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The problem of credible commitment in reconstruction*

Published online by Cambridge University Press:  01 April 2009

CHRISTOPHER J. COYNE  and
PETER J. BOETTKE
CHRISTOPHER J. COYNE*
Affiliation:
Department of Economics, West Virginia University, USA
PETER J. BOETTKE*
Affiliation:
Department of Economics, George Mason University, Fairfax, VA, USA
*
*Email: [email protected]
**Email: [email protected]
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Abstract

Reconstruction involves military occupation with the aim of rebuilding and reforming both formal and informal institutions along liberal democratic lines. We contend that successful reconstructions require mechanisms that make reforms credible over the long run. In the absence of a signal of sustained credible commitment, institutional reforms will not be trusted by the populace resulting in the failure of the broader reconstruction. The incentive and epistemic aspects of the credible commitment problem are analyzed. We also consider potential solutions to the problem of credible commitment. Absent such solutions, attempts to ‘export’ institutions via military occupation will fail or produce dysfunctional outcomes. An analysis of the numerous aspects of the credibility problem in the current reconstruction of Iraq is provided to illuminate the central arguments.

Type
Research Article
Information
Journal of Institutional Economics , Volume 5 , Issue 1 , April 2009 , pp. 1 - 23
Copyright
Copyright © The JOIE Foundation 2009

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