After War: The Political Economy of Exporting Democracy

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Why does liberal democracy take hold in some countries but not in others? Why do we observe such different outcomes in military interventions, from Germany and Japan to Afghanistan and Iraq? Do efforts to export democracy help as much as they hurt? These are some of the most enduring questions of our time.

Historically, the United States has attempted to generate change in foreign countries by exporting liberal democratic institutions through military occupation and reconstruction. Despite these efforts, the record of U.S.-led reconstructions has been mixed, at best. For every West Germany or Japan, there is a Cuba, Haiti, Somalia, or Vietnam.

After War seeks to answer these critical foreign policy questions by bringing an economic mindset to a topic that has been traditionally tackled by historians, policymakers, and political scientists. Economics focuses on how incentives influence human action. Therefore, within an economic context, a successful reconstruction entails finding and establishing a set of incentives that makes citizens prefer a liberal democratic order. Coyne examines the mechanisms and institutions that contribute to the success of reconstruction programs by creating incentives for sustained cooperation.

Coyne emphasizes that the main threat to Western nations in the post-Cold War period will not come from a superpower, but rather from weak, failed, and conflict-torn states—and rogue groups within them. It is also critical to recognize that the dynamics at work—cultural, historical, and social—in these modern states are fundamentally different from those that the United States faced in the reconstructions of West Germany and Japan. As such, these historical cases of successful reconstruction are poor models for todays challenges. In Coynes view, policymakers and occupiers face an array of internal and external constraints in dealing with rogue states. These constraints are often greatest in the countries most in need of the political, economic, and social change. The irony is that these projects are least likely to succeed precisely where they are most needed.

Coyne offers two bold alternatives to reconstruction programs that could serve as catalysts for social change: principled non-intervention and unilateral free trade. Coyne points to major differences in these preferred approaches; whereas reconstruction projects involve a period of coerced military occupation, free trade-led reforms are voluntary. The book goes on to highlight the economic and cultural benefits of free trade.

While Coyne contends that a commitment to non-intervention and free trade may not lead to Western-style liberal democracies in conflict-torn countries, such a strategy could lay the groundwork for global peace.

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Editorial Reviews

From the Publisher
"Professor Coyne is obviously a dove rather than a hawk. But he accepts the case for occasional intervention for humanitarian reasons or to protect US citizens. His main suggestions are to avoid nation-building types of intervention and adopt free trade, if necessary unilaterally by the US. It is perhaps déformation professionelle for economists to overrate the spillover benefits of the latter. But peace and welfare may depend on how far the next US president accepts the main lines of his analysis—a subject even more important than the current credit crunch."—The Financial Times

"Having recently had an opportunity to read After War . . . I've found myself trying out his application of economic principles to the analysis of armed conflicts, particularly in the case of America's current occupation of Iraq. This has proven especially useful."—The Economist: Free Exchange

"I view the key analytical point as focusing on the power of on-the-ground expectations to make the reconstruction 'game' either a cooperative or combative one. This is a difficult variable to control, but Chris offers a very good look at the best and worst attempts that the United States has made to manipulate these variables and thus export democracy. If you want to know why the Solow model doesn't seem to hold for Bosnia, or a deeper more analytic sense of why Iraq has been a mess, this is the place to go."—Marginal Revolution

"A brilliant and timely contribution that should shift the debate on U.S. foreign policy and state-building. In providing new insights from economic theory on what can be expected in post-conflict situations, Coyne guides us toward attainable goals and interventions that have a better chance of success." —Jack Goldstone, George Mason University

"[Coyne] believes forceful attacks against dictatorial regimes generally damage democracy. The recent invasion of Iraq is a prime example, he says in his new book After War . . . Most of this engaging new volume from Stanford University Press examines the economics and politics of present-day foreign policy . . . Liberal democracy cannot be exported in a consistent manner at gunpoint' is Coyne's central conclusion."—Charleston Gazette

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Product Details

  • ISBN-13: 9780804754408
  • Publisher: Stanford University Press
  • Publication date: 11/7/2007
  • Pages: 248
  • Sales rank: 929,198
  • Product dimensions: 6.00 (w) x 9.00 (h) x 0.60 (d)

Meet the Author

Christopher J. Coyne is Assistant Professor, Department of Economics, West Virginia University, a Research Fellow at the Mercatus Center, and an Associate Editor for the Review of Austrian Economics. He has published articles in numerous scholarly journals, including Cato Journal, Constitutional Political Economy, Economic Journal, Journal of Economic Behavior and Organization, Kyklos, and Review of Political Economy.

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Table of Contents


1 Can Liberal Democracy Be exported at Gunpoint?....................1
2 from Conflict to Cooperation....................30
3 Why Can't they All Get Along?....................45
4 exporting Conflict....................79
5 the Pinnacle of U.S. Imperialism: Japan and West Germany....................118
6 fool's errands: Somalia and Haiti....................136
7 Post-9/11 Imperialism: Afghanistan and Iraq....................158
8 Liberal Means to Liberal ends....................173
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First Chapter


The Political Economy of Exporting Democracy
By Christopher J. Coyne

Stanford University Press

Copyright © 2008 Board of Trustees of the Leland Stanford Junior University
All right reserved.

ISBN: 978-0-8047-5440-8

Chapter One

Can Liberal Democracy Be exported at Gunpoint?

"We are led, by events and common sense, to one conclusion: the survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world." "[I]t is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world." -George W. Bush, Inaugural Address, January 20, 2005

ON FEBRUARY 15, 1898, the battleship USS Maine exploded and sank in the port of Havana, Cuba. This event occurred at the same time that support was increasing among Americans for military intervention in Cuba. Civil violence between Spanish occupiers and Cuban rebels seeking independence was ongoing within the Spanish colony, and public opinion in the United States concerning this situation was largely shaped by the spread of often exaggerated stories in the major newspapers detailing the inhumane treatment of Cubans by the Spanish. Debate continues to this day about the cause of the explosion on the USS Maine, but the papers at the time claimed it was an act of sabotage by the Spanish. In fact, with such headlines as "Remember the Maine!" serving as rallying cries for those in favor of intervention, U.S. public opinion supporting military action reached an all-time high.

With public opinion behind him, President William McKinley asked Congress on April 11, 1898 for the authority to send troops to Cuba to end the civil unrest. In addition to the reported inhumane treatment of Cubans, however, McKinley's greater, and unspoken, concern was the protection of American economic interests. Eight days later, Congress passed a joint resolution proclaiming Cuba to be "free and independent" and calling for a complete Spanish withdrawal. The resolution also authorized the president to use as much force as necessary in achieving this goal. The Teller Amendment to the resolution indicated that it was not the intentions of the United States to control Cuba and made clear that, once the U.S. military defeated the Spanish occupiers, Cubans would be granted their freedom. On April 25, Congress officially declared a state of war between the United States and Spain.

In a series of battles with the Spanish naval fleet, the United States quickly gained control of the waterways around Cuba, preventing Spanish ground troops from receiving additional supplies and support, and within a month, Cuba was securely under U.S. control. The signing of the Treaty of Paris in December 1898 marked the official end of the war. Per the terms of the treaty, Spain relinquished Puerto Rico and Guam to the United States while sovereignty of the Philippines was transferred to the United States for $20 million. In addition, Spain ceded its claim to Cuba, but as per the Teller Amendment, the United States did not assume permanent control.

Despite the fact that it never assumed official sovereignty over Cuba, however, the U.S. military continued its occupation through 1902, serving as the active government. During the occupation, the United States built infrastructure, including public sanitation, an education system, and a postal service. In 1900, a constitution was drafted and municipal elections were held. Under U.S. pressure, a series of amendments were attached to the constitution that simultaneously allowed the United States the ability to influence Cuban policy while disengaging from daily operations of the country in order to comply with the letter of the Teller Amendment if not its spirit.

One such amendment to the constitution, the Platt Amendment, provided the conditions for the withdrawal of U.S. troops from Cuba. The amendment also granted the United States control of Guantánamo Bay, a naval base, which somewhat infamously, or perhaps notoriously, it continues to utilize to this day. It also restricted Cuba from transferring land to any nation other than the United States. Finally, the amendment provided rules regarding Cuba's ability to float foreign debt and enter into treaties with non-U.S. countries. Perhaps most important, the Platt Amendment specified that the United States could intervene in Cuban affairs whenever the U.S. government deemed it appropriate. With the adoption of the constitution, U.S. troops were withdrawn in 1902, and Tomás Estrada Palma, a strong supporter of the initial U.S. intervention and of U.S. policy regarding Cuba in general, became Cuba's first president on May 20 of that year.

The American occupation of Cuba was important for several reasons. As highlighted above, it was the catalyst for Cuba's independence from Spain, but more important from a U.S. foreign policy perspective, the occupation marked one of the first U.S. attempts to shape political, economic, and social outcomes via military intervention and occupation. The experience in Cuba marked the beginning of a trend of intervention and occupation that has continued into the twenty-first century with the occupation of Iraq and Afghanistan.

The United States would utilize the stipulations of the Platt Amendment twice more over the twenty-year period following the initial occupation. In 1906, the United States again occupied Cuba to surpress civil insurgency. President Estrada Palma's reelection was met with violent opposition from the Liberals (the National Liberals and the Republic Liberals), and the U.S. occupation, which lasted until 1909, focused on restoring order and establishing a new democratic government in the wake of Estrada Palma's eventual resignation. Yet another U.S. occupation of Cuba occurred from 1917 to 1922 due to an uprising inspired by the Russian Revolution. The U.S. military was charged with ending the uprising and protecting U.S. property and interests.

If the goal of this series of U.S. occupations in Cuba was to plant the seeds of a sustaining liberal democratic government that would ultimately become a long-term ally of the United States, one must obviously consider it a failure. Since the end of the last U.S. occupation in 1922, Cuba has had several short-lived governments followed by the emergence of two oppressive dictatorships, those of Fulgencio Batista (1940-1959) and Fidel Castro (1959-present).

Over two decades after the United States exited Cuba for the final time, at the conclusion of World War II, the United States engaged in the most ambitious effort in its history of democratizing war-torn countries with the occupation and reconstruction of West Germany and Japan. In both cases, the outcome was drastically different than that in Cuba. In both West Germany and Japan, military occupiers were able to successfully transform war-torn countries into liberal democracies that have survived to this day.

In May of 1945, Germany surrendered unconditionally to the Allied forces. Leaders from the Allied countries had gathered in a series of conferences both before and after Germany's surrender to determine a common occupation policy. The main tenets of this policy were that Germany would be partitioned and each Allied power would control a zone, Nazism would be abolished, the country would be democratized, war criminals would be punished, and reparations would be paid. The United States would carry out the reconstruction of its Western zone from 1945-1955.

The physical infrastructure, economy, and morale of the German people had been devastated by the war. During the occupation of its zone, the United States disbanded the government and assumed control of the provision of public goods at the municipal and local level and managed administrative and budgetary functions. Despite the destruction of the country, economic recovery occurred relatively quickly. Although there were many economic ups and downs, annual economic indicators showed double-digit growth in the GDP of West Germany from 1947 to 1952. Historians and policymakers continue to debate the factors that contributed to this recovery. Some attribute it to the aid delivered under the Marshall Plan, and others emphasize the currency and fiscal reforms of Ludwig Erhard as the catalyst of the recovery. Whatever one concludes on this issue, few would disagree that the reconstruction effort was able to transform West Germany into a liberal democracy. This is not to indicate that the reconstruction process did not suffer any setbacks. The process was far from smooth, both within each zone and also across zones. Progress occurred at different rates and on different margins, but overall, if the standard against which the reconstruction of West Germany is judged is the sustainability of the reconstructed orders, it must be deemed a success.

Although the specifics of the U.S. experience in Japan were clearly different, the outcome was very similar to that of West Germany. Following the use of nuclear bombs on Hiroshima and Nagasaki, Japanese officials surrendered unconditionally in September 1945. As with Germany, Japan's infrastructure, economy, and morale had been severely damaged during the war. The terms of Japan's surrender had been determined by the United States, the United Kingdom, and China at the Potsdam Conference in July of 1945. In addition to unconditional surrender, the Potsdam Declaration required the purging of certain government officials, as well as the democratization of Japan; military disarmament; and the establishment of freedom of thought, speech, and religion.

Despite the fact that several countries agreed to the terms of surrender at Potsdam, the Supreme Commander for the Allied Powers, U.S. General Douglas MacArthur, directed the occupation unilaterally. He decided basic policies and utilized his position of power to implement them. The unilateral power of the United States in Japan during this period is evidenced by the fact that no other Allied nation challenged U.S. authority during the reconstruction process. MacArthur orchestrated sweeping and drastic changes throughout Japanese society, including within the government and civil administration, the economy, civil society, the education system, and the military. In the process, MacArthur achieved icon-like status among the Japanese populace. A new constitution was drafted over a relatively short period of time and went into effect in May 1947. According to the guidelines of the constitution, the emperor lost all military and political power and became a figurehead of the state. As with Germany, there were many bumps in the road, but most observers would agree that occupiers had established a sustainable liberal democracy by the time they exited Japan in April 1952.

The successful cases of Japan and West Germany have lasting importance. Not only do they exist in contrast to the failures in Cuba, these cases laid the groundwork for the perception that the United States had the ability to successfully export liberal democracy at gunpoint. Indeed, the United States undertook several subsequent efforts to export liberal democracy during the Cold War, including to Vietnam, Cambodia, and the Dominican Republic. Although these attempts largely failed, efforts to establish liberal democracy abroad continue to this day.

In October 2001, the United States began military operations in Afghanistan in response to the September 11, 2001, attacks on the World Trade Center and the Pentagon. The aim of the operation was to eliminate the Taliban government and the al-Qaeda organization. Military operations were swift and effective. With the assistance of the Northern Alliance, the United States gained control of Kabul, the capital city of Afghanistan. In December 2001, representatives from the United States and the Northern Alliance as well as expatriate Afghan leaders met in Bonn, Germany. The result of the conference, the Bonn Agreement, outlined a roadmap and timetable for bringing peace, stability, and democracy to Afghanistan. In January 2004, Afghanistan's constitutional Loya Jirga approved a new constitution.

In March 2003, while U.S. forces were still attempting to reconstruct Afghanistan along the guidelines put forth in the Bonn Agreement, the United States began a military operation in Iraq. The specific aim of the operation was to overthrow the regime of Saddam Hussein and replace it with a liberal democracy. The hope was, or seemed to be, that establishing democracy in Iraq would have positive spillover effects for the rest of the Middle East. The 2003 operation, much like the earlier U.S. military operation in Iraq in January 1991, went smoothly and met little resistance. The United States, with superior military technology and leadership, was able to topple the comparatively poorly trained and ill-equipped Iraqi army quickly. The result was the collapse of the Hussein regime. President Bush publicly declared on April 16, 2003, that Iraq had been "liberated."

As of this writing, the situations in Afghanistan and Iraq continue to unfold. It is too early to determine with certainty whether these reconstructions will achieve their desired end of creating sustaining liberal democracies. However, while the initial military operations in both countries were successful, the aftermath has been a different story. In both cases, the existing governing regimes were easily toppled, but subsequent reconstruction efforts have been met with strong resistance. Dispersed pockets of insurgents located throughout each country characterize the nature of the resistance-there is no longer a central enemy that can be confronted head-on. Moreover, costs-both monetary and human-have substantially exceeded initial predictions. Further, public opinion in the United States seems to be turning against prolonging the occupations, and support is increasing for withdrawal sooner rather than later. It may take several years, or even decades, before the outcomes of these efforts can be judged as successes or failures, but at least in the short term the likelihood of success is not looking good compared to what happened after World War II in West Germany and Japan.

These brief narratives are not meant to do justice to the complexities of the cases discussed. Instead, the purpose is to highlight the long and varied history of U.S. attempts to utilize military forces to occupy and reconstruct countries along liberal democratic lines. It is interesting to note that early failures in Cuba did not prevent the United States from further military intervention before and after World War II, and certainly West Germany and Japan are clear cases of successful reconstruction. However, the failure of a series of reconstruction efforts between the 1960s and the 1990s, coupled with the current difficulties in Afghanistan and Iraq, seems to call America's ability to export liberal democracy via military occupation into question.

Given the ongoing struggle in both Afghanistan and Iraq and the growing discontent among the U.S. electorate, we should expect the issues associated with reconstruction to remain at center stage for the foreseeable future. In August 2004, a new office-the Office of the Coordinator for Reconstruction and Stabilization-was created within the State Department to oversee U.S.-led reconstruction efforts. If the present paradigm is maintained in spite of the widely publicized logistical issues and changing public sentiment, we can safely assume that U.S. involvement in such efforts will only increase.

The effort to win the "war on terror" has been a driving force behind the emphasis on spreading democracy via military occupation. In this context, the underlying logic is that the spread of democracy will greatly reduce, if not eradicate, the terrorist threat. It is widely recognized that the major threat to the United States is no longer a few powerful countries, as during the Cold War, but instead the threat posed by countries lacking a strong and effective central government. Reconstruction efforts attempt to remedy this situation by establishing the foundations of sustaining liberal democratic institutions.

Moreover, there is also an increasing call in the academic literature for the United States to embrace its role as an empire. A key advocate of this position, Niall Ferguson, contends that America should utilize its relative position of power in the world to impose liberal political and economic institutions in weak and failed states. These efforts, Ferguson contends, should not be constrained by the "light footprint" approach to occupation, but instead should establish colonial administrations, when necessary, to achieve the desired ends. I will return to this "brute force" theory later, but for now, the key point is that there is good reason to believe that U.S. involvement in reconstruction efforts will continue beyond Afghanistan and Iraq.


Excerpted from AFTER WAR by Christopher J. Coyne Copyright © 2008 by Board of Trustees of the Leland Stanford Junior University. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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