Counter-terror Aid: Creating Perverse Incentives

Counter-terror Aid: Creating Perverse Incentives

"To write a check to countries that are clearly not representing American interests is nonsensical. (GOP Debate 11/22/11)

A decade after the 2001 terrorist attacks, policy makers continue to grapple with the problem of effective counter-terrorism measures. As part of this fight, the United States has provided billions to foreign governments.

Counter-terror Aid: Creating Perverse Incentives

"Wherever there is a threat to Pakistan, we will use it [US aid] there. If the threat comes from al-Qaeda or Taliban, it will be used there. If the threat comes from India, we will most surely use it there (BBC)

If counter-terror aid is linked to the presence of terrorist organizations, then this creates the potential for perverse incentives, rewarding host states for pursuing goals contrary to target state interests.

- Approximately 21 billion USD in military and civil aid - $14.1 billion security related (CRS) - Up to 70% misspent (Guardian) - Fewer than 20% of Pakistanis hold a favorable view of the US (Pew)

- National security and strategic depth in Afghanistan: ISI support to the Taliban - Kashmir and conflict with India: with the possible exception of Iran, Pakistan is probably todays most active sponsor of terrorism. (Byman, 155) - Sustain Musharrafs presidency: Musharraf needed to show that Pakistan was benefiting from his decision a strong hint that Pakistan needed immediate economic relief and an end to sanctions. (Rashid, 81)

- When divergent national interests create asymmetry, foreign aid may provide a perverse incentive for host states to maintain ties to terrorist organizations - Implications? - Diplomacy complementing defense (increase State Department budgets) - Strategic investments that link aid to alternative milestones of performance rather than exclusively to US security interests - Mitigate monopoly on regional significance - Obama Administration on Pakistan: - Tripling non-military aid (7.5b USD over five years) - Tie military aid to fighting militants (accountability?) - Pakistani sovereignty (drone strikes and bin Laden)

- Questions?

- Direct Overt U.S. Aid and Military Reimbursements to Pakistan, FY2002-FY2011, U.S. Department of State. - Up to 70% of US aid to Pakistan misspent, Guardian. - Musharraf admits US aid diverted, BBC News. - Reassessing Foreign Assistance in Pakistan, Center for American Progress. - Rashid, Ahmed, Descent into Chaos: The United States and the Failure of Nation Building in Pakistan, Afghanistan, and Central Asia, New York: Viking, 2008. - Byman, Daniel, Deadly Connections: States that Sponsor Terrorism, Cambridge: Cambridge UP, 2005.