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Article Excerpt
The emerging norm of humanitarian intervention, or the Responsibility to Protect, resembles a social insurance policy to protect ethnic groups against genocide and ethnic cleansing. If a state perpetrates such genocidal violence, the norm calls for a payout--up to and including military intervention--to protect the group and ensure its security, often by enhancing its autonomy from the state. Unfortunately, this leads to a common pathology of insurance--moral hazard--whereby the expected payout for a loss unintentionally encourages excessively risky or fraudulent behavior. Thus, some militants may rebel despite the risk of provoking state retaliation, because they expect any resulting atrocities to attract intervention that facilitates their rebellion. This article summarizes recently published evidence for this dynamic, explores the feasibility of adapting insurance strategies that mitigate moral hazard, and then proposes a reform of humanitarian intervention based on the most feasible of these adapted strategies. KEYWORDS: humanitarian intervention, moral hazard, genocide, ethnic conflict, Responsibility to Protect, norms.
The emerging norm of humanitarian intervention, or Responsibility to Protect, resembles an imperfect insurance policy to protect ethnic groups against genocide and ethnic cleansing. If a state threatens to perpetrate such genocidal violence, the norm calls for a payout--up to and including military intervention--to protect the group and ensure its security, often by enhancing the group's autonomy from the state. Unfortunately, this leads to a common pathology of insurance--moral hazard--whereby the expected payout for a loss unintentionally encourages excessively risky or fraudulent behavior. Accordingly, some militants may rebel despite the risk of provoking state retaliation, because they expect any resulting atrocities to attract intervention that facilitates their rebellion. Ultimately intervention may help their rebellion succeed, but it often is too feeble or too late to avert state retaliation, just as insurance does not always restore the status quo ante even if it provides compensation. Underscoring the danger, the literature documents that rebellion is the most common trigger for genocidal violence by states. (1) Thus, contrary to its intent, the emerging norm of humanitarian intervention may actually cause some genocidal violence that otherwise would not occur (Figure 1). Although moral hazard has only recently been identified as a problem of humanitarian intervention, (2) it has been examined extensively in economics. Accordingly, this study assesses the feasibility of adapting prescriptions from the literature on insurance to mitigate the moral hazard of humanitarian intervention.
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Clear definitions are vital for such a sensitive topic. Humanitarian intervention, in this context, encompasses the full spectrum of potential international action motivated primarily by the humanitarian desire to protect civilian targets of state violence, as envisioned by the 2001 report The Responsibility to Protect and subsequent UN documents. (3) This ranges from pacific measures that respect traditional state sovereignty to forceful ones that impinge on it, including but not limited to the following: rhetorical condemnation; threats or imposition of economic sanctions; recognition of the independence of secessionist entities; air strikes on military or economic assets; military assistance to or coordination with rebels perceived as defending at-risk civilians; consensual deployment of peacekeepers; and nonconsensual deployment of troops for peace enforcement. Genocide is defined by UN convention. (4) Ethnic cleansing means the expulsion of members of an identity group from a territory by force or threat thereof. (5) Genocidal violence encompasses both of the preceding concepts. Genocidal retaliation is such violence employed by a state in response to an armed challenge to its authority.
In economics, the solution to moral hazard is not usually to eliminate insurance, which can serve important social needs by protecting the insured against risk. Rather, we reform insurance to reduce its tendency to promote excessive risk taking while partially preserving its safety net, thereby minimizing human suffering. Analogously, humanitarian intervention can serve the important social need of protecting innocent civilians from harm. Simplistically addressing moral hazard by eliminating intervention could actually increase genocidal violence. Instead, we should reform the practice of intervention to reduce moral hazard and thereby minimize such violence.
This article first discusses the analogies between insurance and intervention. Then it summarizes two recent cases where the moral hazard of humanitarian intervention exacerbated ethnic violence. Next it examines theoretical obstacles to reducing moral hazard. The heart of the article explores four approaches--cost sharing, randomization, regulation, and other methods--that have been used to mitigate moral hazard across a wide range of insurance schemes, from private provision of car, life, and medical insurance, to public provision of bank deposit and unemployment insurance. For each approach, the article infers analogous reforms for humanitarian intervention and examines their potential efficacy and practicality. The most promising strategies are then combined into a proposed reform package. The article concludes by exploring the trade-off between competing values that is implicit in any policy of humanitarian intervention.
Moral Hazard Analogies
A typical example of moral hazard arises when government provides unemployment insurance, or "the dole." The goal is to provide temporary financial protection to the jobless, to mitigate the negative impact on them and the larger economy, and to facilitate their finding a good job. But in practice, by alleviating suffering, such insurance creates moral hazard that encourages both irresponsibility (not looking hard for a job) and outright fraud (deliberately not finding a job, for those who prefer a work-free insurance payout to working for a higher salary). (6) Thus, a policy intended to increase income of the disadvantaged may unintentionally have the opposite effect.
This domestic example has been replicated on an international scale in recent years by the advent of bailouts from the International Monetary Fund (IMF). Such bailouts provide an infusion of hard currency to states in emerging markets that otherwise would default on their foreign debt because of severe balance-of-payments deficits. The goal is to preserve domestic and international economic welfare and stability by reassuring lenders and investors that they can continue to do business in emerging markets without fear of huge losses. But reducing the penalty to states for risky economic policies and to lenders for risky loans has the unintended consequence of encouraging these inefficient behaviors that undermine economic stability. (7)
Problems of moral hazard apply to humanitarian intervention as well. The international community has sought to insure vulnerable groups against the risk of genocidal violence, as codified recently in The Responsibility to Protect. In so doing, however, it inadvertently has encouraged such groups to engage in the risky behavior of launching rebellions that may provoke genocidal retaliation. A distinction can be drawn between rebels who intentionally provoke genocidal retaliation (fraud) and those who merely knowingly run a high risk of provoking such violence (excessive risk taking). But moral hazard is responsible in both instances so long as two conditions hold: the rebels challenge the state because they expect that state retaliation likely would spur intervention enabling them to prevail; and the rebels accept in advance that genocidal retaliation against their own civilians is a tolerable cost to achieve their political objective. As in economics, moral hazard does not require protection to be guaranteed but merely probable. Just as prospective IMF bailouts create moral hazard, despite being merely likely rather than guaranteed, so the Responsibility to Protect creates moral hazard even though it does not absolutely ensure humanitarian intervention.
Obviously, the prospect of intervention is not a cause of every rebellion, let alone of all genocidal violence. Likewise, the dole is not responsible for all unemployment, yet we still strive for reforms to mitigate its perverse contribution to the very problem that it was intended to solve. Analogously, even though moral hazard may not contribute to all genocidal violence, we should explore reforms of humanitarian intervention to minimize its unintentional contribution to such violence. Finally, it should be underscored that nothing in this analysis exculpates the perpetrators of genocidal violence from ultimate responsibility for their criminal acts.
Evidence from the Balkans
Evidence for the moral hazard of humanitarian intervention has been documented in several conflict zones, including most recently the Darfur region of Sudan, where Roberto Belloni finds that "the responsibility to protect is reactive, contributes to the outbreak of violence and then gives incentives to oppressed groups to continue their struggle to attract international involvement." (8) But the most thoroughly documented cases are Bosnia and Kosovo during the 1990s. (9) In both instances, genocidal violence targeted ethnic groups--Bosnia's Muslims and Kosovo's...
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