A new paper suggests U.S. military aid does nothing to reduce drug production in Colombia.

The search for better economic policy.
Feb. 3 2010 9:45 AM

We're Blowing It

A new paper suggests U.S. military aid does nothing to reduce drug production in Colombia.

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To see how all this actually plays out in the Colombian countryside, economists Oeindrila Dube and Suresh Naidu analyze how conflict and coca production were affected by the level of U.S. military aid during the years 1988-2005. They compare regions with Army bases (i.e. areas that receive U.S. military assistance) to regions without bases (i.e. areas that are relatively unaffected by U.S. aid). If, for example, coca cultivation plummets in regions receiving U.S. military assistance, but not in nonbase regions, then we can be reasonably sure that the change is due to military aid and not something else (like good weather for growing coca). To make sure that they're measuring the impact of U.S. aid on conflict and drug production (not the impact of conflict and drug production on U.S. aid), the economists focus on changes in aid to Colombia that go hand-in-hand with changes in U.S. military aid to the rest of the world, thus reflecting broader American foreign policy objectives rather than reactions to Colombia-specific events.

Dube and Naidu's analysis provides a dark view of U.S. involvement in Colombia and suggests that the $5 billion we've sent to the country in the past couple of decades hasn't exactly been well-spent. When U.S. aid to Colombia increases, so do paramilitary attacks in areas with Army bases—but not in regions without bases, where the number of guerrilla attacks stays the same. Despite the explicit focus of aid on reducing drug production, the researchers found an actual decline in anti-narcotics operations by the Colombian military in response to greater U.S. aid, with coca production continuing unchanged. There's also some evidence that U.S. dollars may have been channeled to paramilitaries to intimidate voters and keep its government allies in power. Greater U.S. aid is associated with a decline in voter turnout, concentrated in municipalities with Army bases. (A related study finds that paramilitary presence leads to the election of legislators sympathetic to their cause.)

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There may be nothing wrong with using American money to pursue American interests, but we should make sure that that's indeed what our aid dollars are doing. Which brings us back to Haiti. The country is getting a much-needed infusion of relief funds, but as some have noted, when the camera crews pack up and move on, public attention will likely wane. Haiti will then face the complicated task of building the institutions—absent even before the earthquake hit—that might allow it to develop a functional economy. Economist Paul Collier has argued that a military presence can be critical to maintain the peace and stability that's required for investment and rebuilding to take place in nations torn apart by war and other turmoil. Haiti, with its legacy of weak, ineffective government, makes it a particularly promising candidate for such assistance. Even before the earthquake, Haiti was the beneficiary of outside intervention, with thousands of Brazilian peace-keepers stationed there. Haiti would surely benefit if these forces were augmented by a longer-term U.S. presence. Given the budget crunch in Washington, however, it seems unlikely that there will be extra foreign aid funds available. A dollar more of aid for Colombia is likely one less dollar available for keeping the peace in places like Haiti.

Ray Fisman is a professor of economics at the Columbia Business School and co-author of The Org: The Underlying Logic of the Office. Follow him on Twitter.

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