In Afghanistan, Give Cash a Chance

Afghan National Army workers receive a lot of U.S. funding Photograph by Brendan Smialowski/AFP via Getty Images

As military operations ramp down in Afghanistan and President Obama opines that U.S. military action “cannot be the only—or even primary—component of our leadership in every instance,” it’s time to look for other ways to preserve the peace. In post-conflict environments from Afghanistan to Liberia, money saved from military operations can be used to provide direct cash transfers to ex-combatants and other members of society. At a fraction of the cost of a continued military presence, such cash could tamp down violence and help kick-start broader development progress that will support peace in the long term.

The Center for Strategic and International Studies estimates (PDF) that from 2001 to 2013, U.S. budget outlays for Afghanistan totaled $642 billion. That doesn’t capture spending on veterans and further benefits related to the war. For 2012-3, the Department of Defense spent about $191 billion on Afghanistan—the considerable majority on U.S. military costs, including $17 billion to bolster the Afghan army. This compares to about $3.7 billion spent by USAID on civilian aid projects and $1.7 billion on counter-narcotics operation to reduce opium production.

International support for the Afghan military has doubtless played a role in containing the Taliban. “As long as donors remain willing to pay their salaries, the sheer numbers of Afghan security personnel—possibly in the 370,000 range today—are a formidable obstacle to large-scale strategic gains by the insurgents” concludes the International Crisis Group. It’s worth noting that the U.S. alone spends over $3,000 per Afghan per year on the war—over four times the country’s per capita gross domestic product. The Department of Defense spent $567 per Afghan per year on the country’s military alone. That’s four-fifths of Afghanistan’s GDP per capita.

By far the biggest direct boost the U.S. is giving to Afghanistan’s economy, in other words, looks to be through funding the country’s security forces. Perhaps paying some of those people to do something other than fight would have a higher payoff.

The record of direct cash payments in reducing violence around the world is mixed, but it nonetheless suggests they can play a role in providing an alternate livelihood for fighters and reducing levels of violence, at least in the short term. A study by economists at the Catholic University of Louvain and the University of Brussels looked at a demobilization effort in Burundi. They found that $515 in cash payments to ex-combatants over two years increased their spending in the short term but didn’t have any impact on consumption over the longer term. The authors conclude that the payments helped reduce the relapse into conflict in the short term but that it was “not sufficient for creating a virtuous circle towards development and peace.”

Conversely, in Uganda, a cash transfer program (PDF) to unemployed youth did sustainably increase their earnings. It also reduced rates of violence among men in the short term—fights and confrontations with the police fell, though the transfers had no long-term impact on male aggression (and slightly increased violence among women). In Liberia, a study (PDF) of transfers to ex-combatants by Chris Blattman and Jeannie Annan for the Innovations for Poverty Action group found that cash transfers and training there increased the wealth of former youth soldiers and considerably reduced the appetite of recipients to take part in conflict in the neighboring country of Cote d’Ivoire—but it didn’t reduce additional measures of the potential to return to violence.

Transfers don’t appear to directly guarantee lower rates of violence among recipients over the long term, but they could still play a vital role in conflict prevention. Around the world, cash transfers have demonstrated a positive impact on everything from health and education to lowered crime rates and reduced HIV infections. Work by David Mason at the University of North Texas and colleagues studying the aftermath of civil wars around the world from 1944 to 1997 suggests (PDF) that peace is more likely to be sustained following a civil war if there is a peacekeeping operation—but also if there is stronger economic growth. For every year the peace holds, the more likely it is to continue. The results suggest that, in the aftermath of a peacekeeping effort, the short-term effect of cash transfers in suppressing violence and their long term effect on measures of health, wealth, and education could each play important roles in preserving stability.

A further benefit to cash transfers is that they’re practical. Direct cash payments can be made to hundreds of thousands of people. They’ve been widely used in fragile states. A demobilization program (PDF) in the east of the Democratic Republic of the Congo paid around 100,000 ex-combatants $410 apiece to help them make the transition out of armed groups. To ensure that the right people got the right payment, the combatants were identified by iris scans (a technology already used to register over one-half of India’s 1.2 billion people for a national ID card). Cash transfer schemes operated on a large scale in Pakistan after flooding a few years ago and in Yemen as part of a program to get more girls into school.

Imagine a program that provided direct cash transfers of a few hundred dollars to every Afghan household—about the same as per capita GDP. It could double payments to 500,000 ex-insurgents and security force personnel. That program would cost a little over $20 billion a year—or around one-quarter of 2013 Pentagon outlays in Afghanistan. The payments could even come with conditions: Kids must be in school and attending health clinics, perhaps; or payments are only made if there is a downward trend in rates of violence against security forces at the district level. The payments would certainly be large enough to make a considerable difference to the quality of life and prospects of the average Afghan—and to encourage stability.

The role of cash in preserving peace could extend beyond Afghanistan to such countries as Liberia and Mali. Neither troops nor cash are any guarantor of long-term stability, but military intervention is considerably more costly and comes with fewer side benefits in terms of investments in business and education. Buying peace could save both lives and money.

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