Thursday, October 21, 2010

Foreign assistance and opportunity cost

Nicholas Kristof's column in the New York Times today discusses the importance of supporting education in Afghanistan, and notes that the Taliban rarely, if ever, attack schools that have the support of the locals and (especially) of local religious leaders.

Given the unquestioned importance of making education accessible to everyone growing up in Afghanistan, boys and girls equally, and given the Taliban's notoriously sexist predilections, the evidence Kristof provides is striking and crucial to include in policy deliberations going forward.

Meanwhile, the most important insight in Kristof's column is a different one, in my opinion. He points out that it costs about $1 million per year to send a U.S. soldier to Afghanistan. Meanwhile, Greg Mortenson, author of Three Cups of Tea and the driving force behind one of the organizations that has been building schools even in Taliban-controlled areas, notes that all higher education in Afghanistan could be funded for $243 million/year.

Mr. Mortenson suggests, therefore, "that America hold a press conference here in Kabul and put just 243 of our 100,000 soldiers on planes home. Then the U.S. could take the savings and hand over a check to pay for Afghanistan’s universities. "

Such a symbolic step would be significant. But there is a deeper lesson here. We do not have troops in Afghanistan just because we think it is a good idea to have troops there; those troops are there to serve a specific purpose. Yet whenever the issue of sending additional troops to Afghanistan is debated, whether by policy makers or in the media, the most salient question tends to be:

• Will these X additional soldiers allow us to achieve our goals in Afghanistan (or, in a less demanding version, to come closer to achieving those goals than we have so far)?

Meanwhile, the correct question to ask is:

• If we are willing to spend an additional $X million on achieving our goals in Afghanistan, is it the best use of that money to spend it on X soldiers?

In addition, from a budget point of view, there is of course an important prior question:

• If we are willing, as a government (or a nation), to spend an additional $X million, is Afghanistan the policy issue where that money is best spent?

Policy-making is about opportunity cost: a given dollar in the budget can only be spent once. Deciding to spend it on one thing means you cannot spend it on something else. This fundamental point gets overlooked far too often in general, but especially when the discussion involves troops. To a government, a soldier is not just a soldier; he or she is also a budget expense. And a soldier in Afghanistan is a pretty large budget expense at that.

As numerous analysts have complained, it is far too easy for outsiders to ignore the human cost of the U.S. troop presence in Afghanistan (and that human cost is very high, for soldiers and their families, for the U.S. as a nation, and also for the people of Afghanistan). Oddly enough, it also turns out to be too easy to ignore the financial cost of that presence.

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