Hostname: page-component-7c8c6479df-p566r Total loading time: 0 Render date: 2024-03-28T07:58:04.027Z Has data issue: false hasContentIssue false

The problem of credible commitment in reconstruction*

Published online by Cambridge University Press:  01 April 2009

CHRISTOPHER J. COYNE*
Affiliation:
Department of Economics, West Virginia University, USA
PETER J. BOETTKE*
Affiliation:
Department of Economics, George Mason University, Fairfax, VA, USA

Abstract

Reconstruction involves military occupation with the aim of rebuilding and reforming both formal and informal institutions along liberal democratic lines. We contend that successful reconstructions require mechanisms that make reforms credible over the long run. In the absence of a signal of sustained credible commitment, institutional reforms will not be trusted by the populace resulting in the failure of the broader reconstruction. The incentive and epistemic aspects of the credible commitment problem are analyzed. We also consider potential solutions to the problem of credible commitment. Absent such solutions, attempts to ‘export’ institutions via military occupation will fail or produce dysfunctional outcomes. An analysis of the numerous aspects of the credibility problem in the current reconstruction of Iraq is provided to illuminate the central arguments.

Type
Research Article
Copyright
Copyright © The JOIE Foundation 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. and Johnson, S. (2005), ‘Unbundling Institutions’, Journal of Political Economy, 115: 949995.CrossRefGoogle Scholar
Acemoglu, D. and Robinson, J. A. (2006), Economic Origins of Dictatorship and Democracy, Cambridge: Cambridge University Press.Google Scholar
Acemoglu, D., Johnson, S., and Robinson, J. (2001), ‘The Colonial Origins of Comparative Development: An Empirical Investigation’, American Economic Review, 91: 13691401.CrossRefGoogle Scholar
Acemoglu, D., Johnson, S., and Robinson, J. (2002), ‘Reversal of Fortunes: Geography and Institutions in the Making of the Modern World Income Distribution’, Quarterly Journal of Economics, 117: 12311294.CrossRefGoogle Scholar
Allen, V. (2004), ‘Negroponte Says Won't Command Iraqi Government’, Reuters, 27 April.Google Scholar
Anderson, L. and Stansfield, G. (2004), The Future of Iraq: Dictatorship, Democracy or Division?, New York: Palgrave McMillian.Google Scholar
Aoki, M. (2001), Toward a Comparative Institutional Analysis, Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Aoki, M. (2007), ‘Endogenizing Institutions and Institutional Changes’, Journal of Institutional Economics, 3 (1): 131.CrossRefGoogle Scholar
Axelrod, R. (1984), The Evolution of Cooperation, New York: Basic Books.Google Scholar
Baker, J. A. and Hamilton, L. H. (2006), The Iraq Study Group Report, New York: Vintage Books.CrossRefGoogle Scholar
Boettke, P. J. (1993), Why Perestroika Failed: The Politics and Economics of Socialist Transformation, New York: Routledge.CrossRefGoogle Scholar
Boettke, P. J. (2001), ‘Credibility, Commitment, and Society Economic Reform’, in Boettke, P. J. (ed.), Calculation and Coordination, New York: Routledge, pp. 154175.Google Scholar
Boettke, P. J., Coyne, C. J., and Leeson, P. T. (forthcoming), ‘Institutional Stickiness and the New Development Economics’, American Journal of Economics and Sociology.Google Scholar
Bumiller, E. (2004), ‘Bush lays out goals for Iraq: self-rule and stability’, New York Times, 25 May, A1.Google Scholar
Cowen, T. and Coyne, C. J. (2005), ‘Postwar Reconstruction: Some Insights from Public Choice and Institutional Economics’, Constitutional Political Economy, 16: 3148.CrossRefGoogle Scholar
Coyne, C. J. (2006), ‘Reconstructing Weak and Failed States: Foreign Intervention and the Nirvana Fallacy’, Foreign Policy Analysis, 2: 343361.CrossRefGoogle Scholar
Coyne, C. J. (2008a), After War: The Political Economy of Exporting Democracy, Stanford, CA: Stanford University Press.Google Scholar
Coyne, C. J. (2008b), ‘The Politics of Bureaucracy and the Failure of Reconstruction’, Public Choice, 135 (1–2): 1122.CrossRefGoogle Scholar
Crocker, B. (2004), ‘Reconstructing Iraq's Economy’, The Washington Quarterly, 27 (4): 7393.CrossRefGoogle Scholar
Diamond, L. (2004), ‘What Went Wrong in Iraq?’, Foreign Affairs, 83 (5): 3456.CrossRefGoogle Scholar
Dixit, A. and Nalebuff, B. (1991), Thinking Strategically, New York: Norton.Google Scholar
Fearon, J. D. (2007), ‘Iraq's Civil War’, Foreign Affairs, 86 (2): 215.Google Scholar
Ferejohn, J. (1991), ‘Rationality and Interpretation: Parliamentary Elections in Early Stuart England’, in Monroe, K. (ed.), The Economic Approach to Politics, New York: Harper Collins, pp. 279305.Google Scholar
Flores, T. E. and Nooruddin, I. (2007), ‘Democracy Under the Gun: Understanding Post-Conflict Economic Recovery’, mimeo, Department of Political Science, University of Michigan and Ohio State University.CrossRefGoogle Scholar
Foote, C., Block, W., Crane, K., and Gray, S. (2004), ‘Economic Policy and Prospects in Iraq’, Journal of Economic Perspectives, 18 (3): 4770.CrossRefGoogle Scholar
Fukuyama, F. (2004), State-Building: Governance and World Order in the 21st Century, Ithaca: Cornell University Press.Google Scholar
Fukuyama, F. (ed.) (2005), Nation-Building: Beyond Afghanistan and Iraq, Maryland: The Johns Hopkins University Press.Google Scholar
Gehlbach, S. and Keefer, P. (2008), ‘Investment Without Democracy: Ruling-Party Institutionalization and Credible Commitment in Autocracies’, mimeo, Department of Political Science, University of Wisconsin, Madison.CrossRefGoogle Scholar
Hartzell, C. and Hoodie, M. (2007), Crafting Peace: Power Sharing and the Negotiated Settlement of Civil Wars, Pennsylvania: Penn State University.Google Scholar
Keefer, P. (2007), ‘Insurgency and Credible Commitment in Autocracies and Democracies’, World Bank Policy Research Working Paper 4185.CrossRefGoogle Scholar
Keefer, P. and Vlaicu, R. (2005), ‘Democracy, Credibility and Clientelism’, World Bank Policy Research Working Paper 3472.CrossRefGoogle Scholar
King, N. Jr. (2003), ‘Bush Officials Devise a Broad Plan For Free-Market Economy in Iraq’, The Wall Street Journal, 1 May, A1.Google Scholar
Klein, D. (1990), ‘The Macroeconomic Foundations of Rules versus Discretion’, Constitutional Political Economy, 1 (3): 119.CrossRefGoogle Scholar
Kofford, K. J. (2003), ‘Iraq and public choice’, Eastern Economic Journal, 29 (4): 619621.Google Scholar
Kurrild-Klitgaard, P. (2004), ‘Blood, Baath and Beyond: the Constitutional Dilemma of Iraq’, Public Choice, 119 (1–2): 1330.CrossRefGoogle Scholar
Kydd, A. and Walter, B. F. (2002), ‘Sabotaging the Peace: The Politics of Extremist Violence’, International Organization, 56 (2): 263296.CrossRefGoogle Scholar
Kydland, F. E. and Prescott, E. (1977), ‘Rules Rather than Discretion: The Inconsistency of Optimal Plans’, Journal of Political Economy, 85 (3): 473491.CrossRefGoogle Scholar
Looney, R. (2004), ‘The Viability of Economic Shock Therapy in Iraq’, Challenge, 47 (5): 86103.CrossRefGoogle Scholar
Myerson, R. B. (2007), ‘Foundations of the State in Theory and Practice: Reading Bremer and the Counterinsurgency Field Manual’, mimeo, Department of Economics, University of Chicago.Google Scholar
Nooruddin, I. and Flores, T. E. (2008), ‘Financing the Peace: Evaluating World Bank Post Conflict Assistance Programs’, mimeo, Department of Political Science, The Ohio State University and University of Michigan.Google Scholar
North, D. C. (1990), Institutions, Institutional Change, and Economic Performance, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
North, D. C. (1993), ‘Institutions and Credible Commitment’, Journal of Institutional and Theoretical Economics, 149 (1): 1123.Google Scholar
North, D. C. (2005), Understanding the Process of Economic Change, Princeton: Princeton University Press.CrossRefGoogle Scholar
Payne, J. L. (2006), ‘Does Nation Building Work?’, The Independent Review, 10 (4): 599610.Google Scholar
Peceny, M. (1999), Democracy at the Point of Bayonets, University Park: The Penn State University Press.Google Scholar
Persson, T. and Tabelline, G. (2000), Political Economics: Explaining Public Policy, Cambridge, MA: MIT Press.Google Scholar
Rodrik, D., Subramanian, A. and Trebbi, F. (2004), ‘Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development’, Journal of Economic Growth, 9: 131165.CrossRefGoogle Scholar
Roeder, P. and Rothchild, D. (eds) (2005), Sustainable Peace: Power and Democracy after Civil Wars, Ithaca: Cornell University Press.Google Scholar
Sanger, D. E. (2003), ‘America's Gamble: A Quick exit Plan for Iraq’, New York Times, 16 November, A17.Google Scholar
Schelling, T. (1960), The Strategy of Conflict, Cambridge, MA: Harvard University Press.Google Scholar
Stiglitz, J. and Bilmes, L (2008), The Three Trillion Dollar War: The True Cost of the Iraq Conflict, New York: W. W. Norton.Google Scholar
Tullock, G. (1985), ‘Adam Smith and the Prisoner's Dilemma’, The Quarterly Journal of Economics, 100: 10731081.CrossRefGoogle Scholar
Tyler, P. E. (2003), ‘Three Wars over Iraq: Staying the Course May Be the Hardest Battle’, New York Times, 5 October, Section 4, Column 1, Week in Review Desk, p. 1.Google Scholar
Weingast, B. R. (1997), ‘The Political Foundations of Democracy and the Rule of Law’, American Political Science Review, 91: 245263.CrossRefGoogle Scholar
Weisman, S. R. (2004), ‘The Struggle for Iraq: Politics; White House Says Iraq Sovereignty Could be Limited’, New York Times, 23 April, A1.Google Scholar
White, J. and Weisman, J. (2004), ‘Limited Iraqi Sovereignty Planned’, Washington Post, 22 April, A25.Google Scholar
World Bank (2006), ‘Rebuilding Iraq: Economic Transition and Reform’, February. Available at: http://siteresources.worldbank.org/IRFFI/Resources/IraqCEM-finalComplete.pdf.Google Scholar