Sunday, February 19, 2006

20/20 Perspective: The Decision to Invade Iraq

Ironically, the best 20/20 analysis of the Iraq war that I have read was actually a work of foresight. It was simply titled "An Unnecessary War", and it was published in the January/February 2003 edition of the journal Foreign Policy. Even more ironic was the identity of the authors: John J. Mearsheimer of the University of Chicago and Stephen J. Walt of Harvard University are two of America's foremost academic proponents of "international realism", the theoretical approach that stresses the paramountcy of national interest and balance of power in international affairs--the very same fount of wisdom that many conservatives claim as their own. I used the article in my International Relations class in the spring of 2003 as the debate over whether to invade Iraq heated up and America began to prepare for an invasion. As a straightforward, textbook application of realist logic to a contemporary event, it is hard to beat.

Anyone interested in understanding the Iraq War should read the article in its entirety. I believe that it was reprinted in the New York Times, and is also available at and on several other websites.

Here are a few choice excerpts:

"Even many opponents of preventive war seem to agree deterrence will not work in Iraq. Instead of invading Iraq and overthrowing the regime, however, these moderates favor using the threat of war to compel Saddam to permit new weapons inspections. Their hope is that inspections will eliminate any hidden WMD stockpiles and production facilities and ensure Saddam cannot acquire any of these deadly weapons. Thus, both the hard-line preventive-war advocates and the more moderate supporters of inspections accept the same basic premise: Saddam Hussein is not deterrable, and he cannot be allowed to obtain a nuclear arsenal.

One problem with this argument: It is almost certainly wrong. The belief that Saddam's past behavior shows he cannot be contained rests on distorted history and faulty logic. In fact, the historical record shows that the United States can contain Iraq effectively - even if Saddam has nuclear weapons - just as it contained the Soviet Union during the Cold War. Regardless of whether Iraq complies with U.N. inspections or what the inspectors find, the campaign to wage war against Iraq rests on a flimsy foundation. "


"Those who call for preventive war begin by portraying Saddam as a serial aggressor bent on dominating the Persian Gulf. The war party also contends that Saddam is either irrational or prone to serious miscalculation, which means he may not be deterred by even credible threats of retaliation. Kenneth Pollack, former director for gulf affairs at the National Security Council and a proponent of war with Iraq, goes so far as to argue that Saddam is "unintentionally suicidal."

The facts, however, tell a different story. Saddam has dominated Iraqi politics for more than 30 years. During that period, he started two wars against his neighbors - Iran in 1980 and Kuwait in 1990. Saddam's record in this regard is no worse than that of neighboring states such as Egypt or Israel, each of which played a role in starting several wars since 1948. Furthermore, a careful look at Saddam's two wars shows his behavior was far from reckless. Both times, he attacked because Iraq was vulnerable and because he believed his targets were weak and isolated. In each case, his goal was to rectify Iraq's strategic dilemma with a limited military victory. Such reasoning does not excuse Saddam's aggression, but his willingness to use force on these occasions hardly demonstrates that he cannot be deterred. "

{ Anyone who has followed Saddam's career since he was found hiding in a hole near Tikrit cannot help but be impressed by the unswerving nature of his lifelong instinct for self-preservation. That he is, in the language of international realism "eminently deterrable". Furthermore, Osama Bin Laden's recent video likening George Bush to Saddam Hussein just shows how fantastic was the suggestion that Saddam and Osama were close enough to actually share nuclear weapons--MC }


"If Saddam's use of chemical weapons so clearly indicates he is a madman and cannot be contained, why did the United States fail to see that in the 1980s? Why were Rumsfeld and former President Bush then so unconcerned about his chemical and biological weapons? The most likely answer is that U.S. policymakers correctly understood Saddam was unlikely to use those weapons against the United States and its allies unless Washington threatened
him directly. The real puzzle is why they think it would be impossible to deter him today. "


"Ironically, some of the officials now advocating war used to recognize that Saddam could not employ nuclear weapons for offensive purposes. In the January/February 2000 issue of Foreign Affairs, for example, National Security Advisor [Condoleeza] Rice described how the United States should react if Iraq acquired WMD. "The first line of defense," she wrote, "should be a clear and classical statement of deterrence - if they do acquire WMD, their weapons will be unusable because any attempt to use them will bring national obliteration." If she believed Iraq's weapons would be unusable in 2000, why does she now think Saddam must be toppled before he gets them? For that matter, why does she now think a nuclear arsenal would enable Saddam to blackmail the entire international community, when she did not even mention this possibility in 2000? "


"The lack of evidence of any genuine connection between Saddam and al Qaeda is not surprising because relations between Saddam and al Qaeda have been
quite poor in the past. Osama bin Laden is a radical fundamentalist (like Khomeini), and he detests secular leaders like Saddam. Similarly, Saddam has consistently repressed fundamentalist movements within Iraq. Given this history of enmity, the Iraqi dictator is unlikely to give al Qaeda nuclear weapons, which it might use in ways he could not control. "


"In sum, Saddam cannot afford to guess wrong on whether he would be detected providing al Qaeda with nuclear weapons, nor can he afford to guess wrong that Iraq would be spared if al Qaeda launched a nuclear strike against the United States or its allies. And the threat of U.S. retaliation is not as far-fetched as one might think. The United States has enhanced its flexible nuclear options in recent years, and no one knows just how vengeful Americans might feel if WMD were ever used against the U.S. homeland. Indeed, nuclear terrorism is as dangerous for Saddam as it is for Americans, and he has no more incentive to give al Qaeda nuclear weapons than the United States does - unless, of course, the country makes clear it is trying to overthrow him. Instead of attacking Iraq and giving Saddam nothing to lose, the Bush administration should be signaling it would hold him responsible if some terrorist group used WMD against the United States, even if it cannot prove he is to blame. "

"If the United States is, or soon will be, at war with Iraq, Americans should understand that a compelling strategic rationale is absent. This war would be one the Bush administration chose to fight but did not have to fight. Even if such a war goes well and has positive long-range consequences, it will still have been unnecessary. And if it goes badly - whether in the form of high U.S. casualties, significant civilian deaths, a heightened risk of terrorism, or increased hatred of the United States in the Arab and Islamic world - then its architects will have even more to answer for.

Regardless of whether Iraq complies with U.N. inspections or what the inspectors find, the campaign to wage war against Iraq rests on a flimsy foundation.

Nuclear terrorism is as dangerous for Saddam as it is for Americans, and he has no more incentive to give al Qaeda nuclear weapons than the United States does. "

{ Mearsheimer's and Walt's analysis is as useful today as it was at the beginning of 2003. It reminds us that whether or not the war is "justified" either in terms of humanitarian values or the threat of WMDs---the double-barrelled argument of the National Post, the Economist, Stephen Harper, Tony Blair, or Christopher Hitchens, to name some of the more estimable advocates of the war ---needs to be seen as just part of a larger calculus. Iraq was one of maybe half a dozen countries headed by violent dictators opposed to the United States, and one of perhaps two dozen countries that consistently violated human rights on a massive scale. If political capital (which was plentiful both domestically and internationally after 9/11) and financial and military resources are now extremely scarce, can we say that they have been wisely spent? The greatest tragedy of all would be if the United States proved unable to execute a necessary intervention in Korea, Pakistan, or Iran, or that such an intervention was made vastly more difficult, or that such an intervention was actually made necessary, because of an earlier, unnecessary war in Iraq. But then, hindsight is 20/20! ---MC }

Tuesday, February 07, 2006

Federalism and Public Policy II: Is Fiscal Imbalance Something to be "Fixed"?

Like finding unintended humour in an unlikely place? Take a look at "The Existence, Extent and Elimination of Canada's Fiscal Imbalance," a report released in June 2005 by a special Finance Subcommittee of the House of Commons, a.k.a. "the Loubier Report".

What was funny was how, in order to reach its bizarre conclusion that provinces should simply be given federal tax room to match their expenditure needs, the then-Conservative & Bloc Quebecois opposition majority on the Committee looked right past what an impressive array of experts from all corners of the political spectrum had to say about the subject. Consider the following comments:

  • "The provincial case that there is a fiscal imbalance between the responsibilities of the provinces and the revenue available to the federal government rests upon some very questionable assumptions." ---Janice MacKinnon, former Minister of Finance of Saskatchewan and author of Minding the Public Purse: The Fiscal Crisis, Political Trade-Offs and Canada's Future
  • "The very premise of the committee's work is faulty"---Brian Lee Crowley, founder of the Atlantic Institute of Market Studies
  • "[Having each level of government raise just as much tax revenue as it spends on its own responsibilities is] "both conceptually wrong and practically impossible"---Richard Bird, Rotman School of Management, University of Toronto
  • "Those are two items [i.e. the health care guarantee and fiscal re-balancing guarantee] that are not in what I was presented to analyze... I don't think, frankly, that those are in the platform, they're just under discussion. ...Those items were not costed, which leads me to believe that they're something that they're having under consideration that they're not committed to." ---Paul Darby, deputy chief economist of the Conference Board of Canada, explaining what elements of the Conservative election platform were left out of what he was presented for financial assessment
  • [The assumption of the Loubier Committee] "that there is an imbalance that needs fixing violates the first rule of policy analysis, which is to get the question right" ---Rod Dobell, Institute of Public Administration, University of Victoria

Clearly, "getting the question right" means understanding that the common everyday notion of an 'imbalance' as something that is by definition 'bad', needing to be "balanced", has virtually no place in this discussion. Most theorists of economic federalism instead attempt to estimate what the best level of imbalance is for efficient federal governance: how much federal fiscal leverage is needed to foster tax harmonization; prevent wasteful competition between provinces or a "race to the bottom" in terms of taxation and services; ensure that national standards are adhered to in health care and social policy; and cover the emergencies of the federal government's international jurisdiction in an increasingly global future.

What is really at issue in the current debate is whether there is a VFI (expenditure/revenue mismatch) once federal transfers (equalization and other direct spending obligations) are fully taken into account. Also at issue is whether, after a couple of decades in which the trade-off was the Feds cutting back on their share of shared cost programs in exchange for a loosening of conditions for federal funding, there should be a return to greater conditionality as the federal share of funding for social programs is increased. A little bit of history is in order here: the current strength of the federal position relative to the provinces follows a period in which their positions were reversed on two occasions. Fiscal relations have always been in flux, there has never been a perfect balance, nor has it ever been particularly important that they be balanced. Provinces have on occasion overstated the VFI by ignoring the significance of the 1977 tax transfer and referring to the old 50/50 shared cost formula as a valid benchmark. (Not without mentioning old levels of conditionality, you don't!)

It is noteworthy that in the early 1970s, before the federal fiscal position began to rapidly deteriorate, federal revenues in excess of own expenditures were around 30 percent; coincidentally, federal revenue balances since 1995 have once again been in the 30 percent range. Indeed, this has enabled the federal government to commit $65 billion in new health funding over the past six years. Of course, that does not completely close the differential between 7% annual rises in health spending and government revenues (including federal transfers) of only 5%. Paul Boothe and Mary Carson have shown in a recent study that this will leave a funding gap of $10 billion after five years, $12.9 billion after six years, and $15.9 billion after seven years. But I would be happier to see the federal government continue to pay down its debts and limit any future escalator clauses in federal transfers to the rate of growth in revenue, while provinces implement new revenue measures and economies of their own. As Paul Wells in McLeans Magazine bluntly put it last June, "Shut up and raise your own taxes"!

A federal budget balance of up to 30% "excess" revenue is both historically normal and potentially valuable to the pursuit of economic efficiency and equity within the federation. This fact should be recognized by provincial politicians even if --as in Quebec--they can't always say so. Such a recognition should be the basis for any intergovernmental agreement about what a "fair" federal cash contribution to provincial health care is. In the spirit of compromise, the federal government could commit to unconditional transfers of cash and tax room above the 30% level. As for conditionality, I would like to see a return to more dedicated funding for postsecondary education and income security. It is tempting under present circumstances for provincial governments to under-invest in these areas, especially given the high mobility of students, labourers and welfare recipients. It is an appropriate role for the federal government to ensure that non-health priorities such as municipal government and postsecondary education do not get crowded out by the undoubtedly greater pressures every province feels to put more money into healthcare, although the spirit of s. 106A of the Meech Lake Accord---i.e. providing for provincial opting out that is "compatible with national objectives"---is also appropriate.

As an academic, I am used to being ignored. I admit, it is amusing to see the careful testimony of an all-star team of experts swept under the political carpet by a parliamentary sub-committee. But there may be a serious downside to all of this. Prime Minister Harper will never stand in the House of Commons and say, as he did when he was a policy wonk at the National Citizens Coalition, that "two-tier health care is a great idea". What he will say, and has already said in his capacity as Conservative Party leader, is that he intends to let the provinces do what they wish with their own jurisdiction provided that is technically consistent with the provisions of the Canada Health Act. But this betrays either a naivete on the part of the Prime Minister about the law--since the Canada Health Act is far from self-applying and the precise scope of its provisions far from self-evident--or an assumption that we are naive: what provinces will actually wish to do depends in turn upon their fiscal capacity, along with the extent of Ottawa's willingness to use its own fiscal leverage to enforce and promote national standards.

Still think that federal tax room should simply be handed over to provinces in order to match any growth in their spending responsibilities? You've got to be kidding!