Fixing Failed States – Ashraf Ghani & Clare Lockhart

Fixing Failed States – Ashraf Ghani & Clare Lockhart

I’m not sure why I bought this book, I think it came from a conversation with my wife, but it was the first book I have failed to complete in a very long time. I just could not maintain an interest in it. With all due respects for the authors, it was just too dull, dry and eventually ineffective for me.

What the book has to say can be summed up simply: The United Nations and its aid agencies are a disaster. They always have been and they always will be. They are so thoroughly corrupted and self-serving that they consistently do more harm than good. Their regular pattern of failure generates resentment and frustration and the value they bring is mostly to themselves. To their credit, the authors provide numerous examples to back this up. For that, the book should really be titled “How to Break Failed States” as there is little practical in the “Fixing” path of the book. What there is that might be called “fixing” is so generic and high-level as to be worthless. While they clearly show that the United Nations causes more harm than good, they fail in any way to address how to correct that part of the problem. That really is my real complaint about the book – while it gives some really great background on the problem and wonderful examples, the solutions offered are too generic to be practical. In particular, they offer nothing in the way of “fixes” for the failed United Nations.

Here’s how it works: Take a problem, such as the Indonesian tsunami some years back. The world rushes in with tons of financial donations that are provided to the United Nations for a relief project. The United Nations now establishes an agency to oversee the “project”. They drain 20% of the funds off to hire managers and bureaucrats to manage the “project”. They spend money to establish efficient travel between headquarters and the remote locations and to purchase nice shiny new vehicles for their staff. Since all they do is manage this “project”, they have to find some outside agency or organization or company, or combination there of to actually plan and execute the project. These folks then absorb another 20% or so of the funds while they hire their own staff, set up their own headquarters etc. These folks then have to make contact with folks at the local level who will actually do the work. These folks consume another 20% or so of the funds. So, at this time we have spent 20% on the oversight of the project, 20% on the planning of the project and 20% on the execution of the project. All along this route, the persons, “Technical Experts” are provided excellent salaries ($550 million in the case of the Oil for Food program as an example), very nice accommodations, excellent state-of-the-art communications facilities, their own airline and hotels.  Then these local folks have to deal with the local governmental bodies who are usually as corrupt as they come and they generally steal most of the remaining funds. Is it any wonder that of every $1.00 donated, that less that $0.10 actually reaches the target consumer? If you think this is a bad fantasy – read the book (did I really say that?) as it provides enough examples to convince any reasonable person.

The authors do not address the only known really successful program that avoids these issues – the “Micro-Loan” concept that gets small donations directly into the hands of local entrepreneurs and has been an enormous success. Neglecting to mention this draws a big condemnation from me….this is a solution that actually works and I have personal experience to back this up. Want proof – visit www.kiva.org.

There is a particular example related to Haiti that I can confirm from my other readings as correct. I know more than a smidgen about Haiti and I can tell you that this is an accurate depiction of the real world. Other particularly relevant examples are from Afghanistan and Kosovo.

So…The United Nations sucks….and this is news? They have an entire army of “Technical Experts” that they hire and who move from one project to another, making enormous salaries. One thing they do not have are auditors…..no United Nations project has ever gotten a decent audit with the exception of the “Oil For Food” program which the Bush Administration insisted the GAO audit and which found to be corrupted from the bottom, all the way to the top, including the offices of the Secretary-General Kofi Annan.

Something pointed out by Lee Kuan Yew, one of Singapore’s leaders, and a great example of a good government:

“We cannot afford to forget that public order, personal security, economic and social progress, and prosperity are not the natural order of things; that they depend on ceaseless effort and attention from an honest and effective government that the people must elect.”

An interesting statistic: “In 2005 Sweden collected 50.6% of its GDP in taxes. The EU average was 40.5%, while the U.S. proportion collected was 25.6% ($2.4 trillion in 2006). Income tax collected from individuals in the United States alone has increased from $45.6 billion in 1962 to 3 trillion in 2006. This increase in revenue underpins a concomitant rise in expenditures, with the state emerging as the primary employer. For example, as a proportion of total employment, public sector employment in the United Kingdom was 20.4% in June 2005.”…..That means 1 in 5 persons in the United Kingdom is on the public payroll, which begs the question, who the hell is actually working to pay their salaries? and benefits?

Here’s an outdated chart of public sector employment from the International Labor Organization. It’s nearly 10 years old, so the situation has only gotten worse…

Love those socialist countries in Europe……

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