' ability to sustain the payment of a large army.


No foreign money influx + a need to raise a bureaucratic that's able to deliver food and indigenous money + lots of manpower working on infrastructure = win.

Meanwhile, Pakistan would likely have experienced a smaller influx of foreign money as well.

In fact, forcing the Afghans to harness their resources would have reduced the overall costs of the whole stupidity for the Westerners a lot.
A Western Army outpost needs some manpower for fortifications and a safe path up to its hill? No problem, let the local authorities send some workers asap. No need to spend a single dollar if the administration is capable and the host nation actually an ally.

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Critique is easy, especially with the advantage of hindsight. I'll add a proposal for how to do it next time:

Spend money in stable states to arrange goods deliveries.
The goods deliveries begin at a slow pace, accelerate and then begin to dwindle again - all in a planned fashion with a strong commitment to no extension or enlargement of the program

The loss of goods to corruption (officials selling them for cash) or incompetence will be detected by third-party supervision (not the emotionally engaged aid workers) and lead to a 1:1 reduction of later deliveries as a predictable and enforced sanction mechanism against waste.

The young state (or community, tribe)  has to be forced to build an effective bureaucracy to harness its resources and the incoming goods in order to address problems, equip and sustain itself and to provide the necessary state services (gendarmerie, justice system, representation, basic education, preventive and basic health care).


Half of a decade should suffice to establish the bureaucracy, the basic services and to sustain at least the operating costs of the state entirely with domestic resources. There should be no follow-on program.


You think this would not have worked because they wouldn't have had an effective bureaucracy any way?
Well, it's better to have a cheap failure than an expensive failure that's the seed for future troubles.




Sven
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3 comments:

  1. Pushing imports on Afghanistan would have killed (as it nearly did) all local producers. Instead Afghanistan should have had high import tariffs to keep foreign goods out and to develop better food and general production.

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  2. I didn't mean food, but mostly investment goods. There's no Afghan production for most of these.

    I am aware of the effects of food aid on regional food markets and production.

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  3. I agree and disagree.

    I agree that the model used was inherantly wrong, however I dont believe yours would have helped, beyond being significantly cheaper.

    The biggest problem, is that Afghanistan is not a nation or state that can ever be functional.
    There is no desire for a central government.
    Theres more desire for the EU to expand its remit here than there is for the Mayor of Kabul to expand his over there.

    The Pyramids and the Great wall were built by bureaucracies that had, if not the support, at least the compliance of their populations.
    Central Bureaucracy in Afghanistan is shot at by much of the population. They have no wish to comply regardless of the proposed benefits.

    Now, we can, as you seem to suggest, drop down a level, and fund local buereaucracy, however that presents two new problems.
    The first, is they WILL call your bluff.
    Western Governments frequently ignore massive waste in their own bureaucracy, even encourage it.
    If we deliver the materials to build a road, and those half those materials are sold, we will not deny them the road. We just wont. We'll just say enough resources werent provided, and provide more.
    The NHS budget, as a proportion of GDP, has more than doubled since formation, yet still it screams its underfunded, and still the government shovels more money down the hole.

    The Second, is that who owns what is rather unclear.
    Afghanistan is sometime home to a very large transient population, that travels from Afghanistan, through Pakistan and into India.

    These nomadic tribes lay claim to all the pasture land that gets snowed upon in winter, the permanant residents question this ownership. This explosive relationship worked well enough until new technology ended the reliance of the village on imports from the nomads and the traditional cash crop of the nomads (a lamb skin that sold for $100,000 equiv a time) went belly up.
    The nomads have been mostly ignored so far, and guess where Johnny Taliban recruits from?

    Thats before two villages start argueing who owns a bridge or a field.

    Giving resources to one village to dig an irrigation channel to bring a field into production could see the village disliking you for accusing them of theft, the neighbouring village hating you for favouring another and the nomads killing you for giving away their land.

    Moderately Offtopic, I wrote a few musings on how a local army could be built from the ground up by a foreign power.
    Perhaps it could be applied to rebuilding the economy as well?
    http://theragingtory.blogspot.com/2010/11/global-guardian.html

    ReplyDelete

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