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Reconstructing Weak and Failed States: Foreign Intervention and the Nirvana Fallacy


  • Author's note: I thank Peter Boettke, Sara Braca, Tyler Cowen, and two anonymous referees for helpful comments. This study was financially supported by a grant from the Earhart Foundation and Mercatus Center. The usual caveat applies.


Attempts to reconstruct weak and failed countries suffer from a nirvana fallacy. Where central governments are absent or dysfunctional, it is assumed that reconstruction efforts by foreign governments generate a preferable outcome. This assumption overlooks (1) the possibility that foreign government interventions can fail, (2) the possibility that reconstruction efforts can do more harm than good, and (3) the possibility that indigenous governance mechanisms may evolve that are more effective than those imposed by military occupiers. It is argued that reconstruction efforts focus on resolving the meta-level game of creating self-sustaining liberal democratic institutions while neglecting the nested games embedded within the general meta-game. An analysis of Somalia, a prototypical failed state, is provided to illuminate these claims. While Somalia lacks a central government, the private sector has developed coping mechanisms to fill the void. These mechanisms have proven to be more effective in generating widespread order than attempts by foreign occupiers to impose a self-sustaining liberal state.