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Enabling Reckless Allies

Leon Hadar has a good column applying some of the lessons of the financial crisis to an analysis of flaws in U.S. foreign policy: Indeed, while Americans have been considering the moral hazard of their government bailing-out the American International Group (AIG) and other irresponsible risk-takers in Wall Street, they could also have pondered the […]

Leon Hadar has a good column applying some of the lessons of the financial crisis to an analysis of flaws in U.S. foreign policy:

Indeed, while Americans have been considering the moral hazard of their government bailing-out the American International Group (AIG) and other irresponsible risk-takers in Wall Street, they could also have pondered the way American global intervention in support for foreign governments and groups tends to encourage them to engage in risky behavior — Georgia provoking a conflict with Russia; Pakistan supporting radical Islamists; Israel building-up settlements in the West Bank — whose costs end-up being paid by American soldiers and taxpayers, and could therefore be considered a case of moral hazard.

Dr. Hadar is right to stress the problem that U.S. backing enables other states to pursue foolish, counterproductive or ruinous policies that they might be less willing or able to pursue otherwise, but I think he is not entirely correct when he says that Americans bear the costs of risky allied behavior, or at least he characterizes those costs in the wrong way. It is absolutely true that irresponsible advocacy for Georgian admission into NATO and the promise given in Bucharest last year to Georgia that it would one day join NATO encouraged Saakashvili in his reckless path and contributed greatly to the tensions that led to the August war between Russia and Georgia. However, what Georgia discovered last year was that all of the official Western talk of support for Georgia was just talk, because neither Washington nor any European government would want to go to war with Russia for the sake of Georgia. When faced with actual conflict with Russia and the huge dangers and costs involved, Washington was not really willing to bail Georgia out. Georgia was, if you like, small enough to fail, or at least small enough to be left to its chosen fate. So the price Americans paid is a somewhat different one. We badly damaged relations with Russia by maintaining the illusion of support for Georgia without any desire to intervene directly, which proved how meaningless the Georgian alliance had always been to our government. The war last year showed that NATO did not really have any vital security interests in Georgia and reminded everyone why Georgian membership made no sense.

Our government enables bad behavior by our allies by refusing to pull the plug on military, financial and political support and defending virtually every allied act no matter how dangerous or destructive, which puts Washington in a bind of being ultimately responsible for policies that it cannot really control. Americans were already paying the price of the aid being sent to these allies, which allied actions do not affect one way or the other, but on top of that we assume the diplomatic and political costs of damaging relationships with other states that Washington feels obliged to ruin to maintain the appearance and sometimes the reality of steadfast support.

The case of Georgia is particularly instructive for how foolish this can be. Georgia suffered because Washington allowed its government to believe that implicit Western guarantees existed for Georgian security, and Washington then revealed at the last possible minute that those guarantees did not exist. Instead of a bailout, which would have been catastrophic for all involved and could have conceivably spiraled out of control into a major international war, Georgia was forced to take the losses from its high-risk gamble. Obviously, had Washington not encouraged the Georgian government in all its worst instincts and provided Saakashvili with unflinching support, the escalation of the conflict might not have occurred, but had it persisted in its reckless enabling of that ally far worse things would have resulted.

Instead of internationalizing a small, fairly insignificant regional conflict, which would have been the foreign policy equivalent of socializing risk, Washington stepped back from the brink and allowed the relevant actors to suffer the consequences of their decisions. That doesn’t necessarily mean that Saakashvili has learned anything, but Georgia suffered enough economically and politically that he will not be able to engage in the same reckless behavior as before. It is when allied actions have no consequences, as they seem not to with Pakistan and Israel, that you get deeply dysfunctional relationships in which our policies wind up being at the mercy of our clients and we receive a share of the blame for subsidizing allied mistakes.

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