Does the Pentagon's Checkbook Diplomacy Actually Work? - Defense One - 0 views
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As we discuss in a new report with the Cato Institute, “‘Money as a Weapons System’: The Promises and Pitfalls of Foreign Defense Contracting,” much of the U.S. government’s procurement spending, in fact, takes place overseas, with contracts being awarded to foreign firms
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contracts go to secure military access, promote local economic development, and even wage counterinsurgency campaigns
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Providing jobs is a good way to curry favor with local populations in places where the United States wants to maintain a military presence. Other foreign policy tools may not reach the right people. The well-known risk with foreign aid, for example, is that recipient regimes will divert it for their own purposes instead of investing in public goods. Contracting directly with local firms might help bypass corrupt governments. Subscribe Receive daily email updates: Subscribe to the Defense One daily. Be the first to receive updates. But there is a big problem with this seemingly sound logic: to date, there is no evidence that it works as promised.
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By some estimates, ten percent of defense-related logistics contracts ended up in the hands of insurgents
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The law limits the government’s ability to dictate the hiring of firms it does business with. This caused problems in Djibouti, where the United States has its only base in Africa, Camp Lemonnier. In 2013, the American company in charge of base support fired local Djiboutian employees in search of cheaper labor, despite a diplomatic understanding between the United States and Djibouti that the base would provide jobs for Djiboutians. Between the fallout and threat of hosting a Russian base, the Djiboutian government managed to hike Washington’s annual base rent from $30 million to $63 million.
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Congress could make preferential procurement authorities conditional upon independently conducted studies of this spending’s effectiveness
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First, we need to be able to answer questions such as: who is getting the business and how many jobs are created? That will enable systematic study of questions such as: what are the downstream effects on local markets? Do local jobs actually buy local goodwill?