SAMS Monograph Series

Stability Economics

The Economic Foundations of Security in

Post-conflict Environments

Monographs from the

School of Advanced Military Studies

General Editors 

Nathan W. Toronto and Dan G. Cox

Combat Studies Institute Press

 US Army Combined Arms Center

 Fort Leavenworth, Kansas
Meeting of the Minds (cover photo)

US service members meet with a member of a local Kuchi tribe residing in Bawka 

district in Farah province, Afghanistan, June 12, 2010. The service members, assigned 

to the Provincial Reconstruction Team Farah, visited three villages in the district to 

gather information on the needs of the village residents and to promote the importance 

of seeking government assistance to help resolve those needs.

US Air Force photo by Senior Airman Rylan K. Albright
Stability Economics

The Economic Foundations of Security in Post-conflict Environments

General Editors 

Nathan W. Toronto and Dan G. Cox

Combat Studies Institute Press

Fort Leavenworth, Kansas

Editor 

Carl W. Fischer

2012

Combat Studies Institute Press

US Army Combined Arms Center

Fort Leavenworth, Kansas
ii

Library of Congress Cataloging-in-Publication Data

Stability economics : the economic foundations of security in post-conflict environments 

/ edited by Nathan W. Toronto.

 p. cm.

 Includes bibliographic references and index.

 ISBN 978-0-9855879-5-6 (alk. paper)

 1. National security--Economic aspects. 2. Internal security--Economic aspects. 3. 

Postwar reconstruction--Economic aspects. 4. United States--Military policy--Economic 

aspects. I. Toronto, Nathan W. II. Cox, Daniel G. 

 HC79.D4.S72 2012

 330--dc23

 2012030456

Disclaimer: Opinions, conclusions, and recommendations expressed or implied within 

are solely those of the author, and do not represent the views of the US Army School of 

Advanced Military Studies, the US Army Command and General Staff College, the United 

States Army, the Department of Defense, or any other US government agency. Cleared for 

public release: distribution unlimited.

First printing 2012

Combat Studies Institute Press publications cover a wide variety of military 

history topics. The views expressed in this CSI Press publication are those 

of the author(s) and not necessarily those of the Department of the Army or 

the Department of Defense. A full list of CSI Press publications available 

for downloading can be found at:

http://usacac.army.mil/CAC2/CSI/index.asp

The seal of the Combat Studies Institute authenticates this document as an official 

publication of the CSI. It is prohibited to use CSI’s official seal on any republication 

without the express written permission of the Director of CSI.
iii

Contents

Introduction

 Dr. Nathan W. Toronto ................................................................................................1

Entrepreneurial Expeditionary Economics and the United States Military

Right Task, Wrong Tool?

 Major Thomas J. Archer-Burton RHG/D - British Army............................................7

Expeditionary Economics and Its Implications on the United States Army

 Major Marc E. Pelini - United States Army ..............................................................35

Expeditionary Economics in Turbulent Times 

 Lieutenant Colonel James R. Connally – United States Army..................................73

Comparing Models for the Restoration of Essential Services during

Counterinsurgency Operations

 Major Anthony P. Barbina - United States Army ....................................................105

Shari’a Compliant Finance

The Overlooked Element for Developing an Effective Financial

System in Afghanistan

 Lieutenant Colonel Jan Willem Maas - Royal Netherlands Army ..........................189

Conclusion

 Dr. Dan G. Cox........................................................................................................221

Bibliography ...................................................................................................................227
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1

Introduction

by

Nathan W. Toronto

In the years after invading Iraq and Afghanistan, the US military realized that it had a 

problem: How does a military force set the economic conditions for security success? This 

problem was certainly not novel—the military had confronted it before in such diverse 

locations as Grenada, Haiti, Bosnia, and Kosovo. The scale and complexity of the problem, 

however, were unlike anything military planners had confronted beforehand. This was 

especially the case in Iraq, where some commentators expected oil production to drive 

reconstruction.1

 When the fragile state of Iraq’s infrastructure and a rapidly deteriorating 

security situation prevented this from happening, the problem became even more vexing: 

Should a military force focus on security first, or the economy? How can it do both? This 

is the challenge of Stability Economics.

One answer to this problem in Iraq was the Commander’s Emergency Response 

Program (CERP) and using money as a weapon system.2

 The notion was that commanders 

could target funding at projects that would contribute to improvements in the economy 

and the security situation simultaneously. Beyond sparking an ongoing debate about 

CERP effectiveness,3

 the evolution of money as a weapon system occurred under the 

shadow of a larger debate over whether the US military should prepare the future force 

for population-centric counterinsurgency operations or for large-unit combined arms 

maneuver operations.4 A force prepared for population-centric counterinsurgency would 

presumably also be better positioned to set the economic conditions for security success 

in a post-conflict environment. In very general terms, what one observer playfully called 

COINdinistas5

 would favor the building of military doctrine and competencies to prepare 

the force to build economies in the future, the expectation being that facing such challenges 

are inevitable for the US military. Thus, the debate over how good the military should be 

at economic development influenced and was influenced by the debate over force structure 

and the character of future warfare. 

These debates arose in Afghanistan, as they did in Iraq, but at a later date. One important 

reason for this was the gap in resources that the US military dedicated to Iraq as opposed 

to Afghanistan. While the scale of US involvement in Iraq ballooned in 2006 and 2007, the 

problem of Stability Economics came into sharp focus. The force used some of the solutions 

learned in Iraq in Afghanistan, including CERP and using money as a weapon system, but 

the decidedly primitive nature of Afghan infrastructure placed limits on the transferability 

of such lessons. So, as the US military surged forces and resources to Afghanistan after the 

election of President Barack Obama and the winding down of operations in Iraq, military 

planners searched for solutions to new problems of Stability Economics.

One solution to these new problems was expeditionary economics, sponsored by the 

Ewing Marion Kaufmann Foundation.6

 Consistent with its mission to “help individuals 

attain economic independence by advancing educational achievement and entrepreneurial 
2

success,”7 then-President and CEO Carl J. Schramm saw an opportunity to spur economic 

growth in the aftermath of military conflicts and natural disasters.8 In addition, he advocated 

the development of an economic development capability organic to the US military, akin 

to the School of Government that trained military commanders and staff officers for civil 

governance in post-World War II Germany and Japan.9

 In May 2010, the Foundation held 

a conference at its Kansas City, Missouri, headquarters to spur a debate on these ideas. 

There were two follow-on conferences—held at the US Military Academy at West Point, 

New York, in February and May 2011—to further develop and convey these ideas. Then 

the momentum stalled. The Foundation published a few occasional papers,10 but after 

Schramm’s quiet and quite unexpected departure in January 2012 the Foundation decided 

to begin no more expeditionary economics initiatives, arguing that the idea, in the words of 

a person familiar with the situation, had “taken on a life of its own” and no longer needed 

support from the Foundation.

Suspicion lurks, however, that the tongue was firmly in the cheek. At least one of 

the co-editors of this volume attended all three expeditionary economics conferences and 

had repeated interaction with individuals from the Foundation, both in person and over 

the phone. Rarely did the conversation move beyond whether the US military could—or 

should—be involved in economic development, much less reach the level of operational 

detail required to make expeditionary economics a military planning reality. In fact, at the 

first follow-on conference in February 2011, one of the editors of this volume asked when 

the conference would discuss such operational details, but was told that developing those 

details was the purpose of the second follow-on conference, in May 2011. Such operational 

specifics did not materialize then, either. Furthermore, repeated requests for the Foundation 

to comment on expeditionary economics-related work by operational planners at the US 

Army School of Advanced Military Studies (SAMS) went largely unrequited. Not only 

has the US military failed to develop an organic economic development capability—per 

Schramm’s objective—but the theory and knowledge to do so is still unavailable. By 

all reasonable accounts, then, the expeditionary economics movement had only limited 

success.

This volume on Stability Economics begins to fill the gap that expeditionary economics 

did not: the operational details. What is the theoretical relationship between economics and 

security? What strategic, political, and environmental contexts do military planners need 

to consider in order to write economic development lines of effort into operations? At what 

point do economic development efforts pass from being necessary to achieve the security 

mission to being humanitarian aid mission creep?

Stability Economics also puts the CERP effectiveness and force structure debates 

into their proper operational context. With respect to CERP effectiveness and money as a 

weapon system, Stability Economics recognizes that setting the economic conditions for 

security success entails more than targeting money effectively; it also entails a thorough 

appreciation of the social, political, and geographic conditions of the fight in which a 

military unit is engaged. In fact, armed with a robust theory of how economies grow in 

turbulent post-conflict environments, commanders could recognize that there are times 

when it is actually better to not spend money. By broadening the theoretical aperture, 
3

Stability Economics gives commanders and planners the perspective they need set the 

economic conditions for security success. It is about more than spending money. It is about 

understanding the unique characteristics of post-conflict economies.

The proper operational context for the force structure debate—should the force prepare 

for counterinsurgency or major combat or something in between?—is as a political condition 

for the conduct of Stability Economics. Individual military planners rarely, if ever, have the 

luxury of determining the structure of the force that will conduct the military operations 

they plan. They may influence this structure, but only in an indirect, diffuse way, through 

contributions to professional military discussions or in such forums as the Quadrennial 

Defense Review. More often than not, military planners take the force structure given 

in the context of the forces available and the political end states desired. For example, 

determining whether the force should include a 20,000-man advisor corps seems ancillary 

to setting the economic conditions for security success. Better to have a clear idea of how 

a commander might use any force to achieve economically-relevant goals. This is the gap 

that this volume on Stability Economics begins to fill.

We present herein five SAMS monographs, as an effort to understand Stability 

Economics from the perspective of theory, history, and practice. The first two monographs 

review the theory related to Stability Economics. The first, “Entrepreneurial Expeditionary 

Economics and the United States Military: Right Task, Wrong Tool?” by Major Thomas 

Archer-Burton (United Kingdom Land Forces), provides a critical review of expeditionary 

economics. The second monograph, “Expeditionary Economics and Its Implications for 

the United States Army,” by Major Marc Pelini (United States Army), is more receptive 

to concepts in expeditionary economics, although it also offers a wider review of theory 

related to economics in war zones and highlights the need to develop some sort of Stability 

Economics capacity. The third monograph, “Expeditionary Economics in Turbulent 

Times,” by Lieutenant James Connally (United States Army), presents a historical case of a 

government applying Stability Economics principles: the Peruvian government combating 

Shining Path guerrillas. In doing so, it also emphasizes the importance of understanding 

the political and social context of an economy; some principles of Stability Economics may 

exhibit stability over time and space, but rarely are these principles truly immutable. 

The final two monographs begin to delve into the operational details of Stability 

Economics. The fourth monograph, “Comparing Models for the Restoration of Essential 

Services during Counterinsurgency Operations,” by Major Anthony Barbina (United States 

Army), examines the dominant model for restoring essential services—sewer, water, 

electrical, academics, trash (SWEAT)—against experience in Iraq and Afghanistan, and 

concludes that a more flexible Factor-Precedence Model provides a more robust framework 

for restoring essential services. The fifth and final monograph, “Shari’a Compliant 

Finance: The Overlooked Element for Developing an Effective Financial System in 

Afghanistan,” by Lieutenant Colonel Jan Willem Maas (Kingdom of the Netherlands 

Army), evaluates an alternative financial system model for Afghanistan, questioning as it 

does the appropriateness of Western modes of finance. While these final two monographs 

hardly cover the gamut of what doctrine on Stability Economics could entail, establishing 

a financial system and restoring essential services figure to be two critical pieces of the 
4

puzzle. Furthermore, they contribute practical, operational details to add to the history and 

theory of Stability Economics.

Military commanders and staffs will need to understand the theory, history, and 

practice of Stability Economics because they will undoubtedly confront this simple: How 

does a military force set the economic conditions for security success? In an increasingly 

globalized world economy, this is especially the case for the US military, since the United 

States has global interests and global reach. Furthermore, this question will likely obtain in 

a wide variety of different conflicts, from small advise and assist operations as in Uganda 

and the Philippines to larger-scale operations as in Iraq or Afghanistan. The scale and scope 

of the question may be different, but the need to understand the unique characteristics of 

economics in a combat zone will be the same. 
5

Notes

1. See, for example, Kenneth Pollack, The Threatening Storm: The Case for Invading Iraq

(Random House, 2002).

2. See Leonard J. DeFrancisci, “Money as a Force Multiplier in COIN,” Military Review (May–

June 2008), 21–8; Center for Army Lessons Learned, Commander’s Guide to Money as a Weapon 

System, Handbook no. 09-27 (April 2009); Jason W. Condrey, “The Commander’s Emergency 

Response Program: A Model for Future Implementation” (Master’s thesis, School of Advanced 

Military Studies, Ft. Leavenworth, KS, 2010).

3. Eli Berman, Jacob N. Shapiro, and Joseph H. Felter, “Can Hearts and Minds Be Bought? The 

Economics of Counterinsurgency in Iraq,” Journal of Political Economy, vol. 119, no. 4 (August 

2011), 766–819; Michael Fischerkeller, “The Premature Debate on CERP Effectiveness,” PRISM, 

vol. 2, no. 4 (September 2011), 139–50.

4. Gian P. Gentile, “Freeing the Army From the Counterinsurgency Straightjacket,” Joint 

Force Quarterly, iss. 58 (3rd Quarter 2010): 121–2; John Nagl, “Learning and Adapting to Win,” 

Joint Force Quarterly, iss. 58 (3rd Quarter 2010): 123–4; Gian P. Gentile, “A Strategy of Tactics: 

Population-centric COIN and the Army,” Parameters (August 2009), 5–17; Elisabeth Bumiller, 

“West Point Divided on War Doctrine’s Fate,” New York Times (27 May 2012). See also Frank 

G. Hoffman, “Future Threats and Strategic Thinking,” Infinity Journal, vol. 1, no. 4 (Fall 2011); 

Hoffman; Dan G. Cox, Thomas Bruscino, and Alex Ryan, “Why Hybrid Warfare is Tactics Not 

Strategy: A Rejoinder to ‘Future Threats and Strategic Thinking,’” Infinity Journal, vol. 2, no. 2 

(Spring 2012).

5. “A Few Random Thoughts on COIN Theory and the Future,” Small Wars Journal, accessed 

on 29 May 2012 at http://smallwarsjournal.com/blog/a-few-random-thoughts-on-coin-theory-andthe-future.

6. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and Disasters,” 

Foreign Affairs (May/June 2010), 89–99; Carl Schramm, “Institutionalizing Economic Analysis in 

the U.S. Military: The Basis for Preventive Defense,” Joint Force Quarterly, issue 61 (2d quarter 

2011): 32–8.

7. Ewing Marion Kaufmann Foundation, “Vision, Mission, and Approach,” accessed at http://

www.kauffman.org/about-foundation/vision-mission-and-approach.aspx on 30 May 2012.

8. Schramm, “Expeditionary Economics.”

9. Schramm, “Institutionalizing Economic Analysis.”

10. See, for example, Rebecca Patterson and Dane Stangler, “Building Expeditionary 

Economics: Understanding the Field and Setting Forth a Research Agenda,” Kaufmann Foundation 

Research Series: Expeditionary Economics (November 2010); Jake Cusack and Erik Malmstrom, 

“Bactrian Gold: Challenges and Hope for Private-Sector Development in Afghanistan,” Kaufmann 

Foundation Research Series: Expeditionary Economics (February 2011).
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7

Entrepreneurial Expeditionary Economics and the United States Military

Right Task, Wrong Tool?

by

Major Thomas J. Archer-Burton RHG/D - British Army

Abstract

Should the United States military alter current development practices by entwining 

entrepreneurial expeditionary economics into a new approach to the successful delivery 

of aid? This study explores whether the military is the right actor to deliver the policy 

of entrepreneurial expeditionary economics. Focusing on the current operational 

environment, evidence suggests that frustrations exist within the military over the progress 

of nongovernmental organizations and other government agencies in counterinsurgency 

environments, and this has resulted in a blurring of the military civilian relationship; 

this goes some way to explain the move towards the militarization of aid that is inherent 

within the concept of entrepreneurial expeditionary economics, which is at a pivotal point 

of inception. Much work is required to place entrepreneurial expeditionary economics in 

context with governance, political, social, and security efforts before the military should 

ascribe to the concept in its’ current form. Notwithstanding the study’s findings that 

entrepreneurial expeditionary economics has much potential in its’ relevance to current and 

future military operations, there is little evidence that the military is the credible owner of 

the tools to engage in this form of development and weaknesses arise in both the conceptual 

realm and the practical reality of the entrepreneurial model as the driver for developmental 

change in counterinsurgency operations.

Introduction

Expeditionary economics is a concept first developed by the Kauffman Foundation in 

2010. No definition of the concept yet exists, not least by the Kaufmann Foundation and the 

United States Military, yet as a tool to help commanders in post-conflict operations, it has 

received much positive attention. There is a movement developing to create an addendum to 

FM 3-24 in order to incorporate expeditionary economics, and studies are being conducted 

by West Point, The Kauffman Foundation, and the Council for Foreign Relations, to ensure 

buy-in from senior military leaders in accepting the relevancy of expeditionary economics 

and its’ doctrinal importance.1

The concept is at a pivotal point of inception and much work is required to place the 

concept in context with governance, political, social, and security efforts. Expeditionary 

economics needs to be relevant to current and future operations, and be justified that the 

military is a credible owner of the tools to engage in this form of development.2

Expeditionary economics’ background is traced to the economic models of Keynes 

and Hayek, and these must be understood to form any basis for combating economic crisis 

and implementing potential solutions. Although these two economists disagree on the 

fundamental nature of why economies collapse, the essential point is that both Hayekian 

and Keynesian frameworks assert that once an economy has collapsed, recovery takes 
8

a long time. For Hayek, recovery from a crisis caused by over-consumption and undersaving has to run its course, and cannot be speeded up by a Keynesian fiscal or monetary 

stimulus. It requires time before consumers recover from under-saving and business gains 

confidence that profitability can be restored. 3

Keynesians believe that, once aggregate demand has subsided, a fiscal and monetary 

boost is the only way to get the economy growing again. Post-conflict environments are 

very different to the formal structures of the economies that Keynes and Hayek witnessed, 

and economic collapse in countries that have experienced conflict trace the roots not to 

the economic, but in the security and political sphere. Nevertheless, the model implied by 

expeditionary economics focuses on a western view of economic markets; how to impose 

this model into a non-Western framework is challenging, and arguably counterproductive. 

Essentially, the first part of the monograph will seek to define what expeditionary economics 

is, and why it is important. 

FM 3-24 would appear to be the right document to express expeditionary economic 

doctrine. Current experience in Iraq and Afghanistan has shown that Soldiers are increasingly 

forced to rebuild economies without proper doctrinal or institutional support. Commanders 

on the ground are often left with little guidance as to how to develop post-conflict economics 

and the concept of expeditionary economics is thus designed to encompass the instances 

in which military and civilian expeditions must implicitly rebuild an economy. Fostering 

economic success, the third leg in the stool of diplomacy, defense, and development, needs 

clarification in doctrinal form in order to become an effective dimension of American 

expeditionary capacity. The second section of the monograph will seek to define who the 

players are in expeditionary economics, and specifically, their capabilities, limitations, and 

roles. The Commander’s Emergency Response Program and other development programs 

will be analyzed as well as it relates directly to the expeditionary economics movement.

Expeditionary economics encompasses and informs many larger ideas about national 

security, strategy, and the exercise of power, and leaves itself open to the criticism of being 

a form of militarization of foreign policy. In trying to operationalize the concept, the final 

part of the monograph will seek to explore whether the military is the right actor to deliver 

the policy of entrepreneurship in a post-conflict environment, and is the main reason why 

this current study is being conducted.

The Importance of Economic Development

Why should the United States military be concerned and tasked with economic 

development? The military has been engaged equally, if not greater, in non-kinetic operations 

in the counterinsurgency efforts in Afghanistan and Iraq and the most recent case of Haiti 

is truly an attempt at a non-kinetic, humanitarian aid/economic development operation, all 

within the framework of delivering strategic success, yet economic progress within the 

countries that current operations focus upon has been limited. More than a decade after the 

United States and her allies entered into the Balkans, the social and economic dimension of 

conflict provides sparse evidence of strategic success. No less so in the current fight. The 
9

foundation of expeditionary economics promotes post-conflict economic entrepreneurial 

development and seeks to operationalize the concept by providing doctrine at the nonkinetic level.

From a historical stance, military involvement in economic entrepreneurial development 

is consistent with post-conflict circumstances. The Marshall Plan centered upon economic 

activity in rebuilding a war-ravaged Western Europe, and economic planning was at the heart 

of the strategic formulation of the United States’ foreign policy. Underpinning this strategy 

was the notion that growth “provides the central basis for secure and stable countries, 

helping to strengthen the security of surrounding nations and the United States.”4

 In an 

article in Foreign Affairs, Carl Schramm, the Chief Executive Officer of The Kauffman 

Foundation, argues that the United States military does not have these skills to partake 

successfully in the realm of economic development. He asserts:

Post conflict economic reconstruction must become a core competence of the US 

military... It is imperative that the US military develops its competence in economics. 

It must establish a new field of inquiry that treats economic reconstruction as part 

of any successful three-legged strategy of invasion, stabilization or pacification, 

and economic reconstruction. Call this ‘expeditionary economics.’5

Whether or not expeditionary economics is a new field of inquiry is dependent on how 

one perceives the role of the United States military, from a historical perspective, in its’ 

role in nation-building. Engagement with economic activity has been an essential role of 

the military within, after, and contemporaneously with conflict, as was seen respectively 

with the Marshall Plan in Europe post World War II, the Balkans, and more recently in 

Afghanistan and Iraq. There is historical precedent for economic development to coexist 

as a mechanism to provide stability and security, but there has been little effort to provide 

a consistent approach to what the military’s role should be when approaching economic 

development. 

The recently produced National Security Strategy describes how the “Joint Force will 

redefine America’s military leadership by enabling whole-of-nation approaches to address 

national security challenges.”6 The strategy states, “Military power complements economic 

development, governance, and rule of law – the true bedrocks of counterterrorism efforts.”7

It continues to define a mutually sustaining relationship between defense, diplomacy, 

and development, by claiming, “We will support whole-of-nation deterrence approaches 

that blend economic, diplomatic, and military tools to influence adversary behavior.”8 

The whole-of-nation, or until recently termed whole-of-government approach, is viewed 

suspiciously by many within the United States military. Patterson and Stangler write, this 

“approach touted by the United States has usually meant an increase of bureaucracy as 

well as a focus on what can be measured: namely, the rate at which budgeted funds can 

be spent, irrespective of outcomes.”9 Furthermore, the military has undertaken the role of 

development under the backdrop of conflict, often referred to as opposed development: 

defined by the United State Institute for Peace as “development activities undertaken in the 

presence of an armed opposition.”10 
10

Expeditionary Economics as an Economic Concept

The majority of foreign aid is distributed through the means of government-togovernment transfers. The services that this money is intended for not only seeks to 

affect intangible ideas, such as good governance, and the rise of civil society, but more 

importantly, seeks to contribute to economic growth. Foust demonstrates the skepticism 

concerning the practice of transfers of money to aid economic growth

In practice... these money transfers tend to evade the reform of public services—

negating their purpose. Studies of government behavior in aid relationships indicate 

that, often, the leadership of both donor and recipient governments instead tend to 

seek policies that protect their hold on power.11 

Foust suggests that a way to alter the current modus operandi of developmental aid is 

to focus upon bottom-up, or community centered aid. Current models, focusing on topdown aid, support the host government and translate into intangible and ill-defined projects 

focusing on capacity building or major infrastructure projects. One such way of viewing 

the current developmental impetus is to categorize its focus on economic inputs as opposed 

to outputs. But a bottom-up approach can fall into the same trap; by continuing to measure 

success of community activity in terms of money spent over time devoted to a project, this 

approach misses a crucial element of considering areas such as the empowerment of civil 

society, and the needs of the non-politically aligned population. Ultimately, it is a truism to 

categorize the current thought on aid development, certainly in areas of the world in which 

there is a presence of United States forces, as being “driven by donor concerns and political 

arrangements in the recipient capital.”12

Working through established institutions, such as host nation governments, local and 

international based non-government organizations, is where the provision of services is 

offered, denies civic and formal institutions the ability to engage fully with economic 

development and entrepreneurship. Little effort is made to allow these fringe organizations, 

who are politically autonomous, to become an effective enabler to economic growth and 

developmental partners. Expeditionary economics fundamentally challenges the current 

thinking of aid and suggests that at the heart of economic growth is the entrepreneur and 

that the existence of this actor predicates economic growth, which in turns, translates into 

fulfilling the national security aims and outcomes and promotes the security agenda of 

American politics.

Expeditionary economics challenges traditional thought that growth stems form that 

capacity and the good governance of a political system, but that individuals and businesses 

within a society can generate the outputs necessary for economic growth and the fulfillment 

of United States foreign policy. Under the concept of expeditionary economics, localized 

business development and entrepreneurial incentivizing replaces the international 

community and the host nation governments. 

Carl Schramm loosely defines expeditionary economics as a new field of study that 

focuses on the delivery of assistance within a neatly defined threefold military strategy of 

invasion, stabilization, and economic reconstruction. He purports to the view that “The US 
11

military is well placed to play a leading role in bringing economic growth to devastated 

countries.”13 Carl Schramm is the President and CEO of the Ewing Marion Kauffman 

Foundation, a non-profit organization charged with pursuing the field of entrepreneurship. 

Schramm is perhaps the first to suggest the concept of expeditionary economics, and he 

has steered clear of in-depth attempts to formulize a doctrine for the military or a clear 

modus operandi for policy makers to incorporate this concept in to a meaningful method of 

delivering foreign policy aims. The Kauffman Foundation continues to explore this concept 

in conjunction with officers and academics aligned to the Department of Defense and a 

clear and unambiguous challenge has been given to the United States military in particular: 

The US military must therefore formulate a doctrine of expeditionary economics 

designed to spur solid growth as rapidly and effectively as possible. For this, it 

should draw on some of the more recent wisdom of the international development 

community -- a growing number of scholars are rejecting the decades-old doctrine 

of big plans and dictated reforms and turning instead to more modest yet more 

effective projects. Some military officers, in fact, have already been doing work 

along these lines. The military could then use the various means of influence at its 

disposal to steer international development practices in the direction of the new 

doctrine.14

What is interesting about Schramm’s gauntlet, thrown to the military, is the implicit 

notion that the United States military are in the position, or more accurately, should be in 

the position, to alter current development practices and to weave expeditionary economics 

into a new approach to the successful delivery of aid. Schramm is cynical in regards to the 

comprehensive approach in the post-invasion of Iraq; he cites an example of the United 

States Agency for International Development as bypassing local civilians in the quest to 

hire American contractors for development projects. Although the Coalition Provincial 

Authority in Iraq sought to promote free trade and the development of a market economy, 

current developmental practice precluded an approach that created jobs and companies – 

the basis of his economic understanding of entrepreneurship.

Other economic areas which have failed to promote entrepreneurship lie in the field of 

micro-finance, which although creating individual employment, fails to generate the type 

of high-growth economy that Schramm seeks, and in developing economics, Schramm 

dismisses the view that micro-finance, as well as venture capital, is effective in inducing and 

sustaining entrepreneurship. The need for a new approach to development is highlighted 

by Schramm’s dismissal of the Commander’s Emergency Response Program, used by 

Commanders in Iraq and Afghanistan to rapidly disperse funds to infrastructure projects, 

often to rebuild infrastructure damaged by coalition war fighting activity. Employment is 

created by the Commander’s Emergency Response Program, but at the neglect of longterm priorities, and creates a culture of dependency within the local populace.

Although it is difficult to discern what expeditionary economics ultimately calls for, 

it fundamentally rejects the notion that it is a blueprint for direct foreign investment by 

the United States. Ownership of businesses and the economic environment is implicitly 

tied to the local population, and although the presence of foreign direct investment and 
12

the positioning of multi-national corporations in host countries may provide an economic 

backdrop, it denies the chances of local businesses to exist by creating barriers to entry 

removing incentives for entrepreneurial activity. Schramm is also critical of previous 

attempts to boost the prospects of an economic recovery in areas of conflict by citing 

the example of Operation ADAM SMITH in Baghdad in 2004. CNN, reporting on this 

operation, highlight that that local Iraqis who actually participate in this operation were 

“within the embrace of US security and sell primarily to Americans,” not who “the US 

government have in mind when they talk about rebuilding the country ‘one business 

at a time.’”15 The concept of expeditionary economics not only eliminates the need for 

the formalization of economic planning, but implicitly preludes the use of top down 

authoritarian initiatives, instead relying upon the local communities to have the knowledge 

and expertise to promote economic growth through their own initiative rather than that of 

a foreign entity.

Unlike in Operation ADAM SMITH, the concept of expeditionary economics rejects 

the need to dictate the process of privatization and to dictate best practices. Expeditionary 

economics fundamentally seeks to create economic growth by removing the current 

developmental tools, which provide barriers to economic growth. Inherent in Schramm’s 

argument, is that current development models need to withdraw from the areas of aid in 

which support to business activity are delivered, and let the natural processes of economic 

growth occur, and focus development to those who conduct business, and support the 

entrepreneur.

It is equally important to understand what is implicitly missing from Schramm’s 

ideas surrounding the concept of expeditionary economics. Of note, is the lack of “details 

necessary to pragmatically integrate ‘expeditionary economics’ into a working doctrine 

relevant and useful to military leaders.”16 Thus, for the military to embrace the idea of 

expeditionary economics, not only has it to agree on the strategic and operational relevance 

of the concept, but also to identify the “specific conditions under which the military might 

conduct ‘expeditionary economics’ and the specific objectives toward which the military 

applies the use of ‘expeditionary economics.’”17 The military face many challenges in both 

understanding of the concept and integrating the principles to the operational environment. 

If the United States military are to embrace Schramm’s ideas, then doctrinal integration at 

the strategic, operational, and tactic level will be fundamental to the success of applying 

this development model. 

The Military as an Expeditionary Economic Actor – a Path to Victory?

If the United States military is to take the lead during conflict for the imposition of 

expeditionary economics, as Schramm indicates, the question that should first be asked, 

is whether the military is the right actor to fulfill these developmental objectives? The 

evidence from recent stability operations point to the fact the United States military is 

already engaged in development and thus further questions must arise as to how to better 

use and adjust the current military practices?

In the post-Cold War environment, humanitarian, security, and peacekeeping 

operations became more prevalent, and the geographical footprint of the United States 
13

military expanded. A debate as to whether the military’s involvement in operations other 

than war were a distraction to their main role of full combat operations, was ongoing 

when the events of 9/11 altered the parameters of the argument. Threats from unstable and 

weak states were directly addressed in the 2002 National Security Strategy. The strategy 

called upon the need for development to work side by side with diplomacy and defense to 

achieve the nation’s security aims. The counterinsurgencies in Iraq and Afghanistan that 

followed the events of 9/11 created the operational tool of the Commander’s Emergency 

Response Program (CERP) and Provincial Reconstruction Teams (PRTs). As Johnson, 

Ramachandran and Walz acknowledge:

The US Military responded diligently, incorporating the use of seized Iraqi funds to 

create a program that was designed to fund projects that would help stabilize military units’ 

operating. This program evolved into the Commander’s Emergency Response Program, 

which was formally initiated in late 2003, utilizing US appropriated funds, for both Iraq 

and Afghanistan. Units consisting of both civilian and military officials termed Provincial 

Reconstructions Teams (PRTs) were established in Afghanistan and later in Iraq, designed 

to enhance inter-agency cooperation, improve stability, and build capacity by working 

closely with local officials.18

Stability Operations subsequently became recognized as being a core mission for 

the United States Military, incorporating the need to provide security, to restore essential 

services, and to meet the humanitarian needs of the local populace, whilst fostering the 

long term development of indigenous capacity, promoting a viable market economy, 

democratic institutions, and the rule of law. “In short, in a span of just over 15 years, the 

US Military significantly altered its operational framework, increasing its responsibilities 

and requirements in an effort to improve stability where it is employed and engaged.”19

The Commander’s Emergency Response Program – Funding and 

Entrepreneurship

The use of financial aid in current operations in Afghanistan is realized in CERPs, 

which are a discretionary pool of money that the commanders on the ground can use in 

order to fund projects that improve the security environment in their area of operations. 

Security gains are paramount when commanders assess potential projects to inject capital, 

yet the assumption that security and economic growth are mutually reinforcing suggest 

that CERPs have a continued role in providing economic development within Afghanistan. 

Patterson and Robinson give an example of the usage of CERPS: 

During the invasion of Iraq, US forces seized approximately $900 million from various 

locations across Iraq. In a brilliant military innovation in the aftermath of the invasion, 

many of the US military’s first reconstruction projects used these seized funds in what 

was the genesis of the Commander’s Emergency Response Program. The initial success 

of CERP was in large part due to its flexibility and responsiveness to the unique situations 

commanders faced on the ground. Over time, CERP has been increasingly burdened by 

process (the new standard operating procedure is 165 pages), degrading some of its early 

benefits. Its usage also expanded from smaller scale projects that could be effectively 

overseen by the military to larger scale development efforts that outstripped the military’s 

oversight ability.20
14

 In Iraq, the practice of using CERPs has expanded, and by 2010, the program received 

nearly four billion dollars in appropriations, and had become a fundamental tenant of 

counterinsurgency campaigns.21 The ability to choose projects with CERP funding that 

fosters long-term economic growth is challenging, and a gap exists within the military 

in terms of expertise—creating problems with implementation and project oversight. 

The projects too, had to be aligned with the COIN objectives in the commander’s area 

of operations. With increased understanding, fueled by experience, CERP has evolved to 

meet not only the emergency and security needs, but to encapsulate spending on water 

and sanitation infrastructure, food production and distribution, agriculture, electrical power 

generation and distribution, health care, education, telecommunications infrastructure, 

transportation infrastructure, rule of law and governance improvements, irrigation, civic 

cleanup activities, repair and construction of civic and cultural facilities, as well as 

incentivizing entrepreneurship and small businesses formation.22

Crucially, a centrally managed process has not brought about obvious success to within 

the delivery of aid through CERPs’. Rather, commanders on the ground have used their 

judgment to determine which projects are likely to aid security, and in turn, harness the 

potential for the entrepreneurial economic progress that Schramm posits in his quest to 

have the United States military embrace expeditionary economics. The evidence from 

CERPs suggests that there is not the entrepreneurial vacuum that Schramm postulates.

Schramm’s ideology has an important role to play when assessing CERPs, and 

his insight gives those commanders who are involved with CERPs the opportunity to 

reevaluate the long-term implications of the projects that are identified. Schramm’s view 

of expeditionary economics is a useful conceptual tool to impose upon commanders when 

aspiring to make the programs as effective as possible. His theory also correctly asserts 

that the role of the military in economic development should not be limited to the current 

fight, and the current CERP model has inherent internal flexibility to be used in future 

conflict. As Johnson, Ramachandran, Walz, rightly assert, “The US Military is already 

substantially engaged in the development realm beyond stability efforts, and it is likely that 

the military will continue conducting development-like projects in parts of Afghanistan, 

the Philippines, and in other areas of the globe, for years to come.” 23 The discussion of 

whether the United States military is involved in development is not disputed, and the 

examination of how to make this involvement as effective as possible is inherent within the 

debate surrounding expeditionary economics.

The Center for Army Lessons Learned in the United States have gathered a 

comprehensive set of data on CERPs and advises upon what works and what is likely to fail 

in the provision of security and economic development. A thorough evaluation of the data 

is needed, with statistical quantitative analysis brought into the economic development 

realm. Until this effort is achieved, and further research carried out, it will be difficult to 

draw tangible lessons from Iraq and Afghanistan, and subsequently apply them to future 

conflict areas where CERP is administered.
15

Opposed Development

Whilst we have asserted that the United States military already practice expeditionary 

economics to some degree in Afghanistan and Iraq, other scholars have coined the current 

approach by the military in engaging with economic development, as that of opposed 

development. Kilcullen is a leading counterinsurgency expert and served as Senior COIN 

Advisor to General David Petraeus, Commanding General, Multi-National Force, Iraq. 

Kilcullen coined opposed development as the scenario that faces coalition forces in Iraq 

and Afghanistan.24 Opposed development incorporates an operational environment where 

not only is there an active presence of terrorist actors, but these actors compete for our 

own development programs, thus offering the target population a choice between the 

development procedures and objectives as the coalition effort, and those offered by the 

insurgents.

Kilcullen’s theory of opposed development is relevant to the debate over expeditionary 

economics for the principle reason that it challenges the notion that development and stability 

work in harmony. This challenge, in turn, questions the philosophical underpinnings of 

CERPs and the current modus operandi of the United States military in Afghanistan and 

Iraq. His arguments resonant with the logic of General Rupert Smith who argues:

There is no such thing as impartial governance or humanitarian or humanitarian 

assistance. In this environment, every time you help someone, you hurt someone 

else.25

Smith accurately pinpoints the problematic nature of development in the midst of an 

insurgency. Development, especially in the form that CERPs currently practice, creates 

winners as well as losers, which has the potential to fuel destabilization. 

If development is to be successful, then the practitioners, no matter which theory 

provides the fundamental philosophical basis of their development model, must realize 

that the actions, be it of non-government organizations, government development workers, 

or militaries, exist as a direct challenge to the grass-roots control of the local population, 

and their efforts will necessarily react with the ensuing violence. Regardless of the 

cognitive backdrop to any development activity, there is a complex interaction between 

the political characteristics of the insurgents’ movement, the population, the local and 

national governance, the counterinsurgent, and all other external actors, which drive the 

characteristics of a particular counterinsurgency campaign. 

There is a fundamental difference between conducting counterinsurgency operations 

in a hostile or occupied foreign country, and conducting counterinsurgency operations in 

a territory one seeks to control. Kilcullen describes counterinsurgency operations as “an 

armed variant of domestic politics in which numerous challengers compete for control 

over the population.”26 Galula seeks to codify the military’s role in counterinsurgency by 

asserting that essentially, “A revolutionary war is 20 per cent military action and 80 per 

cent political”27, thus placing military action as secondary to political action, and relegating 

the military’s role as primarily being within the realm of affording the political power 

enough freedom to work safely with the population. Galula expounds on this idea by 
16

arguing that in giving the soldier authority over the civilian, would contradict one of the 

major characteristics of this type of war. In practice, it would inevitably tend to reverse 

the relative importance of military versus political action and move the counterinsurgent’s 

warfare closer to a conventional one. Were the armed forces the instrument of a party 

and their leaders high-ranking members of the party, controlled and assisted by political 

commissars having their own direct channel to the party’s central direction, then giving 

complete authority to the military might work; however, this describes the general situation 

of the insurgent, not of his opponent. 28

Kilcullen notes that in 2006, United States spending in Iraq for the year 2003 to 2006, 

accorded to 1.4 percent civilian, and 98.6 percent military.29 This seems out of kilter 

with the fundamental tenants of counterinsurgency warfare as laid out by David Galula. 

Although much of the military spending in Iraq was, and continues to be, directed at 

political programs and military operations supporting political objectives, thus distorting 

the statistic, 1.4 percent spending on civilian programs is an alarming figure, no matter how 

one interprets the data or Galula’s ratio for the successful prosecution of counterinsurgency 

warfare.

Furthermore, if the fundamental requirements for a successful counterinsurgency 

campaign, as identified by United States Field Manual 3-24, is that of control, then the 

current development practices of the United States military, in its’ use of CERPs, engages 

in a much wider set of objectives that it seeks to influence; CERPs are currently used to 

legitimize some of the US military’s actions, and are also designed to create local population 

good will as well as development assistance.

The multiple objectives for CERPs underline the cognitive tension that exists between 

stability and development. This tension is embodied by the relationship between United 

States Agency for International Development and the United States military, and described 

by Johnson et al, as a continuum of activities.

Figure 1: The Stabilization-Development Continuum.30

Source: Author.

The continuum identifies that there is no clear delineation between stability and 

development activity and as a result, the activity of the United States Agency for 

International Development and the United States military operate concurrent of time, 

space, and purpose. 

Another way of understanding this cognitive tension is by describing the tension 

that exists between visibility and viability, as suggested by Andrew Natsios, a former 

administrator of United States Agency for International Development.31 Natsios suggests 
17

that visible development projects, such as road construction and food aid, identified as 

being direct from the United States government, aid the process of legitimization, and are 

designed to win the hearts and minds of the local population. These projects are easily 

identifiable by the insurgents, and as such, the local population will become inevitable 

targets. Development aid projects that are not visible to the local population, de facto

the insurgents, blend into the local economy, and the identification of the intended and 

realized recipient becomes difficult. The invisibility of aid tackles General Rupert Smith’s 

aforementioned dilemma of every time you help someone you hurt someone else.

The continuum does not seek to resolve this cognitive tension between development 

and stabilization; rather, it seeks to make practitioners aware of the challenges that CERPs 

and other development projects face in a counterinsurgency environment, in which control 

is the underlying principle. The challenges presented by this cognitive tension run through 

the heart of Galula’s definition of victory in counterinsurgency:

A victory is not [just] the destruction in a given area of the insurgent’s forces 

and his political organization... A victory is that plus the permanent isolation of 

the insurgent from the population, isolation not enforced upon the population but 

maintained by and with the population.32

Operationalize or Decouple? Other Actors in Expeditionary Economics

Some of the major doubts about the concept of expeditionary economics occur in 

the realm of the practical realities of operationalization. Whether or not the United States 

military should expand upon its’ current role within Afghanistan and Iraq, to incorporate 

Schramm’s ideas, and harness its capabilities to include taking on the role of developing 

economies as a central part of their activities, lies at the heart of the debate over expeditionary 

economics.

The 2011 National Military Strategy affirms, “Our military power is most effective 

when employed in support and in concert with other elements of power as part of wholeof-nation approaches to foreign policy.”33 The Chairman of the Joint Chiefs of Staff 

emphasizes in the document that whilst there is continual refinement of how we counter 

violent extremism and deter aggression, the is emphases on military power as most 

effectively employed when in concert with other elements of national power. Reinforcing 

a whole-of-nation approach to foreign policy, the strategy cites that civilian leadership is 

appropriately at the helm, as is fundamental to addressing the complex characteristics of 

the security challenges faced. 

The National Security Strategy was updated in 2011 for the first time in seven years. The 

whole-of-nation approach is designed as a broad strategy, which not only includes security 

forces to counter specified and non-specified security challenges, but also incorporates the 

diplomatic and development communities too. In a sweeping rebuke of the employment of 

United States Agency for International Development, Kori Schake argues:

The military is the only part of the ‘whole-of-government operations’ that is doing 

its job well... When the country has Soldiers, sailors, airmen, and Marines in 
18

harm’s way, the nonmilitary agencies have an ethical responsibility as well as a 

practical need to get good at their jobs, and fast.34

For Schake, the civilian arms of our government must engage with the world as they 

are central to the successful delivery of the tasks American national security policy outlines. 

Rather than encapsulating the United States military into conducting tasks that are in the 

realm of the United States Agency for International Development, civilian agencies should 

realize their capacity and engage with the challenges of the current security environment 

instead of leaving the military to do what is essentially the responsibility of civilian 

agencies. In essence, Schake argues that instead of making the United States military the 

United States Agency for International Development, civilian agencies should become 

good at they are designed to do.

Schake’s argument does not imply that the military should take on more responsibility 

because of its successes. Rather, the whole-of-nation approach, as identified in the 2011 

National Security Strategy, should be reinforced at the operational level. The problem 

with Schake’s stance, is that explicit within the argument, is the assertion that “Economic 

development is not the work of the Department of Defense.”35 This disregards the cognitive 

tension that exists between stabilization and development, and implies that the two 

conceptual realms are mutually exclusive, rather than mutually reinforcing, as has been 

shown through Johnson, Ramachandran, and Walz’s continuum. Furthermore, it is equally 

problematic to assess that the Department of Defense’s current practices that engage 

with economic development occur as a direct result of nonmilitary agencies, in particular 

United States Agency for International Development, having failed to “deliver on their 

responsibilities of creating a foundation for economic prosperity.”36

Nevertheless, Schake invokes the right question: should the United States military 

be the agents to deliver Schramm’s concept of expeditionary economics. If economic 

development is an aid to victory in a counterinsurgency, then military participation, 

heightened understanding of the principles governing economic aid, and an acute awareness 

of what contextually works and what does not, is fundamental to success. However, this does 

not necessarily imply a lead role for the military. If Schramm is correct in his assertion that 

the “US military planners and US troops on the ground often turn to US and international 

development agencies or nongovernmental organizations (NGOs) for practical guidance 

on improving local economic conditions only to find that the putative experts are little 

help,”37 then perhaps what is being identified, is the cognitive tension between stabilization 

and development, rather than a call to arms for the military to autonomously conduct 

development.

Schalke is right to question Schramm’s notion that:

it is not enough merely to restore the economy to a level resembling the pre-crisis 

status quo. The economy is part of the problem.38

The implication of Schramm comments here suggest that the military should engage 

in development tasks long after the security environment is stable. Heightened military 

engagement in economic development could, however, led to what Kilcullen describes 

as the kiss-of-death scenario. This scenario depicts the military surging into areas and 
19

introducing civil programs, which, in turn, exposes moderates and cooperative leaders to 

insurgents. As security improves, the military reduce their presence, and consequently, the 

insurgents kill those who cooperated with the initial military surge.39

The use of existing power structures in Iraq and Afghanistan, combined with other 

government agencies are more likely to avoid the kiss-of-death scenario. In Iraq, evidence 

suggests that the Sheik’s proactive stance discourages Sunni insurgent activity, and in 

Afghanistan, warlords are also in a position to prevent Taliban incursions.40 This suggests 

that there may be better-suited actors than the military to set the conditions for both 

stabilization and development; it does not purport to Schramm’s notion that the military 

are the key players to set these conditions.

Schramm goes much further than suggesting that the military should be the prime actor 

in the stabilization and development continuum. Schramm states:

The US military must therefore formulate a doctrine of expeditionary economics 

designed to spur solid growth as rapidly and effectively as possible. For this, it should 

draw on some of the more recent wisdom of the international development community—a 

growing number of scholars are rejecting the decades-old doctrine of big plans and dictated 

reforms and turning instead to more modest, yet more effective projects. Some military 

officers, in fact, have already been doing work along these lines. The military could then use 

the various means of influence at its disposal to steer international development practices in 

the direction of the new doctrine.41

The notion that the military will be in a position to demonstrate both practice and 

procedures, to not only the development community and nongovernmental organizations, 

but to agencies such as the World Bank and the IMF, is stretching to the limit, the realms of 

operational and conceptual possibilities It also places an unnecessary burden on the United 

states military, whom possess limited technical, strategic, or operational experience, and 

renders non military organizations as periphery and unimportant to the current operational 

environment. This would further challenge the assertion that the whole of nation approach 

in the newly updated National Security Strategy is out of kilter with how the operational 

environment in counterinsurgency should be orchestrated. 

 The military should not be seen in isolation within the whole-of-nation approach. 

Neither should the military be ignorant to other government agencies and nongovernmental 

organization’s capability and capacity to serve as the mechanism for coordinating “unique 

departmental activities, correcting for the current militarization of activity in theaters of 

military operations.”42

Blurring the Civil-Military Divide

There has been criticism of the United States strategy in Afghanistan that points to the 

heart of the debate surrounding the militarization of aid. Following the initial intervention 

in Afghanistan in 2001, stabilization and development objectives were arguably sidelined in 

favor of pursuing Islamic terrorists.43 If indeed, the “consequent lack of success in developing 

a functional and effective Afghan government, and in promoting development, especially 

in rural areas, has... contributed to the deterioration in security conditions,” then it follows 
20

that Schramm’s emphasis in using the military as the solution to the counterinsurgency 

fails to match the opinion that military solutions alone are unable to create long term 

economic development and stabilization in Afghanistan. There is little agreement about 

how and whom the actors involved should orchestrate operations in Afghanistan, yet the 

international focus has tended to lean heavily on the military capabilities, or perceived 

capabilities, at the expense of other worthy actors. The existence of community defense 

initiatives, and the expansions of PRTs, suggests that there is a creeping militarization of 

aid. An Oxfam report highlights that overall United States spending on current military 

operations in Afghanistan is twenty times that of spending on development; the US military 

currently spends $35 billion a year, nearly $100 million a day, whilst spending for USAID 

is $1.6 billion a year, $4.4 million a day.44

Further opposing Schramm’s view on the military as the prime conductors of 

expeditionary economics is the evidence from Afghanistan’s recent checkered past, where 

foreign militaries have yielded only short-term security advances and have failed in the 

quest for long term stability. A truly comprehensive strategy, or to use the National Security 

Strategy parlance, whole of nation approach, to the long-term development and security of 

the current counterinsurgency fight in Afghanistan, is surely the right approach to enable 

the stabilization and development continuum to permeate all activities by coalition nations 

operating in Afghanistan.

This view reinforces ISAF’s approach to acknowledging the inherent limitations to the 

suitability and legitimacy of their prosecution of operations in Afghanistan. The military’s 

prime focus should be on providing security; civilian actors should, in partnership with 

security operations, focus on the implementation and long-term ownership of reconstruction, 

development and humanitarian challenges that are mutually reinforcing to the stabilization 

of the country. There exists the further complexity of regional stability that both directly 

and indirectly affects the strategy in Afghanistan. 

Just as military and civilian tensions exist in Afghanistan, so too is the tension in 

Pakistan. As Auil Shah argues that although Pakistan is unlikely to collapse, the imbalance 

of power between its civilian and military branches must be addressed if it is to fulfill 

security demands and become a normal functioning modern state that is able to effectively 

governing its territory. “For its part, the United States must resist using the generals as 

shortcuts to stability, demonstrate patience with Pakistan’s civilian authorities, and help 

them consolidate their hold on power.”45

This does not negate the need for reform, and further suggests that much of Schramm’s 

philosophy should be embraced within the civilian organizational realm. Nongovernmental 

organizations and other government agencies must enhance the effectiveness of aid, thereby 

diminishing the dependency effect. They must also allow for governance reform that both 

supports the stabilization and development continuum, and achieves Afghan accountability 

and transparency at all levels. In sum, policy-makers must recognize the lack of clarity and 

coherence in the existing international approach to Afghanistan, especially in the pursuit 

of critical development, governance and stabilization objectives. “In order to succeed, 

a comprehensive strategy urgently requires a substantial, coordinated and long-term 

international commitment, both in terms of resources and political will.”46
21

Civil Military Synchronization

There are guidelines for civilian and military agency interaction endorsed by the 

Commander of ISAF and the United Nations. Waldman et al cite that these guidelines 

maintain, “A clear distinction between the role and function of humanitarian actors from 

that of the military [which] is a determining factor in creating an operating environment in 

which humanitarian organizations can discharge their responsibilities both effectively and 

safely.”47 Due in part to the frustrations of the military over progress that nongovernmental 

organizations and other government agencies are making in counterinsurgency environments, 

a blurring of the military civilian relationship has occurred. These frustrations, felt on 

behalf of the military, may explain to a certain degree, the militarization of aid that is 

contained within Schramm’s concept of expeditionary economics. 

The frustration is not just borne by actors in the military community; in the 

nongovernmental organizations and other government agencies, there is a suspicion of the 

relevancy and effectiveness of military progress within Afghanistan. One such “egregious 

example of military forces acting contrary to the Civil-Military Guidelines is the use by 

military personnel of certain contingents, apparently including the US, France and Spain, 

of unmarked, white vehicles, conventionally used by humanitarian organizations.”48These 

actions breach the guidelines of civil military activity as well as a potentially more serious 

breach of international humanitarian law, which demand that combatants must distinguish 

themselves from civilians in conflict. These accusations underline the friction between the 

military and their civilian partners.

If this friction is to lead to the military taking on the prime responsibility to deliver 

economic developmental aid in the current counterinsurgency environment, the operational 

reach of nongovernmental organizations and other government agencies will diminish, 

and attempts to implement the direction of the National Security Strategy will falter. 

Furthermore, ISAF’s current understanding of the shared responsibility for delivering 

stabilization and development in partnership with nongovernmental organizations and 

other government agencies should become more transparent if other actors outside of the 

military were more, rather than less, involved in an integrated approach to operations that 

seek to deliver the framework of expeditionary economics.

Identifying Success – Comprehensive Economic Development 

Expeditionary economics’ call for harnessing an entrepreneurial environment lacks 

an accompanying practical implementation model, but addresses some of the military 

failures of operational conduct over the previous ten years of conflict. One example of this 

is identified by Riegg, who states that in Iraq: 

The Army not only put $10.8 billion into infrastructure, and only a pittance toward 

entrepreneurial stimulation, it also gave everything to the Iraqi government (or to illstructured local cooperatives) at no cost and with no conditions attached. Such largesse 

simply breeds contempt. It conveys the impression that the United States owes Iraq 

restitution for the invasion and undermines the message that countries that act the way 

Iraq acted under Saddam Hussein will suffer the consequences. Also, by simply giving 

everything away, we missed a great opportunity to help Iraq develop a more powerful 

private, entrepreneurial sector within its economy.49
22

Conditionality attached to aid has been practiced by the development community for 

many years and is enshrined within the Washington Consensus approach to developmental 

assistance. 

Giving away aid, with little accountability of conditions attached, circumnavigates 

potential opportunities to strengthen local economic environments. The Provincial 

Reconstruction Teams are not immune from criticism in this regard, even with the imbedded 

civilian actors that are currently employed. Provincial Reconstruction Teams have employed 

a method in Iraq of asking village and community leaders what infrastructure they need to 

improve economic conditions:

The Army or USAID then goes in, builds what is needed, and simply turns it over 

to the local community, free of charge. If instead we insisted that the community 

pay for some or all of these projects, we might get more respect and more active 

participation by the community in them.50

These program have the capability of stimulating the development of municipal 

bonds and bond markets, allows for charging adequate user fees, properly maintains new 

infrastructure, facilitates more efficient, cost-effective approaches to construction, and 

critically, uses local talent and resources.

Capital dispersed through Provincial Reconstruction Teams may undermine the local 

economy’s ability to provide such goods and services and undercut the natural efficient 

markets that Schramm is so keen to foster. These projects may serve to also build upon the 

culture of dependency and entitlement, undermine the work ethic, and build the illusion 

that the Afghan government will be in a situation to continue to provide many services 

which expeditionary economics would rather encourage through pure entrepreneurial 

capitalism, that feeds back to the government through taxation, and provides revenue for 

the host country to provide essential public provision.

In addressing the debate surrounding the activity of Provincial Reconstruction Teams, 

eight non-governmental organizations, currently working in Afghanistan (and have been 

for up to fifty years) have written a report highlighting the dangers of the militarization of 

aid.51 The report goes further than Riegg in criticizing Provincial Reconstruction Teams, 

and calls for their complete, though gradual, removal from theater. The report states that, 

Military-dominated institutions, such as Provincial Reconstruction Teams, often:

lack the capacity to manage effective development initiatives, even where civilians 

are inserted into these structures. They are unable to achieve the level of local trust, 

engagement and community ownership required to achieve positive and lasting 

improvements to Afghan lives. 

In so many cases, Provincial Reconstruction Teams in insecure environments rely on 

local contracting companies who have limited capacities, and weak links to communities. 

They are often wasteful, ineffective and corrupt. 

Inherent within the report is the suggestion that the military approach to aid in 

Afghanistan focuses directly on winning the loyalty of the local populace rather than 

incorporating the alleviation of poverty and other humanitarian focuses. The report cites a 
23

United States army manual for troops in Afghanistan and Iraq, to highlight the military’s 

definition of aid as a nonlethal weapon that is utilized to “win the hearts and minds of the 

indigenous population to facilitate defeating the insurgents.”52 Criticisms of the current 

military approach are levied at the unintended consequences for governance reform and the 

validity and sustainability of Afghan institutions. “In assuming some of the responsibilities 

that the Afghan government should be fulfilling, PRTs may weaken government 

accountability to the Afghan people.”53 Perhaps the most damming conclusion of the 

report, is the assessment that “There is also increasing evidence that military involvement 

in development activities may be putting Afghans on the frontlines of the conflict.”54 The 

British and Irish Afghanistan Group (BAAG) that monitor activity in Afghanistan endorse 

this view. 55

As a sweeping rebuff to the suggestion by Schramm that expeditionary economics 

should be seized by the military as a tool to provide economic development, the BAAG 

recommends the phasing out of Provincial Reconstruction Teams whilst simultaneously 

increasing the capacity and funding of civilian organizations and increasing the footprint 

on the ground. Furthermore, the coordinating authority for economic development is 

suggested as being most beneficial under the auspices of the United Nations.

The opposition to the militarization of aid comes not only from the development 

community, who stand much to lose if the path to increased military power over 

developmental aid is affected, but also from the United Nations. The Special Representative 

of the Secretary-General, Kai Eide, asserts that the international community needs to 

demilitarize their overall approach in Afghanistan if it is to reverse the current trend of 

unsuccessful economic developmental aid.56 Speaking to journalists in Kabul, Eide said: 

“We have to get into a mode where our strategy is politically driven and not militarily 

driven, where the political and civilian components become an appendix to a military 

strategy,” Eide is skeptical of the increase in military forces in Afghanistan, especially 

where military forces engage in the political, civilian and humanitarian realms:

When you have an increased number of troops coming in, there will always be a trend 

for those forces to demonstrate quick results and take upon themselves political 

tasks. That leads to quick impact... quick impact very often becomes quick 

collapse.57

Eide’s concern regarding the military engaging in the political, civilian, and humanitarian 

realm, are explicitly addressed in the new Field Manual 3.0 (FM 3.0), Operations. This 

Field Manual presents the United States military’s overarching doctrinal guidance and 

direction for conducting operations. FM 3.0 states: 

The foundations for Army operations are contained in its operational concept—

full spectrum operations. The goal of full spectrum operations is to apply land 

power as part of unified action to defeat the enemy on land and establish conditions 

that achieve the joint force commander’s end state. The complexity of today’s 

operational environments requires commanders to combine offensive, defensive, 

and stability or civil support tasks to reach this goal. Commanders direct the 

application of full spectrum operations to seize, retain, and exploit the initiative 

and achieve decisive results.58
24

Within the area of stability or civil support tasks, the engagement in the political, 

civilian, and humanitarian realm is both necessary and prescribed.

Figure 2. Stability Tasks and Department of State Technical Sectors

Source: Author.

Figure 2, from FM 3.0, demonstrates that the core army stability tasks are linked to 

that of the Department of State’s post-conflict reconstruction and stabilization technical 

sectors, security, justice and reconciliation, humanitarian assistance and social well-being, 

governance and participation, and economic stabilization and infrastructure:

Normally, Army forces act to support host-nation and other civilian agencies. 

However, when the host nation cannot provide basic government functions, Army 

forces may be required to do so directly.59

Full spectrum operations conducted by the United States military in accordance 

with FM 3.0 require continuous, simultaneous combinations of offensive, defensive, and 

stability (for operations outside of the United States) or civil support tasks (for operations 

inside the United States). The practice of the simultaneous combination of offensive, 

defensive and stability elements require military officers to work within the political, 

civilian, and humanitarian realm. United States military officials must put aside the Special 

Representative of the United Nations Secretary-General’s criticism of their approach 

during this current insurgency, if they are to follow the tenants of FM 3.0. 

This continual tension that remains between the military planners and those in civilian 

authority are charged by the National Security Strategy to practice a comprehensive 

approach to operations, and any debate that calls for more civilian input, or more military 

input, into the realm of economic developmental aid, too often miss the central and 

partnered ground that a comprehensive approach offers. 

In forming a comprehensive approach to the implementation of expeditionary 

economics, the military, nongovernmental organizations, and other government agencies, 

may partner to determine priorities for a free market system that operates conceptually 
25

within a counterinsurgency environment. How much integration is needed will depend upon 

at what stage of the campaign the current environment dictates; yet within the framework 

of full spectrum operations, simultaneous comprehensive effort is always required.

Figure 3. Example of combining the elements of full spectrum operations in a notional campaign.60

Source: Author.

As figure 3 depicts, from a purely military stance, conducting a notional full spectrum 

operation that involves more than just simultaneous execution of all its elements. In 

addition, it requires commanders and staffs to consider their own particular capabilities and 

capacities relative to each element. This is true of all nongovernmental organizations and 

other government agencies involved across the stabilization and development continuum, 

and not just for the military. 

Conditions are fluid in any counterinsurgency campaign, and actors at all levels should 

consider the concurrent conduct of each element. As is shown in figure 3, the offensive, 

defensive and stability (or civil support) combinations are weighted differently across the 

phases of a campaign. The phases in the notional example will necessarily be tailored 

differently for every unique scenario, and it is in the application of operational art in 

full spectrum operations that determines when, and if, simultaneous combinations are 

appropriate and feasible. 

Incorporating stability operations into full spectrum operations in a counterinsurgency 

environment needs the United States military to embrace the comprehensive approach and 

seek the expertise of nongovernmental organizations and other government agencies whose 

partnership will be the enabler for success. One example of how the army can use these 

other elements of national power is in the understanding of the operational environment 

and how to best administer economic developmental aid to facilitate stabilization within 

full spectrum operations. A thorough conceptual understanding of this theory will lead to a 

hesitation to identify specific doctrinal solutions to a given counterinsurgency environment. 
26

For example, the economic aid that is necessary in Iraq, differ greatly from that of 

Afghanistan. The degree of free market economic principles that can allow for fulfilling 

the maximum potential of rational economic actors need different forms of governance in 

order to address different host country challenges. 

 One such example is the foreign exchange position of Afghanistan, which differs 

from Iraq; export industry is nonexistence in the former, save for the illegal opium and 

poppy market. To industrialize an economy, the host nation has to reform its economic 

structure and develop an export-orientated market that is labor intense, and focused on 

manufacturing. Entrepreneurial private sector expansion may be needed more in Afghanistan 

than is the case in Iraq, where economic structures already focus on export led growth. 

Conversely, the government in Afghanistan may have to employ more Keynesian style 

economic principles to facilitate growth, and develop state owned enterprises, especially 

as there is no current significant tax income for the government, or residual accumulated 

wealth. Although Afghanistan necessarily relies upon the private sector and entrepreneurial 

expeditionary economics that lead to prosperity, Afghan government led control will also 

facilitate meaningful economic development. 

Riegg accurately portrays the situation by drawing attention to the interrelationship of 

development and security:

Whether Afghanistan will be able to follow an entrepreneurial path to development 

will depend on a couple of noneconomic factors, as well as the usual needs of good 

property and commercial law, functioning labor markets, a stable currency, and so 

on. In particular, society, its tribes and clans, will have to end their fighting and 

establish real peace and adequate security. Society will also have to embrace factory 

culture, probably including the legitimacy of young, unmarried women working in 

factories where occasionally male supervisors might check on the quality of their 

work. The alternative may be to develop and rely on women supervisors, possibly 

brought from other cultures where they are permitted to interact with men. If these 

societal issues can be worked out, Afghanistan will still have to compete with 

other countries to attract investment capital. Investors will need a reason to choose 

Afghanistan versus, for example, Kenya, Nicaragua, or Bangladesh.61

Conclusion

Reigning in an Isolated Concept

A full-scale push to implement expeditionary economics, not just by the military, but 

also by nongovernmental organizations and other government agencies, will limit the 

type of Keynesian response to governing the economic backdrop that long-term growth 

demands. Far from a rejecting the conceptual premise of expeditionary economics, there 

is a realization that weaknesses arise in both the conceptual realm and the practical reality 

of the entrepreneurial model as the driver for developmental change in counterinsurgency 

operations. These weaknesses occur in time, space, and thought. Entrepreneurial firms, 

many of whom fail, need a great amount of time in order for large-scale production to 

develop and tangible influence on the wider economy is realized; time creates a vacuum, 
27

with little external control to prevent unethical and unproductive economic governance of 

the economic environment, and an opportunity for the insurgent to dominate. This lack of 

governance, if remained unchecked, will increase the monopolization of firms in the market 

place, and drive barriers to entry, which dampens subsequent entrepreneurial activity, and 

weakens the competitive market.

The successes in Iraq to build an entrepreneurial economy, led to the privatization of 

many state-owned enterprises. This effort combined with building infrastructure, has not 

seen many positive signs of rousing an entrepreneurial revolution. Notwithstanding the 

obvious limitation to successful entrepreneurial developmental aid within the midst of an 

insurgency, far too much developmental aid has been given away unattached to any form 

of conditionality. This has created a degree of dependency and dampened the conditions for 

a successful entrepreneurial economy to flourish. 

So too in Afghanistan, where there are seldom links between good governance 

and economic developmental aid; consequentially, this has inhibited the capacity and 

capability for the entrepreneurial environment. Unquestionably, Iraq and Afghanistan, and 

many other counties too, would benefit from adopting more entrepreneurial approaches to 

development, and the effects of neglecting this necessary approach to developmental aid 

permeates not only in the economic realm, but also into the political and social environment. 

An exclusive concentration on entrepreneurial expeditionary economics as a concept, and 

the rate of entrepreneurial growth as a judgment of success, has a most damaging effect. 

Entrepreneurial expeditionary economic growth offers the opportunity to improve people’s 

lives in a counterinsurgency environment, but single-minded emphasis on developmental 

aid from the United States military has limitations that need clear understanding.62

In seeking an answer to whether the military is the right actor to deliver the policy of 

entrepreneurship in a post-conflict environment, this work acknowledges the benefits of 

expeditionary economics in a post-conflict environment, but raises concerns over whether 

the military should be the actor to deliver this policy. If a whole-of-nation strategy is to 

be realized, then other government agencies must become serious about employing their 

expertise and resources to complement the military. The development community posses 

the necessary intellectual and authoritative capability to engage upon expeditionary 

economics, but must avoid giving the military reason to doubt this capacity. In addition, 

both military and civilian actors must not seek to blur the distinction between military 

and civilian roles. Although complex counterinsurgency environments will challenge the 

ability to impart a military-civilian divide, expeditionary economics is a concept that can 

help to ensure the appropriation of agencies that allows for the military to do less than they 

imagine they can do, and for the development community to do more than they fear. 

In trying to build a bottom-up approach to spurring economic growth, expeditionary 

economics (regardless of whom the actor) must avoid a fundamental approach through 

top-down implementation. Cognizant of a top-down approach to governance and security 

reforms such as building military capacity, judicial systems, and police forces in Iraq 

and Afghanistan, the approach to expeditionary economics must invert current capacity 

building thought to encapsulate the bottom-up approach to effect entrepreneurial activity 

and capacity.
28

Furthermore, the absence of specific literature that affirms the success of implementing 

the broad themes of expeditionary economics within a post-conflict or counterinsurgency 

environment, should provide the United States military with the good judgment to be 

cautious about embracing an unknown, in a field they are, as yet, ill-equipped to encounter. 

In sum, the question of whether expeditionary economics is the right task remains 

unanswered, amongst the backdrop of insufficient literature and statistical analysis of 

the environment. Whether the military, by default or not, is the right tool to implement 

expeditionary economics, is cautiously refuted. 
29

Notes

1. Ideas in Action, “Is DOD the New AID? Tasking Soldiers with Economic Development,” 

http://www.ideasinactiontv.com/episodes/2010/10/is-dod-the-new-aid-tasking-Soldiers-witheconomic-development.html (accessed January 22, 2011).

2. “In 2010, Carl Schramm, the president and CEO of the Ewing Marion Kauffman Foundation, 

published a paper in Foreign Affairs entitled “Expeditionary Economics.” Arguing that the 

economies of Iraq and Afghanistan have shown few signs of progress, Schramm makes the case for 

the US military to engage broadly in mid-conflict and post-conflict reconstruction, using a variety 

of tools. Economic reconstruction must be a part of a three-legged strategy along with invasion and 

stabilization. To do reconstruction, the US Military needs to expand its areas of competence, rid 

itself of its central planning mentality and become a more flexible force that can facilitate economic 

growth at the same time that it is trying to stabilize the regions in which it is engaged. Schramm argues 

for modest yet effective projects, saying that “job diversity” in the private sector is very important 

and requires a wide range of interventions, well beyond the relatively narrow set of activities that 

the US Military currently funds in places like Iraq and Afghanistan. “Messy capitalism” requires 

the military to allow and even foster various forms of entrepreneurial activity to emerge, in an 

uncontrolled and even chaotic manner, from which a robust private sector can be created.” Gregory 

Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders Emergency Response Program 

in Afghanistan & Refining US Military Capabilities in Stability and in Conflict Development” 

USMA Senior Conference XLVII http://www.dean.usma.edu/sosh/senior_conference/sc_papers/

Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 12 June 2012).

3. This idea is expanded upon by Yergin, Daniel, and Stanislaw, Joseph. The Commanding 

Heights: the Battle for the World Economy. (New York: Simon & Schuster, 2002), ch. 4.

4. Command and General Staff College Entrepreneurship and Expeditionary Economics: 

Towards a New Approach to Economic Growth following Conflict or Disaster, proceedings, 

Command and General Staff College, Ft. Leavenworth, Kansas http://sites.kauffman.org/eee/

resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

5. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and Disasters,” 

Foreign Affairs 89, no. 3 (April/May 2010): 89.

6. US Joint Chiefs of Staff. National Military Strategy of the United States of America 2011—

Redefining America’s Military Leadership. Washington, DC: US Joint Chiefs of Staff, February 8, 

2011. http://www.jcs.mil//content/files/2011-02/020811084800_2011_NMS_-_08_FEB_2011.pdf 

(accessed 25 April 2011).

7. US Joint Chiefs of Staff. National Military Strategy of the United States of America 2011—

Redefining America’s Military Leadership. Washington, DC: US Joint Chiefs of Staff, February 8, 

2011. http://www.jcs.mil//content/files/2011-02/020811084800_2011_NMS_-_08_FEB_2011.pdf 

(accessed 25 April 2011).

8. US Joint Chiefs of Staff. National Military Strategy of the United States of America 2011—

Redefining America’s Military Leadership. Washington, DC: US Joint Chiefs of Staff, February 8, 

2011. http://www.jcs.mil//content/files/2011-02/020811084800_2011_NMS_-_08_FEB_2011.pdf 

(accessed 25 April 2011).

9. Rebecca Patterson and Dane Stangler, Building Expeditionary Economics: Understanding 

the Field and Setting Forth a Research Agenda, (Kansas City: Kauffman Foundation, 2010), 6.

10. United States Institute of Peace “Opposed Development: Concept and Implications.” http://
30

www.usip.org/events/opposed-development-concept-and-implications (accessed 4 April 2011).

11. Joshua Foust. “Expeditionary Economics: A New Approach to Post-Crisis Development.” 

American Security Project. http://americansecurityproject.org/wp-content/uploads/2011/04/

Expeditionary-Economics-ExpEcon-Part-One.pdf (accessed 20 May 2011).

12. Joshua Foust. “Expeditionary Economics: A New Approach to Post-Crisis Development.” 

American Security Project. http://americansecurityproject.org/wp-content/uploads/2011/04/

Expeditionary-Economics-ExpEcon-Part-One.pdf (accessed 20 May 2011).

13. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (April/May 2010).

14. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (April/May 2010), 90.

15. Arlyn T. Gajilan “Entrepreneurs in Iraq Tangle in US Red Tape” CNN 1 November 2004, 

http://money.cnn.com/magazines/fsb/fsb_archive/2004/11/01/8190934/index.htm (accessed 6 

March 2011).

16. Jeff Peterson and Mark Crow “Expeditionary Economics: Towards a Doctrine for Enabling 

Stabilization and Growth” USMA Senior Conference XLVIII http://www.dean.usma.edu/sosh/

senior_conference/sc_papers/USMA%20February%20Conference%202011-Paper.pdf (accessed 5 

June 2012).

17. This idea is expanded upon on by Jeff Peterson and Mark Crow “Expeditionary Economics: 

Towards a Doctrine for Enabling Stabilization and Growth” USMA Senior Conference XLVIII http://

www.dean.usma.edu/sosh/senior_conference/sc_papers/USMA%20February%20Conference%20

2011-Paper.pdf (accessed 5 June 2012).

18. Gregory Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders Emergency 

Response Program in Afghanistan & Refining US Military Capabilities in Stability and In-Conflict 

Development.” USMA Senior Conference XLVIII http://www.dean.usma.edu/sosh/senior_

conference/sc_papers/Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 12 June 

2012).

19. Gregory Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders Emergency 

Response Program in Afghanistan & Refining US Military Capabilities in Stability and in 

Conflict Development” USMA Senior Conference XLVII http://www.dean.usma.edu/sosh/senior_

conference/sc_papers/Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 12 June 

2012).

20. Rebecca Patterson and Jonathan Robinson. “The Commander as Investor: Changing CERP 

Practices.” PRISM 2, no. 2 (March 2011): 115-26. http://www.ndu.edu/press/lib/images/prism2-2/

prism_toc.pdf (accessed April 1, 2011).

21. CERP has three primary components: reconstruction, death benefits/battle damage 

payments, and economic development. Reconstruction includes repair or reconstruction of hospitals, 

clinics, power transmission and distribution networks, water or sewer systems, police and fire 

stations, schools, telecommunications systems or infrastructure, roads, bridges, and civic or cultural 

buildings/facilities. Death benefits/battle damage payments include condolence payments as a means 

of expressing sympathy and repair of damage resulting from military operations that cannot be 

compensated under the Foreign Claims Act. Economic development includes protective measures 
31

for critical infrastructure sites, micro grants to disadvantaged small businesses and entrepreneurs, 

job promotion, and civil cleanup activities. Rebecca Patterson and Jonathan Robinson. “The 

Commander as Investor: Changing CERP Practices.” PRISM, no. 2 (March 2011): 115-26. http://

www.ndu.edu/press/lib/images/prism2-2/prism_toc.pdf (accessed April 1, 2011).

22. As highlighted by Rebecca Patterson and Jonathan Robinson. “The Commander as Investor: 

Changing CERP Practices.” PRISM, no. 2 (March 2011): 115-26. http://www.ndu.edu/press/lib/

images/prism2-2/prism_toc.pdf (accessed April 1, 2011).

23. Gregory Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders Emergency 

Response Program in Afghanistan & Refining US Military Capabilities in Stability and In-Conflict 

Development.” USMA Senior Conference XLVIII http://www.dean.usma.edu/sosh/senior_

conference/sc_papers/Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 12 June 

2012).

24. David Kilcullen argues that there is a threefold framework in which development activity 

occurs: in environments of peace or post conflict, environments where active terrorist organizations 

exist, and environments where an added layer of complexity is introduced by the terrorists vying 

for population support through their own development activity. This framework draws from 

the comments of Gregory Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders 

Emergency Response Program in Afghanistan & Refining US Military Capabilities in Stability and 

In-Conflict Development.” USMA Senior Conference XLVIII http://www.dean.usma.edu/sosh/

senior_conference/sc_papers/Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 

12 June 2012).

25. As cited by David Kilcullen “Counterinsurgency in Iraq” Noetic. http://www.orgsites.com/

va/asis151/CounterinsurgencyinIraqTheoryandPractice2007.pdf (accessed 20 February 2011).

26. As cited by David Kilcullen “Counterinsurgency in Iraq” Noetic. http://www.orgsites.com/

va/asis151/CounterinsurgencyinIraqTheoryandPractice2007.pdf (accessed 20 February 2011).

27. David Galula, Counter-Insurgency Warfare: Theory and Practice (New York: Oxford 

University Press, 1964), p. 63.

28. David Galula, Counter-Insurgency Warfare: Theory and Practice (New York: Oxford 

University Press, 1964), p. 63.

29. David Kilcullen, “Small Wars Center of Excellence Counterinsurgency Seminar 07” Small 

Wars Center. https://jko.harmonieweb.org/coi/iwt/IWed/Document%20Library/Report%20-%20

Counterinsurgency%20in%20Iraq%20-%20Theory%20and%20Practice%202007.pdf (accessed 5 

May 2011).

30. Gregory Johnson, Vijaya Ramachandran and Julie Walz, “The Commanders Emergency 

Response Program in Afghanistan & Refining US Military Capabilities in Stability and In-Conflict 

Development.” USMA Senior Conference XLVIII http://www.dean.usma.edu/sosh/senior_

conference/sc_papers/Ramachandran%20EE%20final%205%2019%202011.pdf (accessed 12 June 

2012).

31. Andrew Natsios, “Opposed Development: Concept and Implications.” Event at the United 

States Institute of Peace, June 16, 2010. As cited by Gregory Johnson, Vijaya Ramachandran and 

Julie Walz, “The Commanders Emergency Response Program in Afghanistan & Refining US 

Military Capabilities in Stability and In-Conflict Development.” USMA Senior Conference XLVIII 

http://www.dean.usma.edu/sosh/senior_conference/sc_papers/Ramachandran%20EE%20final%20

5%2019%202011.pdf (accessed 12 June 2012).
32

32. David Galula, Counter-Insurgency Warfare: Theory and Practice (New York: Oxford 

University Press, 1964), p. 54. David Galula further states that victory is not just the destruction 

in a given area of the insurgent’s forces and his political organization, for if either or both are 

destroyed, it will be re-created either from within, or by insurgents from outside. He cites the 

numerous examples of mopping-up operations by the French in the Plain of Reeds in Cochinchina 

throughout the Indochina War. A complete victory, the isolation of insurgents maintained by and 

with the population, is exemplified by David Galula in the defeat of the FLM in the Oran region in 

Algeria (1959-1969). 

33. Barack Obama, National Security Strategy 2010. http://www.whitehouse.gov/sites/default/

files/rss_viewer/national_security_strategy.pdf (accessed 5 February 2011).

34. Kori Schake “Operationalizing Expeditionary Economics,” Entrepreneurship and 

Expeditionary Economics: Towards a New Approach to Economic Growth following Conflict or 

Disaster, Command and General Staff College, Ft. Leavenworth, Kansas, http://sites.kauffman.org/

eee/resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

35. Kori Schake “Operationalizing Expeditionary Economics,” Entrepreneurship and 

Expeditionary Economics: Towards a New Approach to Economic Growth following Conflict or 

Disaster, Command and General Staff College, Ft. Leavenworth, Kansas, http://sites.kauffman.org/

eee/resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

36. Kori Schake “Operationalizing Expeditionary Economics,” Entrepreneurship and 

Expeditionary Economics: Towards a New Approach to Economic Growth following Conflict or 

Disaster, Command and General Staff College, Ft. Leavenworth, Kansas, http://sites.kauffman.org/

eee/resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

37. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (April/May 2010): 90.

38. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (April/May 2010): 90.

39. Described by David Kilcullen, “Small Wars Center of Excellence Counterinsurgency 

Seminar 07” Small Wars Center. https://jko.harmonieweb.org/coi/iwt/IWed/Document%20Library/

Report%20-%20Counterinsurgency%20in%20Iraq%20-%20Theory%20and%20Practice%20

2007.pdf (accessed 5 May 2011).

40. As cited by Kori Schake “Operationalizing Expeditionary Economics,” Entrepreneurship 

and Expeditionary Economics: Towards a New Approach to Economic Growth following Conflict 

or Disaster, Command and General Staff College, Ft. Leavenworth, Kansas, http://sites.kauffman.

org/eee/resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

41. Carl J. Schramm, “Expeditionary Economics: Spurring Growth after Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (April/May 2010): 95.

42. As cited by Kori Schake “Operationalizing Expeditionary Economics,” Entrepreneurship 

and Expeditionary Economics: Towards a New Approach to Economic Growth following Conflict 

or Disaster, Command and General Staff College, Ft. Leavenworth, Kansas, http://sites.kauffman.

org/eee/resources/ee_summit_proceedings.pdf (accessed 1 April 2011).

43. As suggested by Matt Waldman, “Caught in the Conflict – Civilians and the International 

Security Strategy in Afghanistan” A Briefing Paper for the NATO Heads of State and Government 

Summit, 3-4 April 2009. http://www.oxfam.org.uk/resources/policy/conflict_disasters/downloads/

bp_caught_in_conflict_afghanistan.pdf (accessed 03 March 2011).
33

44. Country Profile, USAID Afghanistan, 11 May 2008, as cited by Matt Waldman, “Caught 

in the Conflict – Civilians and the International Security Strategy in Afghanistan” A Briefing Paper 

for the NATO Heads of State and Government Summit, 3-4 April 2009. http://www.oxfam.org.uk/

resources/policy/conflict_disasters/downloads/bp_caught_in_conflict_afghanistan.pdf (accessed 03 

March 2011).

45. Auil Shah in the new Foreign Affairs edition on Pakistan

46. Matt Waldman, “Caught in the Conflict – Civilians and the International Security Strategy 

in Afghanistan” A Briefing Paper for the NATO Heads of State and Government Summit, 3-4 April 

2009. http://www.oxfam.org.uk/resources/policy/conflict_disasters/downloads/bp_caught_in_

conflict_afghanistan.pdf (accessed 03 March 2011).

47. Matt Waldman, “Caught in the Conflict – Civilians and the International Security Strategy 

in Afghanistan” A Briefing Paper for the NATO Heads of State and Government Summit, 3-4 April 

2009. http://www.oxfam.org.uk/resources/policy/conflict_disasters/downloads/bp_caught_in_

conflict_afghanistan.pdf (accessed 03 March 2011).

48. Matt Waldman, “Caught in the Conflict – Civilians and the International Security Strategy 

in Afghanistan” A Briefing Paper for the NATO Heads of State and Government Summit, 3-4 April 

2009. http://www.oxfam.org.uk/resources/policy/conflict_disasters/downloads/bp_caught_in_

conflict_afghanistan.pdf (accessed 03 March 2011).

49. Nicholas H. Riegg, “Implementing Expeditionary and Entrepreneurial Economics: Iraq 

and Afghanistan,” Entrepreneurship and Expeditionary Economics: Towards a New Approach 

to Economic Growth following Conflict or Disaster, Command and General Staff College, Ft. 

Leavenworth, Kansas, http://sites.kauffman.org/eee/resources/ee_summit_proceedings.pdf 

(accessed 1 April 2011).

50. Nicholas H. Riegg, “Implementing Expeditionary and Entrepreneurial Economics: Iraq 

and Afghanistan,” Entrepreneurship and Expeditionary Economics: Towards a New Approach 

to Economic Growth following Conflict or Disaster, Command and General Staff College, Ft. 

Leavenworth, Kansas, http://sites.kauffman.org/eee/resources/ee_summit_proceedings.pdf 

(accessed 1 April 2011).

51. The signatories to this report are: Action Aid, Afghanaid, CARE, Christian Aid, Concern 

Worldwide, Norwegian Refugee Council, Oxfam and Trocaire.

52. US Army Combined Arms Center, “Commanders’ Guide to Money as a Weapons System: 

Tactics, techniques and Procedures,” April 2009.

53. Oxfam “Quick Impact Quick Collapse: The Dangers of Militarized Aid in Afghanistan,” 

Oxfam Research. http://www.oxfam.org/en/policy/quick-impact-quick-collapse (accessed 20 April 

2011).

54. Oxfam “Quick Impact Quick Collapse: The Dangers of Militarized Aid in Afghanistan,” 

Oxfam Research. http://www.oxfam.org/en/policy/quick-impact-quick-collapse (accessed 20 April 

2011).

55. BAAG provides regular information on the political, economic and security situation in 

Afghanistan and is an effective network for international NGOs operating in Afghanistan. The 

BAAG project was set up by British NGOs in 1987 as an umbrella group to draw public attention to 

the humanitarian needs of the population of Afghanistan and of Afghan refugees in Iran and Pakistan. 

BAAG’s endorsement of Oxfam’s views is found in An Alternative View: Afghan Perspectives on 

Development and Security, http://www.baag.org.uk/news/7-latest-news/31-live-video-streaming-
34

of-an-alternative-view-afghan-perspectivves-on-development-and-security

56. As reported by Aditya Mehta, UNAMA, http://unama.unmissions.org/Default.aspx?tabid=

1741&ctl=Details&mid=1882&ItemID=7100 (accessed 20 May 2011).

57. As reported by Aditya Mehta, UNAMA, http://unama.unmissions.org/Default.aspx?tabid=

1741&ctl=Details&mid=1882&ItemID=7100 (accessed 20 May 2011). 

58. US Army, Field Manual (Interim) 3, Operations, 2008 (Washington: Headquarters, 

Department of the Army, 2008).

59. US Army, Field Manual (Interim) 3, Operations, 2008 (Washington: Headquarters, 

Department of the Army, 2008).

60. US Army, Field Manual (Interim) 3, Operations, 2008 (Washington: Headquarters, 

Department of the Army, 2008), 3-20.

61. Nicholas H. Riegg, “Implementing Expeditionary and Entrepreneurial Economics: Iraq 

and Afghanistan,” Entrepreneurship and Expeditionary Economics: Towards a New Approach 

to Economic Growth following Conflict or Disaster, Command and General Staff College, Ft. 

Leavenworth, Kansas, http://sites.kauffman.org/eee/resources/ee_summit_proceedings.pdf 

(accessed 1 April 2011).

62. Conclusion needs work. You need to have some punch at the end and clearly indicate what 

the US military, especially the Army, should do in regard to EE. Also, go back to your introduction 

and ensure you address all your initial questions with forceful answers here.
35

Expeditionary Economics and Its Implications on the United States Army

by

Major Marc E. Pelini - United States Army

Abstract

Since the end of the Cold War, the United States government has increasingly 

deployed its Army forces in support of global stability and support operations. Based 

on the 2010 Department of Defense Review and the Department of Defense Directive 

3000.05, this trend is likely to continue for the foreseeable future. These documents, as 

well the national security documents at every level of the US federal government place a 

mandate on the military to develop, institutionalize, and resource economic stability and 

development capabilities to reduce both global instabilities and to prevent regional and 

global insurgencies. While the Army has begun to adapt in response to these directives, it 

remains institutionally ill-prepared to deal with the economic issues presented in stability 

operations. This monograph investigates two influential economic theories that could 

serve as fundamental approaches towards economic development in stability operations; 

analyzes what and how effective the “whole-of-government” approach has been in 

stability operations in Iraq and Afghanistan; examines how the Army is trying to change 

its institutional approach to stability operations; and identifies areas in the Army force 

structure, doctrine, training and education, and organization that could increase its overall 

effectiveness in future stability operations. 
36

Acronyms

AAB Advise and Assist Brigade 

AC Active Component 

ACS Advanced Civil Schooling 

ARFORGEN Army Force Generation Model 

ASI Army Skill Identifier 

BCT Brigade Combat Team 

BDE Brigade 

BOG Boots on the Ground 

CA Civil Affairs 

CARD Center for Agriculture and Rural Development 

CCC Captains Career Course 

CCJO Capstone Concept for Joint Operations 

CCP Contingency Command Post 

CGSC Command and General Staff College 

CERP Commander’s Emergency Relief Program 

DoD Department of Defense 

ePRT Embedded Provincial Reconstruction Teams 

FM Field Manual 

GCC Global Combatant Command

HBCT Heavy Brigade Combat Teams 

ILE Intermediate Level Training 

JOE Joint Operating Environment 

NDS National Defense Strategy 

NGO Non-Government Organization 

NSS National Security Strategy 

OBC Officer Basic Course 

OEF Operation ENDURING FREEDOM 

OIF Operation IRAQI FREEDOM 

PRT Provincial Reconstruction Teams 

QDR Quadrennial Defense Review 

RC Reserve Component 

S/CRS Department of State Office of the Coordinator for Reconstruction 

and Stabilization 

USAID United States Agency for International Development

USAFRICOM United States Africa Command

USAR United States Army Reserve

USCENTCOM United States Central Command 

USEUCOM United States European Command 

USPACOM United States Pacific Command

USSOUTHCOM United States Southern Command
37

Introduction

But I have spoken thus far only of the military challenges which your education 

must prepare you for. The nonmilitary problems, which you will face, will also 

be most demanding. . . In the years ahead, some of you will serve as advisors to 

foreign aid missions or even to foreign governments. . . . Whatever your position, 

the scope of your decisions will not be confined to the traditional tenants of military 

competence and training. . . . You will be involved in economic judgments, which 

most economists would hesitate to make.1

- President John F. Kennedy

Remarks to the United States Military Academy Graduating Class of 1962

Since the end of the Cold War, the US government has become increasingly dependent 

on its military to support its global political objectives. During this time, the US military has 

deployed in support of over 110 contingencies throughout the world.2

 These contingencies 

have ranged from peacekeeping operations in Kosovo and Bosnia to combat and later 

stability and reconstruction operations in Afghanistan and Iraq. Because of these operations, 

the US has gained significant experience and insights into conducting operations across 

the full spectrum of conflict. While some would argue that the challenging experiences in 

Afghanistan and Iraq would make politicians less prone to deploy the military in the future, 

these pundits are not properly considering the current geopolitical environment. 

The United States exists in a world that is interconnected more than at any other time in 

history. Globalization, global terrorism, and regional instability have significantly increased 

the complexity of the world. They have not only placed greater demands on resources, but 

have placed disparate cultures in direct confrontation with each other in areas or regions 

that possess critical US economic and military interests. As a result, the United States 

is committed to ensuring these interests remain secure by achieving long-term stability 

of these states and regions. Yet, unlike the pre-Cold War environment, which viewed the 

Soviet threat as linear and to an extent predictable, the asymmetrical environment and 

threats that the United States faces today and for the near future are more lethal, adaptable, 

and irregular. 

The 2010 Joint Operating Environment (JOE), a document that provides a strategic 

framework and forecasts threat trends that will challenge the US Armed Forces in the 

future, states that the US will continue to face numerous multidimensional challenges to 

its security. The US will continue to confront challenges posed by increasing proliferation 

of technology, globalization, urbanization, and weak or failing states, as well as competing 

international narratives. The prospects provided by these trends may increase the necessity 

to deploy US Forces to secure our global interests. They will present unique challenges 

to our military capabilities by growing conventional, irregular, or hybrid threats that 

operate in both urban and austere environments.3

 As a result, the US military must develop 

capabilities and expertise that not only focuses on defeating these potential threats, but also 

create an environment that prevents their reoccurrence.
38

While the first priority of the US military must always be the safety and security of its 

population, it must face the fact that the nature of warfare is ever changing and evolving. 

The military must shed the paradigm of focusing solely on the lethality of the military 

instrument of power and recognize that in order to protect the US interests in the longterm, it must be willing to possess and sustain innovative security assistance and stability 

operations capabilities. It must be willing to instill and institutionalize many of the ad 

hoc security assistance, stability, reconstruction and peacekeeping capabilities that were 

painfully borne out of Operation ENDURING FREEDOM (OEF) and Operation IRAQI 

FREEDOM (OIF).4

 While both of these conflicts demonstrate that the US military is 

extremely capable of providing short-term stability while its troops are on the ground, 

the underlying challenge remains – how can the US military establish long-term security 

so it does not have to return? One avenue to potential success is simple to identify, it is 

even harder to solve – economic development. Despite this avenue for long-term stability, 

the US Army is currently ill-prepared to deal with economic issues presented in stability 

operations. 

According to Paul Collier, a former Director of the Development Research Group of 

the World Bank, economic disparity is the root cause of conflict. Contrary to many previous 

assertions, social grievances such as inequality, lack of democracy, and ethnic and religious 

divisions are not the root cause of conflict. Rather, Collier identifies economic conditions 

such as dependence on commodity exports and low national income as the main contributive 

factors to conflict.5

 He ascertains that there is a strong correlative relationship between the 

risk of conflict and the population’s level of income. This relationship is important because 

he demonstrates that a decline in per capita income is directly proportional to the increase 

in risk of conflict in that nation.6

 Given this fact, a primary question remains: Does the 

US military need to create an economic development capability as part of its stability and 

reconstruction portfolio or should it remain the responsibility of another US agency?

According to Kori Schake, a research fellow at the Hoover Institute, the responsibility 

for economic development is not a military one. Rather, Schake argues that the lines of 

authority for economic development “lie with the Department of State, the US Agency 

for International Development, the Export-Import Bank of the US Trade Representative, 

the Department of Commerce and the Department of Treasury.”7 Yet, experiences in 

Iraq and Afghanistan have demonstrated that these departments and agencies have not 

adequately fulfilled their statutory requirements. This, in turn, creates operational voids 

that the Department of Defense (DoD) typically has to fill without any level of expertise 

or preparation. These voids occur because of the environments in which these civilian 

agencies are required to operate and not a result of their expertise. Because many stability 

and reconstruction operations occur in hostile8 or uncertain9 environments, where the risk 

for armed conflict is present, civilian servants are less likely to deploy to these areas. The 

difficulties of deploying civilian servants was evident in 2007 when Department of State 

employees balked at calls to serve in Iraq during the troop surge and when violence in 

Baghdad was high.10 While Secretary of State Condoleezza Rice eventually filled these 

vacancies with some direct intervention, the question remains if the embassy received the 

right level of expertise to fill these positions. 
39

In 2004, the US federal government attempted to address the requirement for an 

economic development capability as well as others needed during the period in which 

operations change from “sustained combat operations to stability operations,” 11 or 

commonly referred to as Phase IV operations. During this phase, it is expected that the 

host country will have a limited or lack of a legitimate government. To prevent the country 

from falling into further chaos, the US military must be prepared to perform limited 

government functions and to coordinate and integrate other government, non-government 

organization (NGO) and international government efforts until a legitimate government is 

functioning.12 In its attempt to address this essential capability outside the military, the US 

federal government established the Civilian Response Corps. This agency, which is part of 

the Department of State Office of the Coordinator for Reconstruction and Stabilization (S/

CRS), is authorized to hire 4,250 people to fill this gap. Yet, these civilians do not receive the 

necessary security training to protect them in either a hostile or an uncertain environment. 

The resulting threats from these environments and a lack of security training may drive 

some of these experts to respond in the same way their peers did in 2007 when faced with 

the prospects of being assigned to the US Embassy in Iraq. Based on this assertion, it is 

likely that the US Army will be compelled to fill any vacancies if it is going to effectively 

and successfully garner the support of the local population and establish the conditions for 

long-term success. With this is mind, former United Nations General Dag Hammerskold’s 

statement remains relevant today that, “peacekeeping is not a job for Soldiers, but only a 

soldier can do it.”13 

In dealing with the complex economic problems present in stability operations, there 

are no easy solutions. Yet the solutions that we implement must be done with some basic 

understanding and expertise of both the economic theories that describe and provide a 

fundamental understanding of economics. Without this knowledge, hidden economic 

effects that could have been identified through education may worsen the problem and 

change the course of the whole strategy that the United States is pursuing. Rather than 

simply spending money to achieve short-term symptomatic solutions, the US military 

should address the economic causes and help define and implement long-term solutions 

that resolve the underlying economic causes of instability.

While there is a general sense that the military is beginning to develop approaches to 

deal with the overall challenges of stability operations, comprehensive tools to analyze and 

constructively develop recommended solutions to the economic issues on the battlefield 

are insufficient. The Army must look at the way that it is constructed if it is going to be 

able to really reframe the problem and develop innovative capabilities that are able to 

address the economic challenges that are present within stability operations. One argument 

is that the Army should develop numerous peacekeeping units that are solely responsible 

for stability operations. While this is an appealing method, the current and projected 

rotational requirements for supporting the numerous global contingencies make this option 

untenable. This is because the reliance on the Reserve Component, consisting of the Army 

National Guard and Army Reserve is becoming less sustainable when their Soldiers are 

removed from their civilian occupations on a routine basis. 
40

The Army has taken considerable steps forward in another approach by institutionalizing 

the modular Brigade Combat Team (BCT). The modular BCT is unique because it is 

versatile enough to adapt and transform into an Advise and Assist Brigade (AAB) during 

stability operations. The BCT accomplishes this transformation by integrating critical 

enabling capabilities such as Civil Affairs (CA) and others into is organizational structure. 

Yet, the transformation into BCT modularity is still not enough to adequately deal with 

the economic challenges faced during stability operations. This is because many of the 

enabling capabilities that help transform the BCT into an AAB during OIF and OEF have 

not been institutionalized into the Army’s force structure to the level necessary to provide 

a sustainable solution. 

This monograph will attempt to bring resolution to some of these issues. It will examine 

why economic development is essential to our nation’s strategies and what economic 

theories could provide guidance for future Army operations. It will then examine proven 

techniques and procedures that are currently being employed throughout the world to 

facilitate economic development and promote stability. This monograph will then examine, 

in more depth, the effectiveness of the whole of government approach and areas in which 

the Army can provide assistance. It will then examine areas in which the Army is lacking 

the necessary economic expertise and capabilities to facilitate economic growth and then 

provide manning, training, and force structure recommendations. In addressing these areas, 

this monograph will also examine the impacts, if any; that result from the development of 

an expeditionary economic capability will have on the operational force and its deployment 

cycles. 

The Mandate for Economic Development Capability

Economic development, along with security and diplomacy, is one of the three pillars 

of a successful counterinsurgency or stability and support strategy.14 Every level of the 

US federal government recognizes economic development capabilities and expertise as 

a key planning component to reduce both global instabilities and to prevent regional and 

global insurgencies. From the national strategy to the departmental strategies, economic 

development expertise is an enabling capability that not only aids in the establishment 

of long-term security, but also assists in defeating potential terrorist organizations. In his 

2010 National Security Strategy (NSS), President Barrack Obama codifies this premise by 

providing the strategic underpinnings for the establishment of an economic development 

capability for the US government. The NSS, provides executive agencies with guidance 

to create budgets and develop capabilities that pursue the US national objectives through 

the employment of its national instruments of power.15 This national strategy states that 

the federal government must create and maintain development capabilities that “prevent 

conflict, spur economic growth, strengthen weak and failing states, lift people out of 

poverty . . . and strengthen institutions of democratic governance.”16 It places development 

capabilities as a strategic, economic, and moral imperative that “can strengthen the 

regional partners we need to help us stop conflicts and counter global criminal networks . 

. . and position ourselves to better address key global challenges by growing the ranks of 

prosperous, capable, and democratic states that can be our partners in the decades ahead.”17
41

The National Defense Strategy (NDS) serves as DoD’s capstone strategy document. It 

provides guidance to the military for the development of global contingency plans as well 

as direction on how to best man, train and equip the Armed Forces to fight and win the 

nation’s wars.18 Like the NSS, the NDS postulates that the DoD will continue to participate 

in a protracted war against violent extremism for the foreseeable future. These types of 

conflicts will require the DoD to employ the military instrument of power skillfully to 

establish security while using the diplomatic, economic, and information instruments of 

power to achieve long-term success.19 While this assertion is based on an uncertain future, 

it is grounded by the DoD’s experiences in Iraq and Afghanistan where it has executed 

several non-traditional military tasks of long-term reconstruction, development, and 

governance. While the DoD recognizes and encourages other federal agencies to develop 

expeditionary capabilities to support these missions, the NDS calls for the US Armed 

Forces “to institutionalize and retain these capabilities.”20

In addition to the NDS, the DoD issued a directive in September 2009 that further 

solidified the requirement for an economic development capability within the military. 

Department of Defense Instruction 3000.05 ordered the department to make stability 

operations a core competency of the Armed Forces. For that reason, stability operations 

and conventional combat operations are co-equals with respect to planning, staffing, 

training, and equipping. The purpose of this policy directive is to ensure that the military is 

prepared to conduct future stability operations in all phases of conflict and across the range 

of military operations, to include both combat and non-combat environments. It supports 

the fielding of capabilities:

aimed not only at rebuilding infrastructure, developing local governance structures, 

and fostering security, but also in fostering economic stability and development and 

building of indigenous capability for such tasks.”21 In supporting this requirement, 

the instruction directs the DoD to “revive or build the private sector, including 

encouraging citizen-driven, bottom-up economic activity and constructing 

necessary infrastructure.22

The call for the creation of an economic development capability later matured with 

the publication of the 2010 Quadrennial Defense Review (QDR) in February 2010. 

The 2010 QDR identified the increase of counterinsurgency, stability operations, and 

counterterrorism competency in the general-purpose force, or conventional Army, as one 

of its six key initiatives.23 In pursing this initiative, the 2010 QDR recommended the growth 

of Army Civil Affairs forces to serve as the vanguard for the DoD in supporting the federal 

government’s efforts to assist partner governments in the field of economic stability as well 

as other stabilization and support activities.24

Finally, the 2009 Capstone Concept for Joint Operations (CCJO), which is the Chairman 

of the Joint Chiefs of Staff’s guidance for joint force development and employment, directs 

the joint force to optimize across nine domains; one of which is to improve the ability to 

operate in urban environments. In identifying urban conflicts as a common environment of 

future conflict, the CCJO articulates the requirement of the joint force to conduct economic 

engagement activities in support of reconstruction or development activities.25 
42

When the US military occupies an operational area, both the NDS to the CCJO 

clearly state that it must be prepared to handle the economic development and stability 

activities that derive from stability operations. According to Joint Publication 3-07.3: 

Peace Operations, these activities include “restoring employment opportunities, initiating 

market reform, mobilizing domestic and foreign investment, supervising monetary 

reform, and rebuilding public structures.”26 In examining these requirements, the Army 

commissioned a study in 2010 to identify the types of tasks and challenges it could face 

when executing these economic stabilization activities. Table 1 lists the tasks, definitions, 

and respective subtasks. 

When the military approaches these economic stabilization and development tasks, 

it is important that it does so using accepted economic theory. Although there are several 

economic theories that could be used based on their specific mission and the environment 

in which the Army is operating within, this monograph will examine two of the more 

influential theories: Classical and Keynesian economic theory. Understanding these two 

theories is important for two reasons. First, it provides the foundation for understanding 

how the US Army can approach economic development at the local level as well as possible 

ramifications that could emerge from such activities. Second, these theories can serve as a 

cornerstone or theoretical foundation for providing informed recommendations to the host 

nation or to the Department of State that may render long-term ramifications for the host 

nations stability, security and overall economic viability during Phase IV operations. 

Foundational Economic Theory

Classic economic theory was developed in 1776 by Adam Smith with the publication 

of the Wealth of Nations and is considered the first recognized theory on economics. In 

the Wealth of Nations, Smith denounced the mercantilist practices of his time, which 

encouraged the government’s obtaining wealth at the expense of its population in order for 

it to project military or political power. He fundamentally disagreed with the mercantilist 

approach that encouraged the population to buy only domestically produced goods, set 

price and maximum wage laws, predetermined the society’s production specialties, and 

directed the professions of its population. Smith believed that such government policies 

were inefficient and limited the nation’s true production capability.27 Instead, he believed 

that the population as a whole, and not the government, was wise enough to plan the 

economic affairs of the nation. This concept was rooted in the faith that the production 

capability of the nation resided in its population and could be harnessed through laissezfaire capitalism, or with little government intervention.28 He thought that the role of the 

government should be limited to three roles: defense, justice, and public works. Defense is 

a necessary role of the government to provide the required security and defense to protect 

its people and their property in order for free trade and commerce to flourish. Justice, or 

a legal system, is required to regulate contracts and arbitrate commercial disagreements. 

Finally, public works are necessary to provide public goods such as roads, bridges, and post 

offices as well as issuing a common currency, enforcing property rights and education that 

further the overall well-being of the society.29

Smith and other classical economists such as David Ricardo, Thomas Malthus, and 

John Stuart Mill favor laissez-faire economics because it eliminates special privileges, 
43

arbitrary restrictions, and ineffective use of resources that limit the growth of an economy.30

By eliminating government sponsored monopolies or other economic hindrances in favor 

of individual economic freedoms, these economists believe the economy and the nation as 

a whole is more apt to flourish. By leveling the economic playing field, individuals have 

the opportunity to prosper over their previous generations by allowing them to maximize 

their profits by specializing in production and exploiting comparative advantages in the 

marketplace. The effects from these limitations on government policy would, over time, 

result in a more effective and efficient allocation of the nation’s finite resources.31 

Classical economic theory represents a supply side model by proclaiming that the 

overall economic well-being of a country is directly proportional to how fast demand for 

labor increases over time.32 It considers the price of goods, cost of labor, and interest rates as 

fixed or constant at the existing market price in the short-term, and argues they are flexible 

or capable of going up or down, in the long-term.33 Classical economists contend that the 

economy is based on a self-correcting mechanism, referred to as the “invisible hand”, 

which pushes prices, labor costs, and interest rates towards its “natural” or equilibrium 

point in the long-term. Because of the influence of the invisible hand, any unemployment 

that may arise from higher labor costs is temporary and will be eliminated as the cost of 

labor drops in response to lower costing labor in the marketplace.34 

Say’s Law, which states supply constitutes or creates its own demand, is a critical 

component of classical economic theory. Say’s Law maintains that the total supply of 

goods and services will always equal the total demand for goods and services. This means 

that the production for goods only occurs if people receive satisfaction from that good 

and are willing to pay for it, thus creating its own demand.35 Similarly, this assertion also 

contends that any excess or shortages of total supply or demand of a good is eliminated as 

its price decreases or increases over time.36 

Finally, classical economists maintain that the level of a country’s money supply is 

neutral to its economic prosperity. If there is excess money on the market, prices increase 

proportionally. In the end, the country’s total output or its employment rates do not change 

because of the rise in prices. Classical economists also say that economic growth is 

determined by the relationship between savings and capital investment. Savings, or any 

excess purchasing power that is not spent on consumption, will support capital development 

by creating demand for capital investment by affecting the market’s interest rates. When 

there is excess capital due to “over saving”, interest rates, which serves to equalize savings 

and capital investment, will decline. As interest rates decline, it will encourage more capital 

investment. If, on the other hand, there is “over investment” interest rates will increase 

and restrict further expansion of production opportunities by firms by making it more 

costly to acquire the necessary capital. These counter-balancing weights serve as a selfcorrecting system for interest rates which results in a long-term “natural” interest rate for 

the market. Based on this explanation, it is understandable why classic economists argue 

that in economic downturns, countries should choke off potential depression by increasing 

saving, reducing their debts, reducing government expenditures, balancing their budgets, 

and reducing wages to achieve economic growth.37 
44

Table 1. Economic Development Tasks for Stability Operations

Essential Task Working Definition Subtasks • Public works jobs

• Micro and small enterprise stimulation

• Skills training

• Counseling

• Central bank operations

• Macroeconomic policy and exchange rates

• Monetary audit

• Monetary statistics

• Fiscal and macroeconomic policy

• Treasury operations

• Budget

• Public sector investment

• Revenue generation

• Tax administration

• Customs reform

• Enforcement

• Tax policy

			• Fiscal audit

• Strategy/assessment

• Prices and subsidies

• International financial assistance -- donor coordination

• Public sector institutions

• Banking operations

• Banking regulations and oversight

• Banking law

• Bank lending

• Asset and money laundering

• Non-banking sector

• Stock and commodity markets

• Debt management

• Arrears clearance

• Trade structure

• Trade facilitation

• Private sector development

• Small and micro-enterprise regime

• Privatization

• Natural resources and environment

• Property rights

• Business/commercial law

• Labor

• Economic legal reform

• Competition policy

• Public utilities and resources regulation

• Economic enforcement and anti-corruption

• Agricultural land and livestock

• Agricultural inputs

• Agricultural policy and financing

• Agricultural distribution

• Pension system

• Social entitlement funds

• Women's issues

Generate Employment

The ability to design, fund, and implement public work initiatives, to 

stimulate micro and small enterprise and foster workforce development 

programs that will rapidly provide employment for the indigenous 

population

Manage and Control Both Foreign and Domestic 

Borrowing and Debt

The ability to manage and control both foreign and domestic borrowing 

and debt

Promote Agricultural Development The ability to support the establishment or re-establishment of a viable 

agricultural sector capable of long-term growth

Establish a Social Safety Net The ability to support the establishment of social safety net programs

The ability to develop and apply sustainable, efficient, and transparent 

fiscal policies that can generate the resources required to sustain key 

public functions. This includes the ability to establish revenue and 

expenditure structures and to manage the economy through the 

expansion and contraction of government spending and to design and 

administer public expenditure systems that are transparent and which 

lend themselves to the equitable and timely formulation of budgets and 

which can plan for the needs of the entire population

Develop and Apply Fiscal Policy and Governance

Develop Trade The ability to establish, develop, sustain, and enforce trade policies, 

laws, regulations, and administrative practices that support 

Promote a Market Economy The ability to support the establishment or re-establishment of a 

functioning market economy

Promote Legal and Regulatory Reform The ability to support the development of a legal and regulatory 

framework supportive of a market economy

Promote General Economic Policies None

Establish, Develop, Regulate, and Sustain a WellFunctioning and Equitable Financial SectorThe ability to establish, develop, regulate, and sustain a well-functioning 

and equitable financial sector

DoD Major Mission Element - Support Economic Development

Develop Monetary Policy

The ability to develop mechanisms and institutions, including the ability 

to set and control interest rates that allow the government to manage 

the economy by expanding or contracting the money supply

Source: Author Created based on data from Jefferson P. Marquis, Developing an Army Strategy for Building 

Partner Capacity for Stability Operations (Arlington, Virginia: RAND Corporation, 2010), 154-156.

While Classical Economic theory provides some important insights into how to 

approach economic development, another theory rose to prominence because of the 

Great Depression. In 1936, John Maynard Keynes challenged classical economic theory 

with the publication of The General Theory of Employment, Interest, and Money. In the 

publication of his book, Keynes challenged nearly all of the basic principles of classical 

economics, which believed that the economy would automatically adjust itself to maximize 
45

a society’s output and employment. Keynes argued that insufficient demand was the main 

obstacle to economic growth, which directly contradicted the classical economic notion 

that insufficient supply was the culprit. To establish sufficient demand in unstable times, 

Keynes argued that the government must play a central role in keeping the economy going 

to allow private enterprises to survive.38

Unemployment was a central point of contention between Keynes and his classical 

economist peers. Whereas classical theorists consider unemployment as temporary and to 

some extent, voluntary, Keynesian theorists are concerned with the problem of involuntary 

unemployment. In examining unemployment, Keynes understood that there were three 

major types of unemployment present in all economies: structural, frictional, and cyclical.39

Structural unemployment occurs when the main industry of the nation cannot support the 

entire workforce. Frictional unemployment occurs when workers move from their current 

job to another or into a new industry. Finally, cyclical unemployment, or depression related 

unemployment, occurs when the economy goes through a cyclical downturn. Cyclical 

unemployment was Keynes’ primary focus in his General Theory.

40 

At the center of Keynes’ argument was uncertainty. He believed that uncertainty “loosens 

all of the ‘tight’ relationships assumed by classical theory which produce a smooth flow of 

demand and supply and validate Say’s Law.”41 Keynes argued that capital investment only 

occurs when there are high expectations that the investment will grow. When the market 

is in decline, uncertainty increases, consumption will naturally decline, and savings will 

increase. Yet, unlike the classical theorists who argue the increase in savings will result 

in higher capital investments as interest rates decline, Keynesian economists argue that 

people will forgo investing because they are uncertain that their investment will provide a 

positive return. This unwillingness to invest and consume, known as a “paradox of thrift”, 

will push the economy further into a depression, create higher unemployment, and leave 

the economy worse off.42

To counterbalance the paradox of thrift, Keynesian economic theory argues that the 

government must act to offset market declines with increased deficit spending. Keynes 

argues in the short-term, total supply is constant and the volume of output, employment, and 

income is reliant on total demand.43 Therefore, the government should focus on increasing 

total demand by increasing governmental expenditures to stimulate consumption and create 

an environment that is favorable to capital investment. By instituting these policies, the 

government is able to stabilize the economy through its fiscal policies. It is able to restrict 

rapid economic growth when the economy is strong by restricting demand for goods 

through taxation and it is able to promote economic growth when the economy is weak by 

borrowing and spending on government projects. This explains why Keynesian economists 

argue that in economic downturns the government should increase spending, increase 

debts, increase government expenditures, and unbalance the government’s budget.44

While neither classical or Keynesian economics provide a one size fits all solution 

for conducting economic development, they both provide some useful insights for how 

the Army can use or recommend the implementation of various parts of these theories to 

help stabilize a country’s economy and prevent further conflict. For instance, the Army 
46

can recommend a policy, based on its local observations and assessments, to increase 

governmental spending to create short-term demand for a particular good or service that is 

essential to the maturing of the economy. Whether the good is private or public, stimulation 

of demand as argued by Keynes may restart the country’s economy in the uncertain 

environment created in Phase IV operations by promoting the necessary investment in 

firms, even if it is for a short period. In contrast, the Army can help ensure the long-term 

viability of the country by recommending or imposing a classical economic model. By 

assisting the local population to establish a diverse supply of goods that are desired by 

the population through the infusion of investment capital, long-term economic stability 

can occur by creating demand for goods that are desired by the population. In pursing this 

mode, the Army could help identify entrepreneurs and provide them with the necessary 

expertise and funding to begin the path of long-term economic growth. Yet, to accomplish 

these goals, there have to be certain conditions that must be set for these theories to work 

effectively in the long- run. 

Conditions for Implementation

The three primary conditions that must be present for any economic stabilization or 

development strategy to succeed are security, good governance, and the rule of law. Security 

is the most important condition in stability operations because it serves as the foundation for 

all other areas of stabilization such as governance, civil control, infrastructure development, 

and economic development to succeed. If individuals and the collective population feel 

that they are threatened, they are less likely to allow comprehensive reform to occur.45

Furthermore, a threatening environment creates uncertainty, which will discourage the 

population from returning to their everyday activities. Uncertainty will also compound the 

economic decline of the country, as Keynes argues, because people will not consume goods 

or invest in businesses at a level, which they otherwise would. To accomplish a safe and 

secure environment, large scale-violence has to cease, pubic order has to be restored, illegal 

armed groups have to be disarmed, physical security has to be instituted, and territorial 

security has to be established.46 

The second condition that is essential for any level of long-term stability to occur 

is good governance. In 1998, Kofi-Annan, the former United Nations Secretary General 

stated, “good governance is perhaps the single most important factor in eradicating poverty 

and promoting development.”47 While the definition of good governance is broad and 

can be interpreted in many ways, the G-8 in 2001 identified six key components of good 

governance as being: 

(1) Accountability and transparency in the public sector, (2) legal frameworks 

and corporate governance regimes to fight corruption, (3) safeguards against the 

misappropriation of public funds and their diversion into non-productive uses, (4) 

access to legal systems for all citizens, independence of the judiciary, and legal 

provisions enabling private sector activity, (5) active involvement of civil society 

and non-governmental organizations (NGOs), and (6) freedom of economic 

activities.48
47

Together, security and good governance serve as the foundation for economic 

development in stability operations because they provide the necessary elements for the 

rule of law to occur. Rule of law is a state in which “all individuals and institutions, public 

and private, and the state itself are held accountable to the law, which is supreme.”49 Rule of 

law is a necessary component for economic recovery and prosperity because it provides a 

systematic and legitimate way of ensuring freedom of movement to access public services 

such as education and health and ensures the safety and security of individuals, families, 

businesses and property.50 

While security, good governance, and the rule of law are the critical conditions for 

laying the foundation for economic development to come to fruition, Carl Shramm, the 

President of the Kauffman Foundation, argues that there are three additional requirements 

that help create long-term stability through economic development. The first is the 

existence of a financial system that is capable of providing capital funding to entities trying 

to start a business. The second element is government policies that avoid “rent seeking” or 

charging entities a fee or bribe in order to establish a business. Finally, the third element 

is government policies, which encourage entrepreneurial activity through the provision 

of government incentives for local businesses to innovate, adapt, and ultimately grow.51

These are all areas that the US military can affect when deployed in support of a stability 

operation. 

Finally, economic development policies and regulations must always consider the 

cultural norms of the host nation. Consideration of cultural norms is critical because without 

it, the military will never achieve the intended effect of the policy it is pursuing. According 

to Professors Steven Cornell of the University of Arizona and Joseph P. Kalt of Harvard 

University, any economic development policy must be adequate and appropriate in that 

it must adequately address the realities of the economic situation while being sensitive to 

the cultural norms of the society.52 During their research on American Indian economic 

development challenges, they discovered that:

[E]conomic development can take hold in the face of a wide range of cultural 

attitudes on such matters as the sanctity of natural resources or the propriety of 

individuals trying to make themselves wealthier. However, unless there is a fit 

between the culture of the community and the structure and powers of its governing 

institutions, those institutions may be seen as illegitimate, their ability to regulate 

and organize the development process will be undermined, and development will 

be blocked. Without a match between culture and governing institutions, tribal 

government cannot consistently do its basic job: creating and sustaining the “rules 

of the game” that development in any society requires.53

While there, the research focused primarily on American Indian economic development 

issues, their findings are relevant to any of the stability operations that the US Army has 

conducted in the past and will continue to conduct in the future. 

What Has the United States Done So Far?

In 2005, President George W. Bush signed Presidential Directive 44. The purpose 

of Presidential Directive 44 was to “promote the security of the United States through 
48

improved coordination, planning, and implementation and stabilization assistance for 

foreign states and regions at risk of, in, or in transition from conflict or civil strife.”54 It 

directed the Department of State to coordinate, integrate, and lead the US Government’s 

efforts to prepare, plan for, and conduct stabilization and reconstruction activities and to 

ensure “harmonization” with military operations across the spectrum of conflict.55 This 

directive also solidified the role of the S/CRS created in June 2004 to coordinate and 

synchronize the US government’s civilian response to reconstruction and stabilization 

efforts.

The S/CRS is a unique governmental organization that is intended to serve as the 

“hub” for the “whole of government” approach to stability and reconstruction operations. 

It is charged with forming a readily responsive Civil Response Corps that is globally 

deployable. The 4,250 member Civilian Response Corps will contain three distinct groups 

once it is fully formed: the Active, Standby and Reserve. The Active group will consist 

of 250 personnel who would be ready to deploy globally within 48-hours in support of a 

stability operation. The Standby group will consist of 2,000 federal employees and will be 

available to deploy within 30 days of a large crisis occurring for periods of 90 to 180 days.

56 The Reserve group, which is yet to be pursued, consists of 2,000 non-federal employees 

who would enlist for a year deployment during their four-year enlistment.By July 2010, the 

Civilian Response Corps had 100 Active and 900 Standby members and had deployed to 

twenty-eight countries to conduct assessments and conflict prevention focused primarily on 

the national or strategic level issues.57 It also started planning for a “whole of government” 

approach in future contingency operation by participating in strategic level exercises with 

the Geographic Combatant Commands. An example of this was S/CRS’ participation in 

US Africa Command’s (USAFRICOM) civilian-military exercise Judicious Response 

2010/2011. During this exercise, S/CRS worked with USAFRICOM to identify ways in 

which the military could support the Civilian Response Corps on the African continent.58 

While the Civilian Response Corps is a great idea to coordinate an overall “whole of 

government” approach for stability operations, there are three major concerns about its 

ability to execute its mission given its current resourcing. The first concern is its ability to 

deploy an adequate amount of personnel to conduct stabilization operations properly based 

its current 4,250-person structure authorization. If a contingency or group of contingencies 

lasting a year or more occurred, the Civilian Response Corps could only mobilize and 

deploy approximately 1,750 members from all three manning groups on a sustained basis.59

This equates to a little more than one US Army CA Brigade to coordinate all stability and 

reconstruction activities for the US government.60 This could prove to be greatly inadequate 

if the Civilian Response Corps is required to solely coordinate and conduct large-scale 

contingencies similar to those in Iraq and Afghanistan as well as other ongoing responses. 

Tackling these types of missions with their limited personnel availability could result in 

the Civilian Response Corps adopting the US Agency for International Development’s 

(USAID) model, which relies heavily on contractors to supplement their mission. This 

is dangerous because it could in essence morph the Civilian Response Corps into a 

“contracting” and “oversight” agency rather than an agency that brings critical knowledge 

and expertise to stabilization operations. 
49

The second area concerns the Civil Response Corps’ ability to respond rapidly to a 

situation based on its logistics capability. Because it lacks the robust logistical and security 

capability necessary to support its operations, it is clear that the Civilian Response Corps 

will likely not be as responsive as the military, particularly in austere environments that 

have uncertain or hostile populations. As a result, it is unlikely that the Civilian Response 

Corps will serve as the first responder to those global emergencies, which would leave an 

operational gap for the military to fill.61

Figure 1. Recommended Organization of a Provincial Reconstruction Team

Source: US Army Combined Arms Center, “Provincial Reconstruction Teams: Tactics Techniques and 

Procedures” Center for Army Lessons Learned Playbook (2007), 69.

The final area of concern revolves around the willingness of civilian personnel to 

deploy to unstable areas. While the 2007 Iraq example provided earlier in this monograph 

highlights this concern, there has been little to no movement by the federal government to 

rectify this issue. While there are penalties such as the repayment for any education and 

expenses the member incurred during their training as part of the Civil Response Corps, 

unlike the military, there is no way to compel someone to deploy into a less than stable 

location.62 Furthermore, once the civilian is deployed, it is hard to ensure that they will 
50

leave the security of their bases to execute their jobs responsibilities if security declines. In 

Iraq for example, “in particularly dangerous areas, civilian officials [would] frequently not 

leave military compounds for weeks or even months . . . [were] therefore almost completely 

ignorant of their surroundings, and rel[ied] heavily on the military or intelligence agencies 

for information on local events.”63 While some of the operational policy restrictions placed 

on civilians by their agencies exacerbate these shortfalls, the lack of in-depth security and 

response training and supporting capabilities also serve as a major contributive factor 

inhibiting success. 

Figure 2. Embedded Provincial Reconstruction Team Organization

Source: US Army Combined Arms Center, “Provincial Reconstruction Teams: Tactics Techniques and 

Procedures” Center for Army Lessons Learned Playbook (2007), 70.

Another area where the US has taken considerable efforts to increase its ability to 

conduct economic development in stability operations is the Provincial Reconstruction Team 

(PRT). Created in 2002 to support Operation ENDURING FREEDOM in Afghanistan, the 

PRT is an organization that has membership from the Department of State, Department of 

Defense, and other federal agencies such as the Departments of Agriculture and Justice. The 

PRT assists in coordinating the efforts of these different agencies to address the regional 

reconstruction efforts in both Afghanistan and Iraq at the provincial level. They assist in 

the development of “a transparent and sustained capability to govern, promoting increased 

security and rule of law, promoting political and economic development and providing 

provincial administration necessary to meet the basic needs of the population”.64 Figure 1, 

outlines the recommended organization of the PRT. 

To support reconstruction efforts below the provincial level and to assist the BCT, 

the concept of the Embedded Provincial Reconstruction Teams (ePRT) was developed 
51

in 2008. The ePRT concept provides the Brigade Commander with eight to twelve 

additional Department of State contractors and financial resources that can focus solely 

on the reconstruction and development efforts in his area of responsibility. In addition to 

its civilian membership, the ePRT also has a CA Officer to help coordinate the localized 

stability and development efforts.

While PRTs have received numerous accolades from the field for assisting in the 

success in Iraq, some significant concerns remain about their long-term viability. The first 

concern revolves around the regional and cultural knowledge that a member of a PRT 

brings, particularly now that the Department of State is beginning to rely more heavily on 

contractors to fill its personnel requirements. According to a study conducted by the United 

States Institute of Peace, “many of these contractors did not have previous field experience 

in the Middle East or had not previously worked on overseas development projects.”65

Thus, it typically took time for the ePRTs to understand the culture to a level where it could 

initiate economic development projects and provide governmental policy recommendations 

that fit Cornell and Kalt’s standards for being both adequate and appropriate. The second 

major concern is that the PRT is an ad hoc organization. The assignment of military 

officers to fill these crucial positions is often based on their availability and not on any 

sort of development expertise or educational background, they may have. Additionally, 

the failure to institutionalize the PRT organization fails to establish effective long-term 

training programs and exercises similar to those that other institutionalized organizations 

complete such as rotations at the Army’s National Training Center. Finally, the operational 

availability of civilian experts remains a major concern. Because there is such a heavy 

reliance on the civilian sector to provide the necessary development expertise, many of 

the concerns about their willingness to leave the safety and security of their bases remain. 

The US Marine Corps realized this concern in the summer of 2009 during Operation 

PANACHAI PALANG in Afghanistan when they cited a near total absence of civilian 

reconstruction experts to support their efforts into Helmand Province, forcing them to shift 

personnel from other areas to fill this personnel void.66 

To support the reconstruction efforts in Afghanistan and Iraq, military units 

and PRTs have access to different funding sources. One of the unique sources is the 

Commander’s Emergency Relief Program (CERP) that the Coalition Provincial Authority 

in Iraq created in 2003.67 The Commander’s Emergency Relief program enables “local 

commanders in Afghanistan and Iraq to respond to a non-lethal weapon to urgent, smallscale, humanitarian relief, and reconstruction projects and serves that immediately assist 

the indigenous population and the local population or government can sustain.”68 While 

CERP was originally intended to be used as a stabilization tool after the US toppled Iraq’s 

Ba’ath Party in 2003 and was funded using seized assets from the Saddam Hussein regime, 

it has, over the years, become an integral part of the US approach to funding projects during 

Phase IV operations in both Iraq and Afghanistan. Since 2003, the United States Congress 

has appropriated more than $3.8 billion for CERP funding to support operations in Iraq.69

While CERP only equates to approximately seven percent of the $53.8 billion in total US 

reconstruction appropriations for Operation IRAQI FREEDOM, it has forced the DoD to 

become involved in all aspects of stability operations, to include economic development.70
52

Within the $3.8 billion appropriated, approximately sixty percent, or $2.28 billion of the 

funds spent had direct ramifications on the economic development efforts in Iraq.71 

The purpose of CERP is to allow Army units the ability to conduct small-scale projects 

that are less than $500,000 that produce a positive and recognizable impact in a unit’s area 

of responsibility.72 Projects funded with CERP should focus on improving local security, 

restoring essential services, reconstructing infrastructure damaged by combat operations, 

or conducting economic development in an area. While these areas are generally broad, 

the DoD has limited CERP expenditures to eighteen primary areas. Table 2 provides a 

description of those areas, the aggregate amount and associated percentages of CERP fund 

obligated to each area through July 2010. 

Table 2. CERP Expenditures through July 2010

Authorized Area Purpose

Amount of CERP 

Obligations 

through July 2010 

(millions)

Percentage of 

CERP Obligations 

through July 2010

Water and sanitation Repair or reconstruct water or sewer infrastructure, including water wells. $690.2 20.3%

Protective measures Fences, lights, barrier materials, berms over pipelines, or guard towers. Includes Temporary 

Contract Guards to guard critical infrastructure. $476.8 14.0%

Electricity Repair or reconstruct electrical power or distribution infrastructure, including generators. $381.5 11.2%

Transportation Repair or reconstruct transportation systems, roads, bridges, or transportation infrastructure. $357.2 10.5%

Education Repair or reconstruct schools, purchase school supplies, or equipment. $339.9 10.0%

Civic cleanup activities Remove trach, clean up the community, or perform beautification. $207.5 6.1%

Other humanitarian or 

reconstruction projects

Repair collateral damage not otherwise payable because of combat exclusions or condolence 

payments. $174.0 5.1%

Economic, financial and 

management improvments Improve economic or financial security. $137.2 4.0%

Agriculture Increase agricultural production or cooperative agricultural programs. Includes repair or 

reconstruction of irrigation systems, including canal cleanup. $122.3 3.6%

Rule of law and governance Repair or reconstruct government buildings such as administration offices, courthouses, or 

prisons. $120.6 3.6%

Healthcare Repair or reconstruct hospitals or clinics or to provide urgent healthcare services, immunizations, 

medicine, medical supplies, or equipment $112.6 3.3%

Repair civic and cultural facilities Repair or restore civic cultural buidings or facilities. $104.5 3.1%

Condolence Payments

Compensate for death, injury, or property damage resulting from U.S., coalition, or supporting 

military operations. Includes Survival payments to compensate surviving spouses or next of kin 

of Afghan or Iraqi defense or police personnel who were killed as a result of U.S., coalition, or 

supporting military operations.

$50.8 1.5%

Battle Damage Repair Reoaur damage that results from U.S., coalition, or supporting military operations that is not 

compensable under the Foreign Claims Act. $44.1 1.3%

Telecommunications Repair or reconstruct telecommunications systems or infrastructure. $32.6 1.0%

Civic support vehicles Purchase or lease vehicles to support civic and community activities. $24.6 0.7%

Food production and distribution Incresase food production or distribution processes. $17.4 0.5%

Detainee Release Payments Payments to individuals upon release from detention (only applies to Major Subordinate 

Commands) non-theater internment facility holding areas). $1.4 0.04%

Source: Author Created based on data from Special Investigator General for Iraqi Reconstruction 

(SIGR), Quarterly and Semi-Annual Report to the United States Congress (Washington, DC: 

Government Printing Office, 2010), 39, and US Army Combined Arms Center, “Commander’s Guide 

to Money as a Weapon System,” Center for Army Lessons Learned Handbook 09-07 (2009), 17.

Despite the fact, there are several uses for CERP funds, economic development and 

reducing unemployment are two central goals for its use. By funding humanitarian relief 

and assistance projects with CERP funds, the US military is not only providing basic needs 
53

to the population, it is helping the host nation avoid the phenomenon Keynes coined as 

“paradox of thrift.” The military accomplishes this through infrastructure investment and 

by creating short-term demand for goods and services needed to support humanitarian 

relief and assistance efforts. While this approach is critical in the early phases of a postconflict environment, the US Army should also facilitate long-term economic stability by 

helping individuals gain access to capital markets. In pursing this goal, the DoD developed 

the Micro-Grant Program, which is a variant of micro-financing. Although microfinance 

is ineffective in resolving conflicts in active war zones, it does play an important role in 

Phase IV operations. The importance of micro-financing during the transition from conflict 

is articulated in a 2007 USAID study in which, micro-finance, “in the early phases of postconflict stabilization and reconstruction can provide an effective means of both providing 

direct support to some of those most affected by conflict and laying the foundations for 

building permanent local financial institutions that will serve the poor in the long-term.”73

The purpose of the CERP Micro-Grant Program is to help disadvantaged entrepreneurs 

who are pursuing small or micro-business activities, which support humanitarian relief or 

reconstruction efforts. It provides individuals who do not have the necessary capital with 

access to funding that they otherwise would not be eligible for if they had to apply in the 

commercial market.74

While some consider the micro-grant program as one of the most successful components 

of CERP, the current program fails to maximize its true long-term potential. This is because 

it limits access to capital to only those entrepreneurs that provide goods and services to the 

traditional humanitarian relief and assistance sector. It discounts other viable economic 

sectors that provide innovative or imitative goods and services that could otherwise thrive 

if it had the necessary investment capital. The micro-grant program also fails to realize its 

long-term potential because it is relies solely on grants and not on loans or even a mixture 

of the two. Because there is no repayment of a micro-grant, the US military’s long-term, 

economic development potential essentially stops and relies solely on the success of the 

business that received the grant. If the business fails, the money is lost. On the other hand, a 

micro-loan program would allow the long-term development potential to continue growing 

by continuing the financing of additional small businesses using the money repaid from the 

initial investment. This ultimately would expand the long-term development potential of 

the investment. Nobel Laurite Muhammad Yunus demonstrated the success of this type of 

program when he founded the Grameen Bank in India.

In his use of micro-loans, Yunis established a socially accepted structure that was 

relatively simple, relied on mutual trust, and was culturally sensitive. First, the structure 

or terms of Grameen Bank’s loans was simple in that they lasted for only one year and 

borrowers were expected to pay weekly installments that equated to approximately two 

percent of the total loan starting one week after the loan was issued.75 Second, it required 

that each prospective borrower join a group of like-minded people from similar economic 

and social backgrounds to create a support network and to make each borrower more 

reliable through peer pressure. Peer pressure was a key component because it provided 

incentive for those in the group to repay their loans. If a member of the group failed to pay, 

future loans to others in the group would be rejected until the original loan was repaid.76
54

This type of organization has resulted in a 97.2 percent repayment rate.77 Third, it was 

culturally sensitive in that it operated within the constraints of Sharia Law which forbids 

banks from charging borrowers interest. Since each borrower was part of a group that was 

formally recognized by the bank, they were viewed as part owners. 78 Furthermore, because 

the Grameen Bank established policies that were both culturally acceptable and adequate, 

the bank eventually grew to serve more than 8.3 million people, ninety-seven percent of 

which are women, in over 100 countries.79

While this monograph is not advocating that the US Army enter into the banking 

business system, it is arguing for more effective use of CERP funds. Rather than simply 

using grants, the Army could foster a micro-loan program by helping the host nation 

establish an organization similar to the Grameen Bank and later provide it with the 

necessary starting capital. The Center for Agriculture and Rural Development (CARD) in 

the Philippines serves as a salient example of this type of arrangement. This organization 

initially faced difficulties finding organizations that could provide for financial sourcing. 

Yet, once CARD secured financing, the program took off. In less than seven years, ninetyseven percent of CARD borrowers invested in income-generating activities that created on 

average 163 days of employment for its borrowers and an eighty-four additional days for 

their family members. It has also resulted in an approximate 36 percent increase in wages 

over the prevailing local rate.80 By approaching economic development in this manner will 

help to ensure that economic development efforts have a lasting effect. 

Army Support to Stability Operations

In The Utility of Force: The Art of War in the Modern World, British General Rupert 

Smith argues that there is not a generic “military force.” Rather, there are components of 

specialized forces that can be selected for specific purposes.81 This statement is especially 

true when it comes to dealing with many of the complex civilian problems a military unit 

faces in stability operations. In dealing with this problem, some advocates argue that the 

US Army’s force structure should be bifurcated to contain “warfighters and peacekeepers.” 

While this type of approach would resolve many of the tensions within the Army regarding 

training focus and resourcing, the financial costs of this option and the domestic economic 

realities of today make this option largely untenable. Rather, adroitly focusing Army units 

in the Army Force Generation Model (ARFORGEN) as well as comprehensively reforming 

the Army’s organizational structure, doctrine, and education system, to address many 

of the stability challenges of tomorrow within the current budgetary and force structure 

allocations.

One way that the Army is attempting to approach increasing its effectiveness in stability 

operations is through the regional alignment of BCTs with each of the five overseas Global 

Combatant Commands (GCC).82 To understand this approach, one has to understand 

how the Army goes about identifying, training, manning, and equipping its forces using 

the ARFORGEN model first. The ARFORGEN model is “the structured progression of 

increased unit readiness over time, resulting in recurring periods of availability of trained, 

ready, and cohesive units prepared for operational deployment in support of civil authorities 

and combatant commander requirements.”83 The intent of this supply side model is to 
55

provide the nation with a continuous and predictable amount of trained and ready forces to 

deploy in support of global contingencies. 

In this model, every unit’s life cycle begins in the Reset Pool. When a unit is in 

this pool, it begins to build its organization through the reception of new personnel and 

equipment and begins to train on individual tasks. Once the unit receives key personnel 

and equipment, it moves to the Train/Ready Pool. In this pool, the unit continues to receive 

personnel and equipment and begins to train on collective tasks that affect the entire 

unit. The unit remains in the pool unit it is proficient for its future mission and completes 

culminating collective training exercise, validating its readiness to deploy. Once validated, 

the unit moves into the Available pool where it either deploys or is remains ready in the 

United States to support a global contingency. 

Figure 3. Army Force Generation Model

Source: Headquarters, Department of the Army. 2010 Army Posture Statement. (Washington, DC: Government 

Printing Office, 2010), F-1.

Because the ARFORGEN model is cyclic in nature, the speed that the units move 

through the model can vary based on the operational demand. It is measured using boots 

on the ground (BOG) to time at home, or dwell, ratio. For instance, in the 2007, the global 

demand for BCTs was approximately 27 out of the 72 total BCTs to meet the operational 

requirements for all global contingencies, to include OIF, OEF, Korea, Horn of Africa 

missions, etc. Within the total twenty-seven BCT demand, nineteen were from the Active 

Component (AC). As a result, the AC BCT BOG-to-Dwell ratio was one-to-one.84 This meant 

that for every twelve months deployed, a BCT, on average, would receive approximately 

twelve months at home. A one-to-one BOG-to-Dwell ratio is highly unsustainable for the 

protracted conflicts the US is currently operating within for numerous reasons such as unit 

preparedness, individual stress, and equipment availability. To alleviate the stress on the 

force, the Secretary of Defense, through the QDR has established goals of a one-to-two 
56

BOG-to-Dwell ratio for Active Component units and a one-to-four BOG-to-Dwell ratio for 

Reserve Component (RC) units.85 The Army has increased the time at home by stating in 

2010 Army Posture Statement that its goal is to achieve a sustainable BOG-to-Dwell ratio 

of one-to-three for the AC and a one-to-five BOG-to-Dwell ratio for the RC.86

The implementation of regionally aligning BCTs would require identification of the 

BCT while it was in the Reset pool. In this pool, the BCT could receive unique equipping, 

manning, and training to either conduct stability operations, security forces assistance, or 

participate in partnership exercises in each of the GCC’s area of responsibility. They will 

receive mission unique equipment and cultural and language skills that will help ensure 

the BCT is trained to maximize its effectiveness. Additionally, the BCT regional alignment 

plan receives further enhancement through the re-alignment of a Special Forces Group to 

each of the GCCs.87 While it is apparent that the regional alignment strategy should not be 

implemented until demand in OIF and OEF is reduced, this type of strategy will greatly 

enhance the GCC’s ability to employ the best led, staffed, and equipped forces in pursuit of 

their regional strategic objectives. 

In his 2007 white paper “Adapting our Aim: A Balanced Army for a Balanced Strategy,” 

the Army Chief of Staff, General George Casey Jr., outlined six defining qualities that 

will enable the US Army to meet the operational challenges of the twenty-first century: 

versatile, expeditionary, agile, lethal, sustainable, and interoperable. In outlining these 

qualities, he states, “versatility is the central organizing principle of a balanced Army, 

for it is this quality that will enable our forces and institutions to effectively execute 

operations across the spectrum of conflict.”88 In pursuit of this goal, the US Army has taken 

considerable steps in trying to adapt its force structure. Since 2004, the Army has “taken 

between 175,000 and 200,000 [personnel] spaces away from skills that were very necessary 

in the Cold War and have converted them into skills that are more relevant today.”89 This 

equates to the conversion of approximately 200 tank, air defense, and artillery units to a 

corresponding number of CA, Psychological Operations, Special Forces, and Engineer 

units.90 Yet, there are several organizational, doctrinal, training, and personnel challenges 

that continue to impede the Army’s forward momentum in fully developing institutionally 

supported stability capabilities. 

Organization

The majority of the Army’s specialized stability and reconstruction capabilities reside 

within CA because it is responsible for providing the military commander with expertise 

in areas ranging from foreign humanitarian assistance to on nation assistance and support 

to civil administration.91 After the Vietnam War, political and fiscal factors drove former 

Chief of Staff of the Army General Creighton Abrams to place the majority of the Army’s 

CA capability into the reserve component, where it remains today.92 The RC force structure 

consists of four Civil Affairs Commands (CACOM) that support four of the five overseas 

GCCs: US European Command (USEUCOM), US Central Command (USCENTCOM), 

US Southern Command (USSOUTHCOM), and US Pacific Command (USPACOM). 

The RC also has eight CA Brigades, twenty-eight CA Battalions, and 112 CA Companies. 

The AC force structure consists of two Brigades. The 95th CA Brigade consists of three 
57

battalions and supports US Special Forces Command. The 96th CA Brigade supports the 

general-purpose force and consists of four battalions to provide some level of regional 

alignment, similar to the CACOMs. In addition to these two AC CA Brigades, the Army 

recently decided to build the 86th CA Brigade to support the general-purpose force. While 

superficially this force structure appears adequate, there are several areas, which, if 

adjusted, could greatly improve the overall effectiveness of the Civil Affairs Branch to 

conduct economic development.

The distribution of AC and RC units must be re-balanced to ensure long-term readiness 

and responsiveness of the CA units. The problem with having majority of CA force structure 

in the Reserve Component is that they are not as responsive as active duty organizations. 

Typically, a reserve unit requires approximately sixty days to mobilize upon notification, 

which may delay their arrival until long after they are needed during Phase IV operations. 

Another concern is the high demand of these units is requires increased disruption to the 

civilian lives of its Reserve Soldiers, which in the long-term is politically untenable. In 

Fiscal Year 2010, the United States Army Reserve (USAR) CA BDE Headquarters cycled 

through the ARFORGEN cycle at a one-to-one point one BOG-to-Dwell ratio; meaning 

that units received only thirteen months and six days at home for every year they were 

deployed.93 This ratio is well below the QDR stated BOG-to-Dwell goal of one-to-four. 

It is evident by the current trends projected in the Joint Operating Environment that 

operational demands for the military will not decline as land forces continue to focus on 

engaging more countries to help them build capacity to deny insurgents areas to operate.94

General Casey reiterated this belief in April 2010 when he stated that the Army would 

have approximately 50,000 to 70,000 troops deployed for the near future.95 This equates to 

approximately ten BCTs. Therefore, it is safe to assume that there is going to be a sustained 

demand for the unique stabilization capabilities that CA units provide. In 2010, Major 

Samuel Kyle Simpson examined this question and concluded the annual aggregate demand 

for supporting expected global contingencies for CA units would equate to 16.8 Company 

equivalents, 4.8 Battalion Headquarters, and 1.3 Brigade Headquarters.96

To meet the anticipated future global CA demands and to reduce reliance on the 

RC, the Army should grow four additional AC CA Brigades. Because the Army’s Active 

Component end-strength is limited to 547,000 personnel, the Army can accomplish this 

growth by converting more expensive and conventional capabilities into RC capabilities 

to free up personnel spaces. This monograph advocates accomplishing this task through 

the conversion of two Heavy Brigade Combat Teams (HBCT) from the AC to the RC and 

converting four CA Brigades and other critical enabling capabilities such as Engineers from 

the RC to the AC. This type of conversion will also do three things. First, it will relieve 

the stress on the Reserve Component by allowing the Active Component to shoulder more 

of the operational demand requirements for Civil Affairs. Second, it will provide enough 

AC force structure to allow each AC CA Brigade to focus its training, education, and 

recruiting efforts regionally. It will also allow the AC CA Brigade to provide the necessary 

continuity needed to oversee long-term development projects within these regions. Finally, 

it will provide the additional AC personnel slots to develop and build additional economic 

stability sections that will be discussed later in this section. 
58

Table 3. Alternative BCT Force Mix

Source: Author created.

The HBCT is an excellent candidate for this type of conversion because it accomplishes 

four things. First, it does not change the total number of HBCTs that would be available 

to deploy in support of a large-scale contingency such as OIF. Second, it does not greatly 

diminish the US Army’s global responsiveness. Because the HBCTs are reliant on strategic 

sealift to deploy, the amount of time that it would take for the flotilla to return to the US 

after delivering the initial entry forces would provide adequate time for these RC HBCTs 

to prepare to deploy. Third, it has a negligible effect on how many HBCTs are produced 

in the ARFORGEN cycle. At a one-to-three AC BOG-to-Dwell cycle, the Army can still 

produce four HBCTs. Finally, at a ten BCT demand, the Army can still meet its one-tothree AC and one-to-five RC BOG-to-Dwell rates if this conversion is executed. It will 

degrade the AC BCT dwell by approximately ninety-three days97 while increasing the RC 

BCT dwell by approximately 162 days.98 While this will reduce the deployment of reserve 

CA personnel who will deploy and bring with them critical experience and expertise that 

could help in economic development, long-term utilization of these personnel will become 

more politically untenable if the US remains in a protracted conflict as predicted by the 

national strategies. 

Table 4. BOG-to-Dwell Implications

Source: Author created.

To help it integrate itself within the Army organizational structure, CA aligns 

itself organizationally within the various levels of the Army command structure. The 

Civil Affairs Commands (CACOM) provide theater-level CA planning, coordination, 

policies, and programs to support stability operations through their alignment with the 
59

Combatant Command.99 Below the CACOM, the CA Brigade supports the Corps and the 

Battalion supports the Division. While this type of support structure is beneficial at the 

Combatant Command Level, it does not provide the same level of operational fidelity 

at the Operational level where strategic guidance is translated into tactical actions. One 

way to increase operational fidelity is to allow the CA Brigade to support the Army 

Service Component Commands, or Theater Armies, directly. This will not only provide 

greater situational awareness for the CA Brigade (BDE), but it will also help facilitate 

and operational deployment. When an operation occurs and the Army Service Command 

employs its deployable Contingency Command Post (CCP), the CA BDE can deploy a 

fully integrated contingency planning cell that has full understanding of the country as well 

as the operational plan.100

Figure 4. Army Civil Affairs Support Relationship

Source: Adapted from figure 2-2, Headquarters, Department of the Army, Field Manual 3-05.40: Civil Affairs 

Operations (Washington, DC, 2006) 2-5.

Within each of the four CACOMs, there are three functional specialty cells split 

into six sections. One of these sections is an economic stability section. The economic 

stability section is important because it provides the Geographic Combatant Commander 

with critical insights of the economic situation of a country. Manned with economic and 

business specialists, the economic stability section provides critical economic insights 

for the development of plans, policies, and procedures for establishing economic and 

commercial systems. The sections are capable of providing technical expertise to assist 

in the identification and assessment of food and agriculture systems, provide advice on 

the reestablishment of budgetary systems, monetary policy, treasury operations, and 

counter-inflationary measures such as price control and rationing programs.101

While this cell provides the Geographic Combatant Commander with economic 

advice to help in the development of strategic level policies, this essential capability is 

not present at either the tactical level or the operational level where strategic guidance 
60

is translated into tactical actions. As a result, the commands at these levels have to 

create ad-hoc organizations, typically by moving personnel with some level of economic 

background from their military specialty to fill this void. While this approach may work 

in some situations, there are two significant downsides to this approach. The first is 

that the Commander may not always have someone with the necessary expertise to 

understand the economic development challenges that the unit faces, which over time 

may worsen the problem. The second downside is by taking personnel from their assigned 

responsibilities, the Commander is assuming some inherent risk to his operation in areas 

from where they pull people. A way to mitigate this risk is by establishing an economic 

stability section in each of the CA Brigades, Battalions and Companies to integrate with 

the other four specialty cells. Executing this course of action would require approximately 

600 additional AC personnel spaces, which would be within the personnel authorizations 

of this conversion strategy.102

Figure 5. Functional Specialty Cell Organization

Source: Adapted from figure 2-4, Headquarters, Department of the Army, Field Manual 3-05.40: Civil Affairs 

Operations (Washington, DC, 2006) 2-7.

Doctrine

Joint Publication 1-02: Dictionary of Military and Associated Terms defines doctrine 

as the:

fundamental principles by which the military forces or elements thereof guide their 

actions in support of national objectives. It is authoritative but requires judgment 

in application.03

Doctrine is important because it provides the Army with guidance, a common 

understanding, and a generalized way of approaching a situation. First, it helps guide the 

Army in determining what type of force structure and technologies to purse. Second, it 

provides a forum in which lessons from past operations can be recorded and disseminated. 

Third, it provides a foundation for how the Army conducts business in an operation by 

providing standardized approaches to a problem.104 The purpose of doctrine should be to 

give a baseline understanding of how to approach a mission. Doctrine should not direct 

specific solutions or be prescriptive in providing solutions for specific problems. Rather, it 

should be generalized and provide abstract conceptual understanding for how to approach 
61

a problem. Prescriptive solutions and understanding should occur through mentorship or 

professional military education, which gives the individual the necessary experience to be 

reflective and approach the problem from different perspectives. 

While the need for economic development is identified in nearly all of the Army’s 

major doctrinal field manuals to include Field Manual (FM) 3-0: Operations, FM 3-28: 

Counterinsurgency, and FM 3-05.40: Civil Affairs Operations, FM 3-07: Stability 

Operations provides the greatest conceptual insights into how an Army unit should go 

about conducting economic development. It provides military personnel with a generalized 

understanding that economic development efforts should integrate with efforts in 

governance and security, particularly at the local level. It highlights the importance of 

restoring the physical infrastructure of the host nation to facilitate the transfer of goods and 

services as well as the need to support the host nations central monetary institutions and 

treasury operations. Finally, FM 3-07: Stability Operations also discusses the importance 

of supporting private sector and agricultural programs. Yet, unlike other field manuals that 

help provide both detail and general understanding, FM 3-07: Stability Operations focuses 

solely on the general description at the strategic or national level. It provides little insights 

into how a BCT, CA Brigade, or any Battalion should approach economic development in 

their area of operation. As a result, military personnel seeking to understand how they can 

lead their units in an economic development mission are forced to look elsewhere. 

One place where individuals can look is to the Center for Army Lessons Learned. 

This organization periodically publishes Handbooks and Playbooks that disseminate 

tactics, techniques, and procedures in areas ranging from the establishment of a Provincial 

Reconstruction Team to Agribusiness Development Teams. Although the Handbook 10-10 

Agribusiness Development Teams, provides some excellent insights on areas to train prior 

to deployment, the majority of these books focus on administrative tasks such as filling out 

paperwork, approval cycles, and funding rules versus providing insights on best business 

or employment practices. 

Although some critics of economic development believe the Army should not invest 

time or resources in writing this type of doctrine in favor other manuals that could have 

greater value, or because they believe the US Army should not have a part in economic 

development, they are failing to recognize the increasing use of the military for stability 

operations. Because the US Army is not going to untangle itself from stability operations 

that include an economic development aspect for the foreseeable future, it is critical that 

the Army develop a field manual that fills this void. While there is never a “one size fits 

all” approach to economic development, a manual that provides insights into economic 

development is significant. First, it provides the necessary detail and understanding to 

implement the national level economic development tasks outlined in Table 1 successfully. 

Second, it will provide guidance on how to approach entrepreneurial economic development 

at the local level. Third, it will significantly influence the bureaucracy and funding 

authorities that enable this type of mission. Finally, it will codify many of the lessons and 

economic development approaches borne out of nine years of stability operations in Iraq 

and Afghanistan. 
62

Training and Education

In examining some of the lessons learned from Iraq and Afghanistan, more commanders 

and senior officers highlighted the significance of economic development and its importance 

on the national and local economies.105 Lieutenant General Robert Caslen Jr., a former 

Commander of the 25th Infantry Division cogently summarized this belief when he stated: 

[f]rom a division commander who had responsibility for the seven northern 

provinces of Iraq here recently, we had an economic line of effort and we put a 

lot of energy into the development of the economy through CERP or starting new 

businesses . . . if I had had this background, and if our officers had had this training, 

this was exactly the kind of thing we need to go into these kinds of operations.106

Over the past nine years, the Army has taken some considerable steps in trying to 

educate its force on the importance of good governance and cultural awareness, which 

as discussed earlier, are critical components for successful economic development. It has 

established the West Point Center for the Rule of Law, which is dedicated to promulgating 

the idea of rule of law in both peacetime and conflict. It has established the Judge Advocate 

General’s Legal Center and School to provide members of other federal agencies with an 

academic understanding of the rule of law. The Army also established the Center for Law 

and Military operations to collect the lessons learned from past operational experiences 

with the rule of law in order to publish them to those deploying in support of a contingency 

operation.107

Culturally, the Army has taken some positive steps as well. To begin developing future 

leaders who are culturally sound and have a strong foundation for high demand languages, 

the Army has begun to give incentives to Reserve Officer Training Corps cadets to take 

language courses as part of their undergraduate studies. It has also begun to institute and 

encourage enrollment in online language programs such as Rosetta Stone©. Finally, Officers 

identified for deployment in OIF or OEF are required to take language training if they are 

attending one of the Army’s professional development schools. 

While these schools have provided insights into the cultural and governance aspects of 

stability operations, a void remains when it comes to teaching economic development to the 

overall officer population. In examining the officer professional development system there 

is little to no economic development education for company grade and field grade officers 

who are the most likely to encounter economic development at the local and province level. 

When an officer is commissioned after the completion of their undergraduate studies, they 

attend the Officer Basic Course (OBC). The OBC is intended to provide specialty and some 

general training to prepare the officer for their future jobs as a Platoon Leader. Once the 

officer is selected for the rank of captain, they attend the Captains Career Course (CCC) 

which builds upon the education they received in OBC by providing the officer with more 

in-depth specialty training as well as some non-branch specific they will need to execute 

their future job as a company commander. This training typically includes equipment 

accountability and instruction on the Uniform Code of Military Justice. Once the officer 

attains the rank of major, they attend Intermediate Level Training (ILE) at the Command 
63

and General Staff College (CGSC). Intermediate Level Training provides the officer with a 

broad level of non-branch material instruction that focuses on Joint and Army operational 

planning, history, leadership and tactics. 

At all of these schools, there is an emphasis on conducting stability operations but 

primarily focus on the security or military aspect. For example, the economic development 

education that majors attending the ILE program received during their core instruction 

focused solely on the bureaucratic rules of how to request, dispense, and account for 

funds from the CERP.108 While this is important for accountability, the failure to provide 

some basic instruction on entrepreneurism or business development is a huge missed 

opportunity. Recently, CGSC developed some classes such as “Expeditionary Economics” 

and “Economic Instrument of Power” to provide exposure to economics. Although the 

enrollment opportunity for these classes was limited to approximately three percent of 

the population based on resourcing, this is a step in the right direction.109 The Army and 

CGSC can take this to the next level by developing an economic development program 

of instruction similar to the joint planner, space activities, or strategist programs already 

taught to expose the general officer population to economics. 

One way that this can be accomplished is through the development of a generalized 

economic development Army Skill Identifier (ASI). The ASI is a way that the Army 

trains and later identifies Soldiers with skills beyond their basic military specialty. There 

is currently a 6C “economist” ASI, but it focuses primarily on those serving within the 

specialty functional cells of a CA unit. It requires a “[m]asters degree in economics, finance, 

international business, or business administration and/or a minimum of 5 years civilian 

experience in economics, banking, public finance, or foreign/domestic development 

or a related field”. 110 While these types of qualifications are critically important for CA 

personnel, particularly in the economic specialty cells, it fails to provide the general officer 

population with the opportunity to gain tangible economic development understanding in 

order to improve their units’ capabilities and performance in stability operations. To fill this 

void, the Army should develop a “tactical economic developer” ASI program that provides 

basic understanding entrepreneurial and small business development strategies, innovative 

and imitative economic development strategies, and neighborhood development strategies. 

All of these types of courses can be taught at CGSC similar to the three programs discussed 

earlier. Doing so will increase the number of officers with the basic skills, insights, and 

approaches for tacking economic development issues at the tactical or local level. 

Economic development training should also be a focal point for the Civil Affairs CA 

School to ensure that all active and reserve component Civil Affairs Soldiers are certified to 

some level. According to Edward Burke, a researcher at the Spanish think tank Fundación 

para las Relaciones Internacionales y el Diálogo Exterior or FRIDE, Reserve CA officers 

“often lack training in political and linguistic skills, as well as an advanced knowledge of 

their local environment upon deploying to Iraq and Afghanistan.”111 In conjunction with 

the formal military education provided by the Civil Affairs School, the Army should also 

focus the type of education Soldiers receive when pursuing a master’s degree as part of its 

Advanced Civil Schooling (ACS) program. While there are some branches in the Army 
64

that direct the study program for its participants, the majority of them do not. As a result, 

educational experience that would be mutually beneficial to both the officer and could 

provide the Army with broader economic or business development knowledge is lost. 

In trying to improve its Soldiers understanding of the interagency and the private sector, 

the Army has instituted several strategic relationships with other federal agencies, think 

tanks and private institutions. Examples of these include fellowships at the Department of 

State, Arroyo Center, and the United States Congress. While these opportunities are greatly 

beneficial to those officers that attend, participation is limited to a small handful of officers. 

To rectify this problem, the Army should further expand these opportunities by establishing 

standing assignments that qualified Civil Affairs Soldiers can fill which directly related to 

economic development. By expanding training opportunities with federal agencies such 

as USAID and the Departments of Commerce, Trade, Agriculture, and Treasury and with 

private and non-governmental organizations such as the Grameen Bank, US Chamber of 

Commerce, Kauffman Center, and the International Agency for Economic Development, 

Soldiers will gain critical economic development insights that they can bring back to the 

Army. 

Conclusion

The current environment that the United States exists is one, which will require greater 

commitment to stability operations if it is going to secure its interests abroad adequately. 

Doing so will require a greater understanding and ability to skillfully employ economic 

development as a way to achieve long-term stability. Since the end of the Cold War, 

the United States Army has clearly demonstrated that it understands and can effectively 

conduct conventional operations. Yet, the conflicts the Army currently faces and will for 

the foreseeable future will require non-conventional understanding to effectively execute 

stability operations or counterinsurgency operations. These types of missions are less 

familiar and require understanding of factors other than military force to include governance, 

information, tribal influence, religion, history, culture, and economic development. 

In a 2010 article discussing the military’s attempts to cope with the complex operational 

issues presented in stability operations, the Chairman of the Joint Chiefs of Staff, Admiral 

Michael Mullen stated, “[t]his just strikes at the heart of something I’ve thought for a long 

time: It’s all about economics.” 112 Yet, the Army is currently ill-prepared to deal with this 

central issue because it is apprehensive to formalize, institutionalize, and build upon the 

lessons that it has gained over the past nine years in the conflicts in Iraq and Afghanistan. 

As a result, extensive familiarity and understanding of the complex environments presented 

in both counterinsurgency and stability operations could be lost. Instead, the Army seems 

to be relying on the “whole of government” approach as a silver bullet solution so it can 

disengage from developing and institutionalizing many of the “uncomfortable” capabilities 

in favor of traditional military capabilities. 

While the “whole of government” approach is a lofty one, the realities of largescale contingencies indicate that organizations such as the Civilian Response Corps will 

not absolve the US Army from an economic development role in stability operations. 

Experiences with this type of approach demonstrate that it will not achieve its full 
65

expectations until a fully secure environment is established. As demonstrated in both Iraq 

and Afghanistan, while civilian economic development experts bring significant expertise 

to a stability operation, they are continually apprehensive about venturing into uncertain 

or hostile environments. Therefore, it is incumbent upon military to fill this operational 

gap in order to seize and exploit potential opportunities to lay the foundation for long-term 

economic development in these situations. 

While the Army has taken some considerable steps in adapting its force structure 

to provide better cultural awareness and focus for its BCTs to conduct security forces 

assistance under the regional alignment plan, it must also do so in its non-traditional 

military capabilities as well. By developing doctrine that addresses many of the economic 

development questions presented in local and by providing officers and non-commissioned 

officers with some basic understanding of economic theory and development approaches 

in their professional education, the Army can improve its overall effectiveness in stability 

operations. The Army can take another significant leap in establishing a balanced force for 

the twenty-first century that is able to respond to global contingencies by growing its active 

CA capabilities. By converting two HBCTs from the AC to the RC and converting four 

CA brigades and other critical enablers from the RC to the AC, the Army will be able to 

shoulder more operational demands while developing and sustaining the necessary regional 

expertise and long-term development oversight necessary to support the Geographic 

Combatant Commands more effectively. 

In their book Military Misfortunes, Eliot Cohen and John Gooch identify three kinds 

of failure that military organizations encounter: failure to learn, failure to anticipate, and 

failure to adapt. They argue that when two or more failures occur at the same time, it is an 

aggregate failure that can have catastrophic effects.113 It is apparent, based on the current 

trends and projections provided by the CCJO, that technology, globalization, urbanization, 

and weak or failing states, as well as competing international narratives that will require 

the military to possess in-depth knowledge and experience in each of the instruments of 

power; to include the economic instrument of power. Although the Army has anticipated 

this requirement, continued reluctance to learn and adapt its organization could result in 

the Army relearning these lessons the same way it did in both Iraq and Afghanistan – the 

hard way.
66

Notes

1. John F. Kennedy, “Remarks at West Point to the Graduating Class of the US Military 

Academy,” John F. Kennedy Library, June 6, 1962. http://www.jfklibrary.org/Asset+Tree/

Asset+Viewers/Audio+Video+Asset+Viewer.htm?guid={71B1B505-C400-4CA5-8CE8-

2C36BC2618F0}&type=Audio (accessed December 7, 2010).

2. Richard F. Grimmett, CRS Report for Congress: Instances of Use of United States Armed 

Forces Abroad, 1798-2007 (Washington, DC: Congressional Research Service, 2008), http://www.

au.af.mil/au/awc/awcgate/crs/rl32170.pdf (accessed December 7, 2010).

3. United States Joint Forces Command, Joint Operating Environment: 2010 (Suffolk, VA: 

Government Printing Office, 2010), 3.

4. Robert M. Gates, “Helping Others Defend Themselves.” Foreign Affairs 89, no. 3 (May/June 

2010): 2. In this article, Secretary of Defense Robert M. Gates stated that the types of threats that the 

US will encounter will require many of the ad hoc security assistance, stability, and reconstruction 

capabilities that the Department of Defense (DoD) created during the prosecution of the wars in 

Afghanistan and Iraq.

5. Paul Collier, “Economic Causes of Civil Conflict and their Implications for Policy” (University 

of Oxford, 2006), http://users.ox.ac.uk/...econpco/research/pdfs/EconomicCausesofCivilConflictImplicationsforPolicy.pdf (accessed December 7, 2010), 6.

6. Collier, “Economic Causes of Civil Conflict and their Implications for Policy”, 6.

7. Kori Schake, “Operationalizing Expeditionary Economics” (Hoover Institution, 2010), 2.

8. Joint Staff, Joint Publication 1-02: Dictionary of Military and Associated Terms: As 

Amended Through 31 July 2010 (Washington, DC: Government Printing Office, 2010), 212. A 

hostile environment is an “operational environment in which hostile forces have control as well as 

the intent and capability to effectively oppose or react to the operations a unit intends to conduct.”

9. Joint Staff, Joint Publication 1-0: Dictionary of Military and Associated Terms: As Amended 

Through 31 July 2010 (Washington, DC: Government Printing Office, 2010), 212. An uncertain 

environment is an “Operational environment in which host government forces, whether opposed to 

or receptive to operations that a unit intends to conduct, do not have totally effective control of the 

territory and population in the intended operational area.”

10. National Public Radio, “Diplomats Pushed to Serve in Iraq,” National Public Radio, http://

www.npr.org/templates/story/story.php?storyId=15939537&ft=1&f=1012 (accessed December 7, 

2010).

11. Joint Staff, Joint Publication 3.0: Joint Operations: Incorporating Change 2 (Washington, 

DC: Government Printing Office, 2010), IV-29.

12. Joint Staff, Joint Publication 3.0, IV-29.

13. Conrad C. Crane, “Phase IV Operations: Where Wars are Really Won,” Military Review 

(May-June 2007): 19.

14. Keith Mines, “E-Notes: Economic tools in Counterinsurgency and Postconflict Stabilizations: 

Lessons Learned (and Relearned) in al Anbar, Iraq, 2003-04,” Foreign Policy Research Institute, 

http://www.fpri.org/enotes/20060928.military.mines.economictoolscounterinsurgency.html 

(accessed September 17, 2010).

15. The Department of Defense categorizes the national instruments of power into four areas: 
67

diplomatic, information, military, and economic.

16. Office of the President of the United States, The National Security Strategy of the United 

States of America (Washington, DC: Government Printing Office, 2010), 15.

17. Office of the President, The National Security Strategy of the United States, 15.

18. Department of Defense, National Defense Strategy (Washington, DC: Government Printing 

Office, 2008), 1.

19. Department of Defense, National Defense Strategy, 7-8.

20. Department of Defense, National Defense Strategy, 17.

21. Department of Defense, Department of Defense Instruction 3000.05 (Washington, DC: US 

Department of Defense, 2009), 2-3.

22. Department of Defense, Department of Defense Instruction 3000.05, 1.

23. Department of Defense, Quadrennial Defense Review Report (Washington, DC: 

Government Printing Office, 2010), 24.

24. Department of Defense, Quadrennial Defense Review Report, 24.

25. Joint Staff, Capstone Concept for Joint Operations [Version 3.0] (Washington, DC: 

Government Printing Office, 2009), 32-33. 

26. Joint Staff, Joint Publication 3-07.3: Peace Operations (Washington, DC: Government 

Printing Office, 2007), IV-9.

27. Gerald P. Driscoll, Adam Smith and Modern Political Economy: Bicentennial Essays on the 

Wealth of Nations (Ames: Iowa State University Press, 1979), 5.

28. Driscoll, Adam Smith and Modern Political Economy, 5.

29. D.P. O’Brien, Classical Economists (Oxford: Oxford University Press, 1975), 32.

30. Gerald P. Driscoll, Adam Smith and Modern Political Economy: Bicentennial Essays on the 

Wealth of Nations (Ames: Iowa State University Press, 1979), 5.

31. Driscoll, Adam Smith and Modern Political Economy, 24.

32. Driscoll, Adam Smith and Modern Political Economy, 12.

33. Driscoll, Adam Smith and Modern Political Economy, 10.

34. Sayali Bedekar Patil, “Classical Economics vs. Keynesian Economics,” Buzzle Web Portal: 

Intelligent Life on the Web, http://www.buzzle.com/articles/classical-economics-vs-keynesianeconomics.html (accessed December 7, 2010).

35. Harlan M. Smith, Understanding Economics (Armonk, N.Y.: M.E. Sharpe, 1999), 110.

36. Smith, Understanding Economics, 110.

37. Anatol Murad, What Keynes Means: A Critical Clarification of the Economic Theories of 

John Maynard (New York: Bookman Associates, 1962), 184.

38. Murad, What Keynes Means, 17.

39. Murad, What Keynes Means, 21.

40. Murad, What Keynes Means, 21.
68

41. Robert Skidelsky, Keynes: The Return of the Master (New York: PublicAffairs, 2009), 120.

42. Anatol Murad, What Keynes Means: A Critical Clarification of the Economic Theories of 

John Maynard (New York: Bookman Associates, 1962), 171-172.

43. Murad, What Keynes Means, 27.

44. Murad, What Keynes Means, 187.

45. Headquarters, Department of the Army, Field Manual 3-07 Stability Operations, 

(Washington, DC: Government Printing Office, 2008), 4-8.

46. United States Institute of Peace and US Peacekeeping and Stability Operations Institute, 

Guiding Principles for Stabilization and Reconstruction (Washington, DC: United States Institute of 

Peace Press, 2009), 6-38-6-39.

47. United Nations Development Program (UNDP), Human Development Report 2002 (New 

York: Oxford University Press, USA, 2002), 51.

48. “UT G8 Info. Centre. Genoa Summit 2001. COMMUNIQUÉ.” G8 Information Centre. 

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49. United States Institute of Peace and US Peacekeeping and Stability Operations Institute, 

Guiding Principles for Stabilization and Reconstruction (Washington, DC: United States Institute 

of Peace Press, 2009), 7-0.

50. United States Institute of Peace, Guiding Principles for Stabilization and Reconstruction, 

7-65.

51. William J. Baumol, Robert E. Litan and Carl J. Schramm, Good Capitalism, Bad Capitalism, 

and the Economics of Growth and Prosperity (New Haven: Yale University Press, 2009), 7-8.

52. Stephen Cornell and Joseph P. Kalt. “Reloading the Dice: Improving the Chances for 

Economic Development on American Indian Reservations.” (Los Angeles: American Indian Studies 

Center, UCLA.1992), 46.

53. Cornell and Kalt, “Reloading the Dice, 46. 

54. Office of the President of the United States, National Security Presidential Directive/

NSPD-44 (Washington, DC: The White House, 2005), 1.

55. Office of the President, National Security Presidential Directive/NSPD-44, 2.

56. United States Department of State, “Standby Component Opportunities,” US Department 

of State. http://www.crs.state.gov/index.cfm?fuseaction=public.display&shortcut=4FPI (accessed 

December 7, 2010).

57. United States Department of State, “Secretary Clinton Announces Civilian Response Corps 

Reaches 1,000 Members at Its Two-Year Anniversary Mark,” US Department of State. http://www.

state.gov/video/?videoid=114750580001 (accessed December 7, 2010).

58. Matt Treadgold, “Fit to Exercise: S/CRS and AFRICOM’s Judicious Response Exercise,” 

Civilian Response no. 11 (Summer 2010): 24.

59. The 1,750 deployable personnel figure based on a contingency that is longer than one year 

and that the Civil Response Corps is fully available; meaning all three groups are fully manned. It is 

calculated using 250 members of the Active Group, 1,000 members of the Stand-by Group deployed 

for 180-days, and 500 members of the Reserve Group deployed for one year out of their four-year 
69

contract.

60. Department of the Army, G-3 Force Management Memorandum “Organizational Design 

Paper for Active Army Conventional Forces CA Brigade (Washington, DC, February 22, 2010), 4. 

The current force structure design for the 96th Civil Affairs Brigade (General Purpose Force) 1,431 

personnel. This equates to one Civil Affairs Brigade headquarters, five Civil Affairs Battalions, and 

thirty Civil Affairs Companies. 

61. Robert Hoekstra, “Adjusting to Stabilization and Reconstruction Operations,” PRISM 1, 

no. 2 (March 2010): 23.

62. United States Department of State, “Reserve Component, Civilian Response 

Corps,” US Department of State, http://www.crs.state.gov/index.cfm?fuseaction=public.

display&shortcut=4B5C (accessed December 7, 2010).

63. Edward Burke, “Leaving the Civilians Behind: The ‘Soldier-diplomat’ in Afghanistan and 

Iraq,” Prism 1, no. 2 (March 2010): 35.

64. US Embassy Iraq, “PRT (Provincial Reconstruction Team) Fact Sheet 2008,” (March 2008). 

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8, 2009), 8.

67. Donald P. Wright and Timothy R. Reese, On Point II: Transition to the New Campaign: The 

United States Army in Operation IRAQI FREEDOM, May 2003-January 2005 (Fort Leavenworth, 

KS: Department of the Army, 2008), 519.

68. US Army Combined Arms Center, “Commander’s Guide to Money as a Weapon System,” 

Center for Army Lessons Learned Handbook 09-07 (2009), 13.

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22.

71. Special Investigator General for Iraqi Reconstruction Quarterly and Semi-Annual Report, 

36.

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Center for Army Lessons Learned Handbook 09-07 (2009), 16.

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75. Muhammad Yunus, Banker To The Poor: Micro-Lending and the Battle Against World 

Poverty, Revised and updated for the paperback edition (London: PublicAffairs, 2008), 68.

76. Yunus, Banker To The Poor, 71.
70

77. Grameen Bank, “Grameen Bank At A Glance: September 2010,” http://www.grameeninfo.org/index.php?option=com_content&task=view&id=26&Itemid=175 (accessed December 7, 

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Poverty, Revised and updated for the paperback edition (London: PublicAffairs, 2008), 110.

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80. Muhammad Yunus, Banker To The Poor: Micro-Lending and the Battle Against World 

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85. Department of Defense, Quadrennial Defense Review Report (Washington, DC: 

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86. Headquarters, Department of the Army. 2010 Army Posture Statement. (Washington, DC: 

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87. United States Forces Command. “National Guard Association of the United States” 

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States Army, 2009), 7.

89. George Casey Jr., “SITREP on the Army” (lecture presented at the Command and General 

Staff College, Fort Leavenworth, KS, April 16, 2010), MP3 file, https://courses.leavenworth.

army.mil/webapps/portal/frameset.jsp?tab_id=_18_1 (accessed December 7, 2010).

90. Casey Jr., “SITREP on the Army”.

91. Headquarters, Department of the Army, Field Manual 3-05.40: Civil Affairs Operations 

(Washington, DC: Government Printing Office, 2006), 3-2.

92. Lawrence J. Kolb, “Fixing the Mix,” Foreign Affairs 83, no. 2 (March 2004), 2. 

93. United States Forces Command. “Infantry Warfighting Conference” (presentation at the 

Infantry Warfighting Conference, US Forces Command, Fort Benning, GA, September 14, 2010), 

https://www.benning.army.mil/iwc/2010/...Gen%20Thurman.ppt (accessed December 7, 2010).
71

94. George Casey Jr., “SITREP on the Army” (lecture presented at the Command and General 

Staff College, Fort Leavenworth, KS, April 16, 2010), MP3 file, https://courses.leavenworth.

army.mil/webapps/portal/frameset.jsp?tab_id=_18_1 (accessed December 7, 2010).

95. Casey Jr., “SITREP on the Army”.

96. Samual Kyle Simpson, “Restructuring Civil Affairs For Persistent Engagement” (US Army 

Command and General Staff College, 2010), 37.

97. Active Component BOG-to-Dwell is calculated using the following equation where 1.11 

in the denominator accounts for 40 days associated with the relief in process activities in country. 

98. Reserve Component BOG-to-Dwell is calculated using the following 

equation where .75 in the numerator equates to nine months of availability 

and 1.11 in the denominator accounts for 40 days associated with the relief in 

process activities in country. 

. Dwell days are calculated using the following 

equation: Dwellx12 (months)x30 (days).

99. Headquarters, Department of the Army, Field Manual 3-05.40: Civil Affairs Operations 

(Washington, DC: Government Printing Office, 2006), 2-2.

100. A Contingency Command Post (CCP) is composed of approximately 100 personnel and 

serves as the deployable headquarters of the Theater Army/Army Service Component Command. It 

is designed to provide the Theater Army/Army Service Component Commander with an immediate, 

but limited, command and control capability for low to medium scale contingency operations. With 

additional enabling command and control capability, the CCP can serve as the foundation for a Joint 

Task Force Headquarters. 

101. Headquarters, Department of the Army, Field Manual 3-05.40: Civil Affairs Operations 

(Washington, DC: Government Printing Office, 2006), 2-10.

102. The strategy would provide each AC CA Brigade with an Economic Stability Section 

consisting of 20 personnel at the Brigade level, eight personnel at the Battalion level, two personnel 

at the Company level, one person in each of the Contingency-A Teams and one person in each of the 

Civil Military Operations Centers within the CA Brigade.

103. Joint Staff, Joint Publication 1-02: Dictionary of Military and Associated Terms: As 

Amended Through 31 July 2010 (Washington, DC: Government Printing Office, 2010), 143.

104. Clinton J. Ancker II, “How Ideas Become Doctrine: The Evolution of Military Thought in 

an Era of Complex, Rapid Change” (Fort Leavenworth, KS: Combined Arms Doctrine Directorate, 

US Army Combined Arms Center. 2010), 6-7

105. Bernard Carreau, “Lessons from USDA in Iraq and Afghanistan,” Prism 1, no. 3 (June 

2010): 139-50.

106. John J. Kruzel, “Economic Training for Junior Ranks Resonates with Military Chief,” 

Official Homepage of the United States Army, http://www.army.mil/-news/2010/03/05/35363-

economic-training-for-junior-ranks-resonates-with-military-chief/ (accessed December 7, 2010).
72

107. Jefferson P. Marquis, Developing an Army Strategy for Building Partner Capacity for 

Stability Operations (Arlington, Virginia: RAND Corporation, 2010), 57-58.

108. Special Investigator General for Iraqi Reconstruction (SIGR). “SIGR Accomplishments,” 

March 2010, http://www.sigir.mil/files/about/SIGIRaccomplishments.pdf (accessed December 7, 

2010). Audits conducted in 2006, 2009, and 2010 demonstrated that US Army lacked adequate 

numbers of contracting officer representatives and personnel trained to manage CERP funds; 

increasing the likelihood of fraud waste and abuse. Since the reporting of these findings, the US 

Army increased the numbers of contracting officer representatives and trained personnel through 

CERP-focused training and certification prior to deployment. 

109. “CGSC ILE Graduation”, Fort Leavenworth Lamp, June 17, 2010. http://www.

ftleavenworthlamp.com/community/x1224666916/Eikenberry-discusses-interagency-ops-at-ILEgraduation-Intermediate-Level-Education-course-2010-01-awards-announced (accessed December 

7, 2010). The total student population that graduated from the Command and General Staff School 

Class 10-01 was 985. The available seats in A516 (Economic Instrument of Power) and A982 

(Expeditionary Economics) was limited to 16 seats respectively for Class 10-01. 

110. Department of the Army, Pamphlet 611-21: Personnel Selection and Classification, 

(Washington, DC: Government Printing Office, January 22, 2007), Table 4-3. This ASI is also 

restricted to the ranks of captain to colonel or grade of O-3 to O-6. There is no economic related ASI 

for enlisted or warrant officer ranks. 

111. Edward Burke, “Leaving the Civilians Behind: The ‘Soldier-diplomat’ in Afghanistan and 

Iraq,” Prism 1, no. 2 (March 2010): 30.

112. Jeff Chu, “Joint Venture,” Fast Company, May 2010, 78.

113. Eliot A. Cohen and John Gooch, Military Misfortunes: The Anatomy of Failure in War, 

Illustrated. ed. (New York: Anchor, 1991), 26.
73

Expeditionary Economics in Turbulent Times

by

Lieutenant Colonel James R. Connally - United States Army

Abstract

The United States today finds itself in a turbulent era of failing and underdeveloped 

states. When a population either threatens or undertakes an overthrow of their government, 

the government will often request United States assistance for post-conflict stabilization. 

Often this assistance will extend past a normal security function and into the realm of 

economics. This monograph explores the term expeditionary economics and the importance 

of contextual understanding by military planners and commanders prior to intervening 

in another state’s economic system. Additionally, analysis of the economic development 

of Peru provides examples of both successful and unsuccessful economic interventions. 

Lessons learned from Peru’s defeat of the Shining Path provide an example of how a 

flawed approach fueled an insurgency while a perceptive approach helped eliminate the 

source of grievances within a population. While these lessons will not provide a formulaic 

answer to conducting future expeditionary economics, such knowledge provides better 

judgment in how to approach future interventions. Only through contextual understanding 

will military commanders and planners influence a state to change laws and economic 

practices in order to eliminate the source of economic grievances within a population and 

to increase economic growth.

Introduction

Since the end of World War II, many states of the world experimented with various 

forms of economics. Overall, the economic systems that allowed for a capitalistic approach 

succeeded whereas those who relied upon central planning ultimately failed. Although 

numerous reasons exist for the multiple failures of centrally planned economies, the 

overriding cause for such failures often stems from the lack of economic opportunity. 

Additionally, when the system of the state excludes individuals and groups from access to 

legitimate economic opportunities, the system drives these individuals and groups either to 

work outside the legal system or to take extreme actions against legitimate governments.

When violence erupts from within a populace against a government, governments 

often focus on eliminating the symptoms rather than the underlying causes for the violence. 

Military intervention initially restores some semblance of stability, but normally it fails 

to address the long-term catalysts of violence. During such pivotal moments, tremendous 

opportunities emerge to initiate economic growth through an acceptable set of economic 

policies. United States Army doctrine addresses the important development tasks of 

establishing economic policies, securing natural resources, engaging the private sector, 

encouraging trade, rebuilding economic governance institutions, and building essential 

economic infrastructure; however, it fails to discuss the tremendous issue of the exclusion 

of individuals and groups from legitimate economic activity.1

Military doctrine acknowledges the importance of an engaged labor force, but there 

exists an overreliance upon intergovernmental organizations to set up economic policies 
74

and establish conditions for long-term development and investment. By relying on such 

entities, the United States government misses an opportunity to influence the initiation 

of needed economic policy changes and often fails to support lower level sectors that 

comprise the engine of growth.

According to Carl J. Schramm of the Kauffman Foundation, the United States needs 

to develop an ability to conduct expeditionary economics given that the current attempts 

at rebuilding economies after conflict or disasters fall short.2

 Dr. Schramm identifies 

that economic growth is critical to establishing social stability and attributes many of the 

recent failures of development economics to the shortcomings in the current doctrine on 

international development. He further suggests that the United States’ entrepreneurial 

model provides an example for future expeditionary economic endeavors. 

Though the term expeditionary economics lacks a universally accepted definition and 

few authors write concerning the topic, historical examples exist that assist in the formation 

of an accepted doctrine. For instance, the Peruvian government’s economic development 

process during the 1990s provides an example of how changes in law and economic practices 

helped eliminate the source of grievances within a population. Lessons learned from Peru’s 

defeat of the Shining Path provide an example that should facilitate greater understanding 

of the proper use of economics to support the defeat of future enemies or resurrect the 

economy of a country after a disaster. However, such a historical example will not provide 

a predictive method for future leaders and planners to apply to future problems. Rather, the 

understanding gained by future leaders and planners from such instances illustrates how 

changes to policy influenced economic systems. This knowledge provides better judgment 

when attempting to influence a country’s economy in future post-conflict situations. 

Certain development economic advocates, such as David Landes and Paul Krugman, 

argue that a country’s confined culture, isolated geography, deficient education, unattainable 

finance, or undemocratic government represents the true issues experienced by faltering 

economies. Although extremely important, these variables are not critical elements that 

drive the economy of a country. Additionally, other development economists, such as 

Jeffery Sachs and John Maynard Keynes, advocate for plans that either focus on rapid 

changes within a country’s economic system or place unnecessary requirements that 

support a utopian or special interest goal. While many of the changes support a commonly 

desired outcome, tremendous or unnecessary changes to a system often cause it to fail and 

revert to a more centrally controlled economy.

A state’s economic system exists in a vulnerable and sensitive condition. Prior to 

entering a conflict, consideration of the state’s post-conflict economy must take place. 

Therefore, when approaching another state’s economic system, planners and commanders 

must approach another country’s economic system with extreme caution. Military 

commanders and planners must concentrate on understanding the environment in order to 

successfully influence the state’s economy. Most environments require understanding four 

essential areas. First, commanders and planners must possess a deep understanding of the 

successes and failures of past economic development attempts to improve the domestic 

economic system of the state. Second, commanders and planners must understand the 

need to suppress the appetite for immediate changes to a country’s economic system. This 

requires extreme patience and a long-term view of influencing the economic system of 
75

another country to reach an acceptable outcome of a new form of capitalism that facilitates 

access to its people. Third, commanders and planners must understand that the complexity 

of dealing with an economic system cannot be solved through simple solutions or a large 

central plan. Fourth, commanders and planners must understand the historical background 

of the area, cultural issues, economic systems, and the legal difficulties that facilitated 

the specific grievances. Through contextual understanding, commanders and planners can 

influence a state to change laws and economic practices in order to eliminate the source of 

economic grievances within a population and to increase economic growth.

Structure

This monograph does not examine the appropriateness of the United States military 

conducting expeditionary economics. Rather, the monograph examines the difficulties 

of intervening in the economics of another state and the importance of contextual 

understanding when performing expeditionary economics. This monograph is arranged 

in five major sections. The first section provides background on development economics 

and relevant history of Peru. The second section discusses the rise of the Shining Path. 

The third section examines the causes of the legal and extralegal activities. The fourth 

section provides analysis on development economic successes and failures. Finally, the 

fifth section provides essential areas for military commanders and planners to focus upon 

when conducting expeditionary economics.

Expeditionary Economics Defined

The term expeditionary economics does not possess a universally accepted definition. 

However, one may analyze the term’s meaning by disassembling it, defining the individual 

words, and reassembling the term to create a suitable meaning. Expeditionary, as defined 

by the Oxford English dictionary, means “of or forming an expedition, especially a 

military expedition.” 3

 Additionally, the Oxford English dictionary defines economics as 

a noun, meaning “the branch of knowledge concerned with the production, consumption, 

and transfer of wealth.”4 After reducing the term to its basic elements, one may begin to 

understand the term’s true meaning. Adding expeditionary to the word, economics, gives 

the term a military connotation – that is when a military is deployed to a foreign country. 

Although expeditionary economics intertwines itself with the military, the focus of this 

type of economics sounds comparable to the field of development economics. Therefore, 

for the purposes of this monograph, the term expeditionary economics defines a type of 

economics similar to development economics that a military performs or supports when 

they intervene in another country’s economic system.

Background on Development Economic Approaches

The field of economics contains almost as many economic theories as it does economists. 

This paper does not examine the debate between various economic theories such as how 

world markets have emerged from the Keynesian system of macroeconomic policies to the 

Chicago School of economics promoting free markets. Rather, the monograph centers on the 

ill-defined term of expeditionary economics and associating that term to existing economic 

thought. Since the field of development economics encompasses a comparable type of 
76

economics to the concept of expeditionary economics, an examination of development 

economics will prove helpful. Development economics focuses on economic growth, but 

consists of two very different approaches in developing a country’s economic structure. 

First, the top-down approach, focuses primarily on policy changes performed by the central 

government. Secondly, the bottom-up approach supports the local individuals or groups. 

Both have their bevy of vocal advocates, yet, neither extreme has produced successful 

changes within any country in recent history. 

Some economists fervently argue that successful examples of intervention exist. 

However, most examples consist of the post World War II Japanese and German recovery 

and the resulting successes of the Marshall Plan. Unfortunately, both of these examples are 

not true instances of expeditionary economics or even radical economic intervention. In fact, 

many individuals fail to understand that the Marshall Plan focused on reindustrialization 

instead of financial planning.5

 Prior to the war, the German and Japanese governments 

possessed advanced economies. During the post-conflict period, both economies were 

reconstructed by their own citizens and not by Americans or a big American plan.6 Without 

these two highly touted examples of development economics, the argument for intervening 

with a big plan falls short. Additional examples of successful economic interventions by 

another state do not readily exist. Yet, the fact remains that when states fail, and the United 

States government possesses enough interest to intervene, the intervention will require 

the United States government to normally call upon its military to intercede. Post-conflict 

intervention requires the military to provide security, support governance, and supply 

economic assistance. 

However, such intervention causes a great deal of concern among many Americans. 

In the field of economics, economists, such as William Easterly, believe that “military 

intervention to overthrow evil dictators and remake other societies into some reflection 

of Western democratic capitalism is the extreme of contemporary utopian social 

engineering.”7

 However, the failing state will, nevertheless, request the visiting state’s 

military to begin developing the state’s economy. The military normally enters the failing 

country first, possesses the greatest ability to plan, and maintains the largest amount of 

manpower within a foreign country. As a result, the burden to prevent the country from 

slipping into economic chaos, falls directly on the visiting state’s military. Consequently, 

with an understanding of the complex nature of an economic system within a state, military 

leaders and planners must carefully determine the best approach to the situation. Although 

planners do not have a wealth of examples from which to choose, they can analyze Peru as 

a case study in both a successful and unsuccessful intervention. Peru provides an excellent 

example of a country that possessed both civilian and military leadership, experienced a 

Maoist insurgency within its borders, struggled with economic solutions, and eventually 

succeeded in forming acceptable solutions that eliminated many economic grievances and 

prevented an insurgency from flourishing within its borders.

Economic Background on Peru 

Outsiders may never fully understand the nuances of any society, however, if one is 

to influence the economy of another state, it is essential to understand the background of 
77

the state, its economy, its politics and its people. In the case of Peru, although insiders 

attempted for decades to correct the economic azimuth of Peru, it was not until the 1990s 

that Peru set a course to truly provide economic opportunity for its people. Peru possesses 

a rich and diverse political and economic history. Once known as the cradle of the Incan 

civilization and the center of Spain’s Empire in South America, Peru was one of the last 

Latin American countries to gain its independence from Spain. While Peru experienced 

almost 300 years of Spanish rule and gained its independence in 1824, it was not until 

1895 that a stable elected civilian government was formed with the establishment of the 

“Aristocratic Republic.”8

 Prior to the Aristocratic Republic’s establishment, the leadership 

of Peru simply continued many of the colonial systems inherited from Spain. Although the 

Aristocratic Republic enacted many changes, the Peruvian government continued two main 

elements of Spanish control: authoritarian political institutions and mercantilist economic 

institutions.9

 

Authoritarian rule continued until 1895 and Peru maintained mercantilist economic 

policies with Great Brittan. Consequently, many emerging Peruvian entrepreneurs acted 

as agents for British interests.10 Many of these entrepreneurs became the elites within 

Peruvian society and exerted influence to protect their interests and exclude competition. 

Political leaders attempting to change the status quo did not last. In fact, few leaders lasted 

to serve a full term. Although there were some enlightened military leaders such as Ramon 

Castilla (1845-1851, 1854-1862), who worked to change the existing system, Peru’s 

political divisions did not arise from a typical conservative-liberal split (like much of Latin 

America during the nineteenth century), but more by the issue of military or civilian rule.11

Regardless of the party controlling the politics, mercantilist economic practices remained 

relatively untouched by the various governments. Such economic practices led to the 

economic difficulties within Peru. 

Throughout Peru’s history, the mercantilist economic system oppressed most 

Peruvians rather than communism or democratic capitalism. The Peruvian experience with 

mercantilism is an important aspect of Peruvian society that spanned from Peru’s time as a 

Spanish colony to the 1990s. Peruvian economist, Hernando de Soto, defined mercantilism 

“as the supply and demand for monopoly rights by means of laws, regulations, subsidies, 

taxes, and license.”12 In other words, within Peruvian society, there existed statesanctioned monopolies that protected the few from the competition of the many. Although 

most western states engaged in mercantilist economic practices until the late 1700s, 

some nations, like Peru did not undergo the economic evolutions that developed nations 

experienced. In fact, whether Peru’s colonial heritage or to the lack of a destabilizing attack 

upon the central government, mercantilism lasted in Peru at least a century longer than in 

Europe. However, after World War II, an emergence of informal activity, frequent property 

invasions, widespread lawbreaking, the first elements of a market economy, the anarchy 

resulting from negotiating for laws and bureaucratic favors, and many of the factors that 

preceded and shaped the European Industrial Revolution occurred that fought the restraints 

of a mercantilist economy.13

Prior to World War II, Peru’s mercantilist economic policies did not appear to harm 

the state’s economy or stability. Throughout the majority of the 1800s, Peru enjoyed an 
78

economic expansion spawning from an abundance of natural resources (especially the 

extremely large and rich deposits of guano on islands off the coast). However, Peru’s 

economic tide contracted with the outbreak of the War of the Pacific (1879-1883). Although 

this war with Chile resulted in Peru’s defeat that humiliated and demonstrated the weakness 

of the Peruvian government, and caused the loss of the costal department of Tarapaca (with 

its immense nitrate deposits) to Chile, the war successfully ushered in a period of social 

and political change under a limited civilian democracy.14 However, economically, the 

war was a disaster for Peru. It increased Peru’s economic dependency on foreign markets, 

foreign entrepreneurship, and foreign loans. It also “set the pattern for a limited state (i.e. 

small budgets) and private enterprise (i.e., large foreign investment) that most Peruvian 

governments tried to follow until the 1968 military coup.”15

Although the War of the Pacific caused Peru to lose a significant portion of its economic 

resources, the war did not change Peru’s overall economic system. Peru’s political leaders 

dealt with the challenges of balancing the desires of the military and the elites. In the war’s 

aftermath, the elites and the military concentrated on maintaining the status quo. As the 

only elected civilian to complete a full term between 1914 and 1984, Manuel Prado (1939-

1945; 1956-1962) was one of the few Peruvian leaders able to maintain the status quo 

and satisfy the desires of both the elites and the military. Prado accomplished this difficult 

task by being a part of the elite and by providing the military with the desired military and 

budgetary requirements.16

Economic difficulties continued to plague Peru. However, it was not until Peru began 

to experience the post WWII migrations to urban areas and the emerging problems with 

the mercantilist economic system, that caused the government to recognize the need for 

reform. The majority of the reforms focused on integrating labor, students, and the more 

marginal middle sectors. Although the government initiated many important reforms 

between 1963 and 1968, the failure to fully carry out any reform initiatives and meet the 

development challenges in the 1960s, caused the military to intervene on October 3, 1968 

with a bloodless coup.17

The military’s control over the Peruvian government marked a pivotal time in the 

state’s history. For the first time, the state’s leadership focused on reforming the state 

and not on maintaining the status quo. Remarkably, the military looked to create changes 

that supported the majority of Peruvians. The reforms concentrated on diversifying its 

economy to reduce the country’s economic and political dependency and institute largescale agrarian reforms to eliminate large private landholdings. The policies did not try to 

redistribute the existing share of the market. Rather, it focused on generating economic 

growth, improving the distribution of this growth, and garnering the support of economic 

elites to redirect their wealth toward new productive activities.18 However, established 

laws and economic practices did not always support the changing reality occurring at the 

grass-roots level. Individuals emerged from rural areas and had to work outside the law 

to engage in activities normally accepted by formal society in other states. This behavior 

revealed that Peru could no longer follow a mercantilist economic path. 
79

Many of the reforms focused on directing the economic evolution away from 

mercantilism. General Velasco Alvarado’s agrarian reforms in the 1970s helped to dismantle 

the socio-economic system that dominated and isolated the rural population.19 However, 

the military’s inability to quickly adapt to both Peru’s evolving internal problems and those 

within the global economy increased discontent and dissatisfaction among the people. By 

1977, mounting economic and political pressures prompted the military regime to initiate 

a gradual return to civilian rule.20 The return to civilian rule corresponded to the Shining 

Path’s people’s war on the eve of the national election of May 18, 1980.21

During the 1980s, Peru witnessed increasing terrorist violence and continued 

economic strife. In many cases, the government’s action only exacerbated problems and 

increased the hardships on the Peruvians. However, many outside agencies share the 

blame with the Peruvian government. During the debt crisis of the 1980s, the IMF and 

World Bank possessed a great amount of leverage over developing countries and instituted 

many policy requirements and conditions that were not generally in the interests of the 

developing countries.22 For example, the International Monetary Fund (IMF) imposed 

onerous, restrictive and controversial requirements on the domestic economic policies. 

These restrictions crippled Peru’s eligibility to receive new external resources and debt 

refinancing.23 Although Peru made such required changes, Peru continued to experience 

economic woes and terrorist violence. Such hardships led a majority of Peruvians to crave 

dramatic change away from what the traditional political parties had to offer and to gamble 

on an individual that would represent a “new Peru.”24 In June 1990, a relatively unknown 

politician, Alberto Fujimori, won the Peruvian national election by running on a platform 

focusing on alleviating economic hardships and eliminating guerilla violence. 

During the campaign, Fujimori’s platform was not as extreme as his challenger’s, 

Vargas Llosa. However, once in power, Fujimori immediately initiated an economic shock 

program even more severe than Llosa proposed during his campaign. This economic 

shock program (known as “Fujishock”) implemented drastic measures which dramatically 

accelerated inflation, further reduced domestic economic activity, and pushed several 

million more Peruvians below the poverty line (approximately 14 million, or 60 to 70 

percent of the population).25 Fujimori implemented such draconian measures in an attempt 

to reestablish international credit and create a foundation for future economic growth. 

Throughout this period, the Washington Consensus heavily influenced many of the policies 

Fujimori implemented. 

American economist John Williamson initially coined the term Washington Consensus 

to describe a set of economic policies imposed by the World Bank and the International 

Monetary Fund during the 1990s.26 The Washington Consensus established a list of 

ten specific macroeconomic policy prescriptions for developing countries to implement 

in order to recover from the economic and financial crisis of the 1980s. The policy 

prescriptions outlined in the Washington Consensus became synonymous with neoliberalism and centered on trade liberalization, liberalization of inflows of foreign direct 

investments, deregulation and privatization.27 Economists and policymakers alike consider 

this a controversial list as it requires adherence to a set of rules instead of allowing the 
80

state to find its own path to development and reform. The ten macroeconomic policy 

prescriptions are: 1) fiscal discipline, 2) redistribution of government funds on the basis of 

need rather than politics, 3) broadening of tax bases and reduction of marginal tax rates, 

4) liberalization of financial markets (absence of entry and price controls for institutions, 

national treatment for foreign firms, and absence of capital controls), 5) competitive 

exchange rates, 6) replacement of trade quotas with tariffs, 7) removal of barriers to product 

market competition, 8) privatization of state-owned enterprises, 9) abolition of barriers to 

foreign direct investment, and 10) strong and effectively enforced property rights.28 

Although extremely painful for Peru, Fujimori’s “Fujishock,” with the inclusions of 

select Washington Consensus prescriptions, began to turn the economy around. However, 

since Fujimori lacked a congressional majority and did not desire to continue negotiating 

through democratic channels, on April 5, 1992, he temporarily suspended democracy by 

suspending the Peruvian congress, the judiciary and the constitution.29 This autoglope (coup 

against oneself) received domestic and international condemnation, however Fujimori 

easily continued to effectuate reforms. The autoglope only lasted until December 1992, 

during which, Fujimori facilitated economic stabilization and centralized, thus increasing, 

the power of the presidency.30 The success of market-oriented economic policies coupled 

with the capture of the Shining Path’s leader, Abimael Guzman, in late 1992 set the 

Peruvian state on an excellent economic path and permitted Fujimori to bring together the 

technocrats, business elites and personal loyalists to collaborate on economic reforms.31

The lasting effects of the economic reforms within Peru are still in question. However, 

early indications suggest that Fujimori’s approach set Peru on a sustainable development 

path.

The Shining Path

The violence in Peru, between the years of 1980 and 1993, claimed over 30,000 lives 

and resulted in more than 24 billion dollars in direct and indirect property damages (over 

half of Peru’s Gross National Product).32 Many reasons for social discontent existed in Peru 

during this time. However, the dissatisfaction with Peru’s government does not explain 

the rise of one of the most brutal insurgencies in the Western Hemisphere. While Peru 

faced many of the same difficulties of other Latin countries, how did a young philosophy 

professor named Abimael Guzman, create the violent organization known as Sendero 

Luminoso, or the Shining Path?

Origins of the Shining Path

To understand the Shining Path, one must start at the genesis of the organization. The 

origins of the Shining Path began in 1959 when Abimael Guzman joined the Peruvian 

Communist Party (PCP). Guzman further developed the organization in 1962 when he took 

a job at the newly reopened San Cristobal de Huamanga University in Ayacucho, Peru.33

Both the Andean department of Ayacucho and the Huamanga University were instrumental 

in the growth of the Shining Path. In this remote, poor and backward Andean region, 

Huamanga University provided the only school for higher learning and represented a path 

of upward mobility. This institution gave hope of an education to a people where until 

midcentury, bankrupt landowners persisted in the serf-like exploitation of “their” Indians.34
81

As with many universities around the world, students at Huamanga University began to 

question their previously held beliefs. Inequalities observed outside the campus coupled 

with the economic reality that few jobs existed for recent graduates caused students to 

protest government policies and form various political groups. Although the PCP existed 

at Huamanga University, Guzman formed a Red Faction group within the party. He further 

aligned this group with the Maoist followers that eventually created a split within the PCP 

between pro-Soviet and Maoist followers.35 

When examining his background, Guzman’s path toward leading the Shining Path 

does not seem predestined. However, Guzman’s experiences of organizing, debating, and 

political infighting while at the university prepared him to create and lead the Shining Path. 

Additionally, Guzman gained other valuable experiences from outside Peru. Although 

Guzman’s Maoist PCP did not support the 1965 pro-Cuban, communist insurgency 

within Peru, Guzman’s arrest appeared imminent nonetheless. Consequently, the PCP 

sent Guzman to cadre school in China where he gained valuable experience.36 After an 

enlightening time in China, Guzman returned to a changed Peru. The government takeover 

by the Peruvian military concerned Guzman and many of the pro-Chinese communists 

since the military desired to implement many of the reforms advocated by the Peruvian 

left winged parties. Guzman and the pro-Chinese communist strongly opposed the military 

government for they feared being forced out if the military succeeded in such reforms.37

However in 1970, Guzman was expelled from the Maoist PCP after an internal struggle 

within the party. Guzman’s expulsion provided a path on which the Red Faction would 

travel towards becoming the Communist Party of Peru – The Shining Path.38 From this 

point forward, the Shining Path’s identity and belief system spawns from the mind of one 

person, Professor Abimael Guzman Rynosos.

Shining Path’s Maoist Approach

Although Abimael Guzman claimed that his ideology was the “fourth sword of 

Marxism,” his actions were overwhelmingly Maoist.39 Like Mao, Guzman identified 

three key phases of guerrilla war: “defensive,” “equilibrium,” and finally, “offensive.”40

Additionally, in Maoist tradition, and in order to justify armed insurgency, Guzman defined 

Peru’s society as semifeudal and semicolonial.41 Although Peru’s society did not fit neatly 

within this Maoist construct, such a view enabled Guzman to define his approach. Guzman 

believed that he had to start the war from the rural base with the aid of peasants. Once he 

created the revolutionary base in the rural areas, Guzman believed that he would have 

enough forces to then encircle the cities. However, Guzman’s dogmatic insistence on this 

misguided approach lasted until the Shining Path’s first congress in 1988, where the Maoist 

prioritization of the countryside was modified to one focused on the cities.42

While many reasons exist to explain this misguided approach, the primary reason for 

the failure of this approach originates from Guzman’s inflexible adherence to a guerilla 

model and his lack of understanding of the situation in Peru. The Shining Path did not start 

out as a peasant rebellion, but was derived from the university.43 In fact, one of the first 

groups that the Shining Path recruited came from teachers and students. Although many of 

these individuals were the first in their family to receive an education, economic struggles 
82

had led many not to be able to provide for their families’ basic needs.44 Additionally, 

not until the late 1980s, did Guzman comprehend the difficulties experienced by peasants 

migrating to the cities. Prior to that time, Guzman viewed Peru as a larger example of what 

he witnessed in the Peruvian state of Ayacucho.

Building Political Base

In the 1970s, Guzman started building his base in Ayacucho. This time period in 

Ayacucho heavily influenced the Shining Path and caused the leadership to form many of its 

ideals around problems facing Peru with what was seen within Ayacucho: poor, provincial, 

isolated, and Indian.45 This experience, coupled with the influences of Guzman’s stay 

in China, led to the Shining Path ideology’s three key elements: (1) characterization of 

society as “semi-feudal,” implying that the peasantry will be the primary social base of the 

revolution and that democracy is impossible; (2) the fundamental role of political violence in 

the revolutionary process; and (3) Gang-of-Four Maoism as an invariable truth.46 Although 

Guzman garners support through the addressing of grievances, the extreme nature of this 

form of communist ideology created future difficulties for the Shining Path.

When the military government was in power, the Shining Path garnered considerable 

sympathy and support among the Ayacucho population by addressing grievances that the 

military initially raised when first assuming power.47 However, the military did not see the 

importance of some of Peru’s rural departments since such areas did not typify the main 

issues that the central government faced. The central government concentrated on problems 

generated by large urban populations and the massive migration to urban areas. Therefore, 

the Shining Path took advantage of the government vacuum in Ayacucho, addressed the 

people’s needs and consequently, garnered their support. The lack of government focus 

and inability to exert control in many of the rural areas helped support the Shining Paths’ 

ideology and plan for Peru’s future. The Shining Path’s leadership created a strategy that 

initiated a People’s war in order to gain control of the countryside for the purpose of 

encircling the cities.48 

While the Shining Path grew in strength in areas where the government held little 

influence, they continued to struggle outside of their home base of Ayacucho. In order 

to compensate for its weakening impact on society, the Shining Path built increasingly 

well-organized cadres steeped in the ideology of destroying society in order to build a 

new society.49 Subsequently, when the deteriorating economic conditions forced down 

the wages on which many peasants depended, and continued lack of access to land for 

economic security pressed them further, the Shining Path possessed a ready stable of 

hardened believers to move into other areas to reinforce the organization. The Shining Path 

simply transformed the power structure with itself at the top and with the peasant masses, 

which it considered in need of leadership and instruction, at the bottom. The Shining Path 

admonished villagers to refrain from participating in the capitalistic market and to remain 

autonomous.50 During this period, the local realities of the peasant economy served to 

maintain sympathy for the Shining Path.51 Such sympathy helped to subvert the reforms 

the military government often attempted. The initial actions were all political until the eve 

of the elections in 1980, when the Shining Path’s leadership decided that the time was ripe 

to introduce the military arm of their movement.
83

 The Peruvian government did not take seriously the Shining Path’s initial disruptions. 

Interestingly, the government’s response, or lack thereof, caused problems with the local 

population. It angered the local population, when, in December 1982, the government used 

massive and indiscriminate military force, instead of selective force, against the Shining 

Path.52 The Shining Path continued to exert themselves and increased their strength where 

the government was weak. The Shining Path established a foothold in areas where coca 

eradication caused ill-will and created a financial windfall for the organization, providing 

millions annually.53 Any place where the government lacked power and influence 

only created more opportunity for the Shining Path. The Shining Path acknowledged 

this opportunity in their 1986 war plan by starting to title land, homes and businesses 

throughout Peru to win the favor of the people.54 The Shining Path experienced immense 

support when they focused on the grievances of people. However, the Shining Path failed 

when they attempted to impose a set of procedures and controls that appeared to exert the 

same structures of domination most local communities were trying to escape. Interestingly, 

this helped individuals conclude that the government, not the Shining Path, could better 

respond to their needs.55

Sources of Grievances

Grievances are often caused when groups are excluded from legitimate activities. The 

Shining Path failed to provide the spark to enflame Peru into a true revolution. This failure 

stemmed from a flawed ideology and lack of understanding concerning the grievances held 

by most Peruvians. In Peru, exclusion from the formal legal system, land disparity, and lack 

of access to education were the three major sources of grievances. These grievances caused 

the disenfranchised to search for other sources for relief, which, in turn, undermined any 

existing support for the local government. As Peruvians migrated from rural areas, seeking 

a better life, they had to rely on their entrepreneurial abilities to earn a living. This group 

of entrepreneurs worked in the informal or extralegal sector and made up sixty to eighty 

percent of the population.56 These entrepreneurs desired to live under the rule of law in 

order to have their homes and businesses recognized. However, when they existed outside 

of the rule of law, in the extralegal sector, their security could only be assured through an 

extralegal arrangement not recognized by legitimate law. Extralegal arrangements produce 

many difficulties for the entrepreneur. Primarily, by not having their assets within the legal 

system, these entrepreneurs could not use the assets to guarantee credit, and thus did not 

possess any incentives to initiate long-term projects.57 

The disparity of legal land ownership continued as a source of grievance for many 

Peruvians. Historically, the Peruvian elites drove many indigenous people from their lands 

so that the elites could establish large haciendas.58 Although the government recognized 

the disparity of land as a legitimate grievance, rising population growth and the state’s 

failed agrarian reforms only increased the divide. Land reform solutions came from a 

grass-roots level, but unfortunately the state failed to acknowledge the legitimacy of such 

solutions and dismissed the power of reforms originating from the local level. The state’s 

failure to incorporate a grass-roots movement for land reform coupled with an imposition 

of a bureaucratic cooperative structure, created cooperatives that lacked accountability and 

drew resentment from the peasants.59 
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Lack of access to education became an increasing source of grievance for the peasantry. 

Peasants migrated to urban areas seeking out education to take away the elites monopoly 

on Spanish, reading and writing in order to provide opportunity for upward mobility.60 In 

1969, the military government attempted to restrict free high school education to students 

with passing grades, and caused the peasants of Ayacucho to create a social movement 

that defended free education.61 In this instance, the government heeded to the desires 

of the people. Although such movements caused the government to discontinue such 

attempts at limiting education, it did not motivate the government to improve the education 

opportunities for the peasants in the rural areas. For the peasantry, education continued 

to provide upward mobility, remained highly desired and became the catalyst for many 

to migrate to the city in order to provide brighter future and more opportunities for their 

children.62

 However, migration did not meet the expectations of many of the Peruvians. Once in the 

city, the Peruvians found themselves forced to work in the extralegal sector. The migrant’s 

inability to receive legal recognition and public services (light, water, sewage, transport, 

and education) from the government caused them to create community organizations that 

employed an arsenal of pressures, from marches to bribes, in order to stimulate government 

action.63 The government’s inability to respond to the basic needs of their citizens often led 

to individuals forming local solutions outside the legal domain. Consequently, since the 

government did not sanction such local solutions, the government viewed such actions as 

illegal. However, a distinction must be drawn between what is truly illegal and extralegal. 

Legal and Extralegal Activity

Legal economic activities consists of economic activities occurring within a state that 

the state permits and governs by law. Extralegal activity consists of any activity that does 

not fall within the realm of legally sanctioned activity by the government. Black market 

activities or underground activities are additional terms used for extralegal activity that 

occurs outside of the law of the state. Regardless of the term used, such activity persists 

around the world and provides a source of income for many individuals. States often have 

the misconception that the extralegal sector exists only to provide cover for those avoiding 

taxes. Extralegal activity does not always equate to illegal activity. For example, when 

a government fails to provide a service such as public transportation for a community, 

entrepreneurs will often step in to fill the need. However, once the state changes the law 

to prohibit such activity, the extralegal activity now becomes illegal from the purview of 

the state. 

Additionally states wrongly believe that solutions to land titling problems lie with 

building better databases, or that the current laws are sufficient, or the costs of compliance 

are at an acceptable level.64 States should search for inclusive solutions and must understand 

the necessity of high-level political leadership to incorporate extralegal arrangements. 

When states fail to fully understand the extralegal sector’s causes and effects, the existing 

grievances are further exacerbated. While severe problems exist with extralegal activity, 

individuals charged with reforming the system must understand that macroeconomic 

reforms are not enough.65 Even if the macroeconomic reforms meet international standards, 

it does not equate to sustained economic growth in a society. Each state provides a unique 

set problems that require a distinctly different approach from other states. For example, 
85

until the recent entrepreneur expansion that changed the entire economy, India exemplified 

how state guidance hindered economic growth.66 Although India followed a protectionist 

industry-building strategy for about fifty years, true economic growth did not occur until 

they were exposed to freer trade.67 In the majority of cases, a heavy-handed, centralized 

approach to economic growth undermines entrepreneurial ability to create growth.

Economic Growth

The majority of states desire to increase their economic growth. Although onerous 

economic policies often reduce such growth, this does not mean that economic policies 

lack merit. Prudent fiscal and monetary policies keep inflation low, prevents economic 

downturns, and fuels economic growth.68 States reduce grievances by facilitating economic 

growth opportunity. When a state lacks economic opportunity, they are prone to political 

instability and backlashes.69 It is important not to confuse economic growth with economic 

activity. Economists typically measure the economic growth of a country by the increase 

or decrease of the gross domestic product (GDP) that traditionally comprises a country’s 

output of goods and services.70 However, GDP only measures legal activities and fails to 

account for the majority of economic activities in non-Western states. This aspect provides 

one of the greatest opportunities for a state to change their economy. States can transform 

their economy through facilitating an environment that encourages economic growth in 

the legal economy. Key elements that facilitate growth for entrepreneurs are the ability to 

easily form a business and the legal enforcement of property and contract rights.71

Law

The importance of law to encouraging economic growth cannot be overstated. In 

developing countries, laws often focus on protecting ownership and opportunities for a 

small group of elites.72 For the majority, laws determine if they work within the formal 

sector or are forced to operate in the extralegal sector. Individuals in developing countries 

continually evaluate the cost of access to and the cost of remaining within the formal 

sector.73 States should not arbitrarily create or enforce laws that only benefit the few. The 

state’s laws must represent the society and their grievances. When a state understands the 

true sources of societal grievances, it is better prepared to create effective and unbiased 

law. Such laws reflect what is occurring in society and provide incentives for people to 

abide by the law.74 

When a state faces rapid changes associated with mass migration to urban areas, the 

state often becomes overwhelmed and needs to re-evaluate its laws. The complex nature 

of these societal changes requires effective legal institutions able to enact changes in a 

timely manner. Peru provides an excellent example of the importance of creating effective 

laws and how a state must discard ineffective ones. In Peru’s case, the debilitating laws of 

mercantilism sought to regulate every issue, every transaction, every property, but the state 

found efficient laws to replace the existing system and promote the desired ends.75 Such a 

process is iterative and emerges unpredictably. 

The Formal Sector

Commanders and planners must understand the importance of enabling and assisting 

individuals to operate within the formal sector of a state’s economy. When individuals 

operate within the formal economy, their assets become live capital that is recognized 

and used globally. Formal property provides a primary mechanism to increase a state’s 
86

economic growth. When the state’s formal sector recognizes property, it effectively 

protects ownership, secures transactions, and encourages citizens in advanced countries 

to respect titles, honor contracts, and obey the law.76 Although protection of ownership is 

important, the key aspect of the formal property lies in the ability to represent something 

other than its physical state. The ability of an individual to leverage property provides a 

catalyst that generates economic growth. In essence, formal property improves the flow of 

communications about assets and their potential.77

The Informal Sector (the excluded)

Individuals existing in the extralegal sector do not enjoy the protections of the law. 

In Peru, the existing dominant groups in the legal sector viewed the new migrants to 

urban areas as competition. To limit the competition from such migrants, these dominant 

groups used Peru’s legal institutions to bar migrants from establishing social and economic 

activities, sought means to maintain the elite privileges, and isolated the peasants in rural 

areas.78 When individuals realize that the laws do not support their needs and excludes 

them from participation, they invariably seek alternatives to the legal system that provides 

protection. 

The Peruvian economist, Hernando de Soto, describes informality as existing “when 

individuals and firms carry out economic activities that are inherently constructive – such 

as building homes, selling goods and services, and so on – but in ways that are technically 

illegal because they lack the requisite official approvals, licenses, or, in the case of land, 

titles.”79 In many countries, the extralegal sector provides the majority of economic activity 

by its citizens. In fact, the International Labor Organization reports that during 1990s, 

eighty-five percent of all new jobs in Latin America and the Caribbean were created in the 

extralegal sector.80 Although the extralegal assets of individuals become dead capital and 

lose the ability to generate economic growth in the legal arena, the cost associated with 

obeying the law are too onerous and outweigh any benefit of working within the legal 

sector. However, options do exist for individuals charged with creating economic growth. 

The United States’ expansion into the West provides an example of a state generating 

economic growth by successfully incorporating the extralegal sector. Although analysis of 

Western expansion does not provide an exact parallel, history reveals that when those in 

power accept and ratify established extralegal contracts, they provide a way to successfully 

transition from the extralegal to the legal sector.81 This does not imply that legal systems 

should look to absorbing all extralegal arrangements. Rather, voluntary compliance will 

only occur if the system is relevant and efficient.82 

Social Contract

In creating a system that engenders compliance, the state absorbs social contracts into 

the legal sector and creates a national social contract with its citizens. To accomplish a 

national social contract, the state must understand the beliefs, desires, intentions, customs, 

and rules that are contained in these local social contracts.83 Through this understanding, 

the state can begin to transition individuals into the legal sector. By creating a legal and 

political bridge from existing extralegal arrangements into a new social contract, the state 

gains the support of the people and individuals enjoy the benefits under formal law. The 

new contract brings the extralegal into the legal framework and gives them a stake in the 

capitalist system. However, this is a major political task since it tampers with the status 

quo.84
87

A state failing to incorporate the extralegal sector within its borders exposes itself to 

potential internal threats. Since extralegal assets are extremely hard to move without being 

connected to the legal sector, individuals have to rely on their extralegal social contracts. 

This reliance upon extralegal social contracts causes individuals to view the law and the 

government that was trying to enforce the law, as hostile to their interests.85 It is extremely 

dangerous for a government to rely on established laws that exclude a significant portion 

of its populous. Failure to incorporate the excluded provides an opportunity for radical 

and subversive individuals and groups to gain the excluded’s support, by providing asset 

protection, championing their causes, and providing a violent alternative to their present 

situation. Extralegal activity is not inherently subversive to the state. However, when the 

state limits the opportunities to only the politically well-connected, fatalism and despair 

occur, causing emigration or revolution.86

Costs

People naturally follow rules that protect their assets. When the legal order fails to 

keep pace with economic and social upheaval, people invent informal, ad hoc business 

arrangements that do not always best serve their interests.87 People tend to follow the laws 

that directly protect their assets. Hernando de Soto noticed that when laws were consensual, 

extralegal groups preferred the formal titles over continuing previous arrangements.88 This 

results from the cost associated with the extralegal sector. Contrary to popular thought, 

when individuals build a house outside the legal process, they pay a very high price for the 

land they occupy.89 Additionally, any investment made to build or improve on that piece 

of land becomes dead capital since it exists in the extralegal sector. Both the individual 

and the state lose when this occurs. Hernando de Soto calculated that approximately $9.3 

trillion worth of real estate is held, but not legally owned, in the third world and former 

communist countries.90 The primary reasons for individuals to hold their assets outside the 

legal sector stems from their inability to pay the costs of obtaining property. These are high 

costs in both time and money. Prior to changes in the government, it took a Peruvian more 

than three hundred days (working six hours a day), thirty-two times the monthly minimum 

wage, and seven hundred and twenty-eight bureaucratic steps to have an asset set up in the 

legal sector.91

Capital

To obtain capital from their assets, an individual cannot remain in the extralegal 

sector. The importance of understanding how capital drives economic growth is vital 

when conducting expeditionary economics. Economists generally define “capital” as that 

part of a country’s assets that initiates surplus production and increases productivity.92

Understandably, this can be difficult for those outside the field of economics to visualize. 

Capital is not money or accumulated stock of assets, but the potential it holds for new 

production.93 An asset cannot be easily leveraged if it does not exist legally. One cannot 

put up their house as collateral for a loan if the bank is unsure of the legality of the asset. 

Therefore, capital can be seen as a title, a security, a contract, or other such record that 

represents the asset. 
88

This is why capitalism works in the West and has difficulties elsewhere. Imitating 

capitalism by imitating Western economics through macroeconomic or structural reforms 

does not create wealth. Rather, states need to produce capital, which requires a legal 

property system.94 This formal property system should represent assets in a way to allow 

individuals to understand each other, make connections, and synthesize knowledge about 

the assets to enhance productivity. Although many entrepreneurial individuals already 

possess the assets they need for success in a capitalistic system, the major stumbling block 

that keeps the rest of the world from benefiting from capitalism is its inability to produce 

capital.95

The Importance of Entrepreneurs

Once the state provides mechanisms to unlock the economic potential of extralegal 

assets, entrepreneurs can tap into trillions of dollars of real estate in order to produce, secure, 

or guarantee greater value in the expanded market.96 The key for the success of economic 

growth in the state is unlocking the potential of entrepreneurs. Entrepreneurs are any entity, 

new or existing, that provides a new product or service or that develops and uses new 

methods to produce or deliver existing goods and services at lower cost.97 Entrepreneurs 

assume a tremendous amount of risk and initiative when they migrate from a rural to an 

urban area. This, coupled with the ability to identify and satisfy other’s needs, creates 

wealth from knowing how to use resources, not from owning them. This entrepreneurial 

ingenuity creates wealth on a vast scale far exceeding the holdings of the government, the 

local exchanges, and foreign direct investment; they are many times greater than all the aid 

from advanced nations and all the loans extended by the World Bank.98 However, when the 

wealth exists in the extralegal sector, it is essentially dead capital. By transferring this dead 

capital into the legal domain, entrepreneurs can utilize the new resources to accumulate 

much more wealth. Although a local community may view the rapid accumulation of 

wealth by an entrepreneur as a source of friction within a community, entrepreneurs are the 

solution for economic growth. 

Entrepreneurship triumphed in the West because the law integrated everyone under 

one system of property, giving them the means to cooperate and produce large amounts of 

surplus value in an expanded market.99 Capitalism provides the system for entrepreneurs 

to succeed and provides individuals the incentive to take risks. Individuals are more likely 

to come up with and implement good ideas than any group of planners or experts, and 

the very “un-plannedness” of a free-market economy, which might seem to be a great 

weakness, turns out to be a great strength.100 The global economy is not a “zero sum game” 

where some countries “win” and others must “lose.”101

Failure and Success of Development Economics

Countries and organizations with the best of intentions to improve the state’s economics 

fail on a regular basis. Many development economists tout that their list of requirements 

provides states with a plan that will create economic growth. However, the prerequisites 

that economists provide to states usually only apply to a small portion that have had some 

success. For instance, Jeffery Sachs lists the preconditions of basic infrastructure (roads, 

power, and ports) and human capital (health and education) coupled with foreign assistance 

as ingredients to create economic success.102 Yet, economic growth occurs throughout 

the world without such preconditions or ingredients. Although no formula exists for the 

improvement of economic growth within a country, one can gain better understanding 
89

from looking at past successes and failures. Peru exemplifies a case where one can view 

both the successes and failures of economic development. By borrowing from this and 

other countries’ successes and failures, commanders and planners can facilitate a better 

approach to future operations. The international community provides many examples that 

demonstrate the challenges and difficulties associated with changing a society’s economic 

path. However, the two main obstacles to creating economic growth are free market reform 

and outside government intervention. 

Free Market Reforms

Financial markets provide a great source of free market efficiency and create 

opportunities for individuals to get rich by borrowing and investing.103 While free markets 

do work, free markets reforms often fail as a result of the state taking a centralized approach 

to reform. The need to democratize the reform process constitutes one of the main challenges 

of institutional reform.104 In order to get the local level to function in a free market requires 

the state to understand the reality at the local level. The ability to understand that poverty 

is a complicated tangle of political, social, historical, and institutional factors should 

cause a state to search for homegrown solutions.105 This is where the system of statedriven capitalism differs from central planning. In centrally planned economies, the state 

picks the winners, owns the means of production, sets all prices and wages, and provides 

no incentives for progress.106 This does not insinuate that all state-driven capitalism 

economies work. For instance, oligarchic capitalism thrives on corruption and stymies 

economic growth. The attempted privatization in Russia displays the failure of state-driven 

capitalism to incorporate a participatory process that that included homegrown solutions.107

However, states can promote growth and move toward a healthy form of capitalism if they 

understand the complexities of their society.

The state must find out what works at the local level. Failure to do so leads to one of 

the three main problems that create opposition to free markets. First, free market reforms 

that do not regulate profit-seeking behavior, allows opportunists to benefit at the expense of 

others.108 Such regulation can be extremely difficult in disparate societies. For example, the 

state must provide enough protection for the wealthy or they will not accept the reforms. 

However, if the poor are excluded, they will revolt. Checks and balances are as important 

to economic development as is the existence of free markets.109 The second challenge to 

free markets is failing to understand the local custom and its effect on the existing, working 

extralegal arrangements. For example, when aid agencies recommend to build computer 

databases to catalogue land titles as a solution to land ownership conflicts, they fail to 

understand the local challenges and potentially create more problems. Complex problems 

do not present simple solutions. The last challenge to free markets are rapid introduction of 

reforms designed to change all the rules at once. This drastic change disrupts the established 

order and causes such turmoil that the weak new arrangements are unable to make the free 

market work well.110 An abrupt change to an economic system creates confusion and often 

causes individuals to revert to something more familiar. 

Since the state does not have the ability to possess all the required information to 

create lasting change, all reforms are partial. Rather than trying to accomplish everything at 

once, policy makers need to pursue inclusive ways that give the majority access to the free 
90

market. Too often, policy makers believe that their role is complete once they stabilized and 

adjusted the macroeconomic level, allowing legal business and foreign investors to prosper 

and orthodox economists to control the treasury.111 The exclusion of the majority through 

free market reforms leads to future problems. Policy makers need to advance with gradual, 

experimental steps toward free markets.112 This allows individuals to adopt reforms that 

work and states to better adapt to the changing requirements.

Outside Intervention

Many observers outside of the state do not always believe that the state is capable of 

righting its own ship. Outside intervention normally consists of either military invasion 

or foreign aid. Although liberals may prefer big state-led effort to fight global poverty 

and conservatives prefer benevolent imperialism to spread Western capitalism and subdue 

opposition to the West, neither type of intervention works.113 Macroeconomic plans 

fail despite the best of intentions, when outsiders fail to understand local customs and 

challenges. When outside government intervention attempts to design a comprehensive 

reform for a country that creates benevolent laws and forms new institutions to make 

markets work, it actually tends to exacerbate the problem.114 

Commanders and planners must strive to understand the true causes of the local 

economic climate. The United States government promotes economic development as a 

part of its global war on terrorism, but the military is often insulated from being able to 

understand local interests.115 Lasting change only occurs through homegrown solutions that 

embody local customs. Historically, at best, the majority of interventions by the military, 

IMF, World Bank and others produce mediocre results for the host country. Remarkably, 

countries lacking outside intervention will normally develop themselves regardless of the 

perceived inability to create positive change. 

For example, without outside intervention, foreign aid, or even international recognition, 

the breakaway Republic of Somaliland in the north of Somalia enjoys peace, economic 

growth, and democratic elections.116 Finding solutions to one’s own problem is often 

easier than finding workable solutions for others. Often it comes down to an individual’s 

mindset. Renowned economist and microfinance advocate C. K. Prahalad stated that when 

outsiders “stop thinking of the poor as victims or as a burden and start recognizing them as 

resilient and creative entrepreneurs and value-conscious consumers, a whole new world of 

opportunity will open up.”117 The ability of a developing state requires homegrown local 

solutions able to link capital to a market economy. Only then will macroeconomic reforms 

begin to work.

Failures in Peru

Sometimes, the lessons of what works and what does not are best learned through 

the failure of others. The history of Peru provides numerous examples of the failures of 

economic plans. Normally, these plans focus primarily on macroeconomic changes that 

need to occur. Plans such as Peru’s Path to Recovery by Carlos E. Paredes and Jeffrey 

Sachs, describe utopian goals of “creating a sound, enduring macroeconomic environment 

in which resources are allocated efficiently and where the state can secure sufficient 
91

resources for redistribution to the poorest members of the society.”118 In broad strokes, 

20th century Peru has experienced four roles: market-supporting role under a primaryexport-led development model prior to the Great Depression; development role during 

the post WWII era of import-substituting-industrialization (ISI); direct role during postdebt-crisis retreat; and back to the pre-ISI liberal state meant to bolster private initiative 

through property rights enforcement and the providing basic public goods.119 In the realm 

of expeditionary economics, two areas from Peru’s past show that well-intentioned plans 

can produce disastrous results. Although the intervention came from within, the period 

of military rule provides lessons for others attempting future expeditionary economics. 

Additionally, the numerous attempts at land reform exemplify how the concentrations of a 

state on causes of problems do not always produce desired effects.

The case of the Peruvian military government provides a unique example that deviates 

from other military governments. One of the greatest differences from other military 

governments stems from the reasons for the military coup. In 1968, the military leadership 

felt that the Peruvian government’s lack of a coherent economic policy created economic 

disparity and caused political coalitions to unravel.120 The military correctly assessed many 

of the issues with the government at that time and believed that the military possessed the 

ability to correct Peru’s economic and political path. Prior to this decision by the military, a 

remarkable change occurred within the military that transformed them from the protectors 

of the country’s elites to an organization that believed they were capable of correcting 

Peru’s economic and political woes. This belief stemmed from the training military leaders 

completed such as the Economic Commission for Latin America and the Caribbean 

(ECLAC) sponsored courses on structuralist economics and exposure to the main writings 

of the early dependency school in the Peruvian National War College (CAEM) training 

programs.121 From this experience and training, top officers viewed the country’s highly 

underdeveloped political and economic structures as the main threats to national security.122

This, coupled with poverty-related guerrilla uprisings of the mid-1960s, further reinforced 

the military’s perception that a sweeping socioeconomic reform was essential.123 Thus, 

the Peruvian military believed that the situation required and demanded their intervention.

The overall goals of the military government centered on achieving greater national 

economic integration and reducing Peru’s dependence on the world economy through 

upgrading the state’s administrative and personnel practices, faster economic growth and 

higher levels of employment, and tighter controls on foreign direct investment (FDI) in the 

extractive sectors.124 Despite the lofty reformist goals of the military regime, its legacy was 

just the opposite. In the end, a main legacy of military rule was increased state-led excessive 

external borrowing, reckless state-owned enterprise (SOE) expansion, heightened conflict 

between the state and domestic entrepreneurs, and the degenerating poverty and income 

distribution.125 

Although the military was well educated and professionally trained, these traits did not 

translate to economic success for Peru. This lack of success occurred during a period where 

the military understood the economic problems of Peru. In an effort to address the major 

economic and political issues, the military took a deliberate state-driven development 

approach. Yet, many of the reforms did not succeed. For instance, the modern-sector 
92

industrial reforms did not quickly absorb the traditional sector into the national economy.126

Additionally, agrarian reforms failed to work because the government did not accept that 

people have their own methods of using and exchanging land.127

One of the main causes for these failures rests with the use of military officers. Although 

the officers possessed high levels of education and training, the technical nature of the 

development program coupled with the managerial requirements did not match with such 

education and training. For instance, the efforts of a strategically placed military cadre to 

act quickly in transforming the political economy led to immediate structural imbalances, 

contradictory development outcomes, the failure to reconcile redistributive goals with the 

chosen model of capital accumulation, and an ambiguous stance toward domestic and 

foreign capital.128 

Additionally, the placement of military officers with a highly capable corps of 

technocrats caused more problems. Problems manifested themselves in the hasty launch 

of the development effort, conspicuous lack of clear goals, and the built-in tensions of a 

convoluted management strategy. This ill-informed strategy merged military and civilian 

policy makers into a top-down hierarchical relationship that operated within the civilian 

policy maker’s bureaucratic turf.129 Throughout this period, the military was often its own 

worst enemy. The military undercut its antioligarchic reforms and alienated the working 

and middle class that they were trying to help by granting generous industrial incentives 

and salary increases until the 1974 fiscal crunch.130 These problems were not isolated 

incidents. For example, the military government lost the support of entrepreneurs by issuing 

the 1970 Job Stability Law granting workers virtual job tenure.131 In the end of the military 

government era, every major approach the military took resulted in increased tensions. 

Heavy reliance on state-owned enterprises (SOEs) to develop the country failed because of 

the tension between the firm’s pursuit of microeconomic investment goals and the central 

government’s macroeconomic and social objectives.132 Capital investment programs 

appeared to favor urban areas over the rest of the country. Debt-backed consumption 

reduced from borrowing for productive investments.

By the 1976 debt crisis, these competing policy approaches failed to support Peru’s 

development goals and left the country’s economy in disarray. Entrepreneurs certainly 

emerged no stronger from the experience of the 1970s, and workers emerged much better 

organized and able to articulate their interests.133 It is difficult to overlook the distributional 

shortcomings of the military’s program, including the propensity of social subsidies to favor 

town over country and the near exclusion of the jungle and sierra regions from the capitalinvestment program.134 As in the 1970s and the early 1980s, the domestic debate over 

how to proceed with economic adjustment wavered between a draconian shock treatment 

and a more gradual approach to stabilization.135 The military’s effort to reorganize society 

into benign classless units actually resulted in enhancement of class-consciousness and 

conflict.136 The military’s failure to promote equitable economic growth and mediate 

societal issues created opportunities for subversive groups to garner support. Although the 

military turned the government back over to civilian leadership in 1980, Peru’s political 

and economic woes continued. The 1982 debt shocks led to a period of chronic financial 
93

insolvency and fiscal retrenchment which prompted a retreat from statist strategies to a 

more indirect mode of state participation in the 1990s.

Development Economics International Successes

Historically, not all development economic efforts in creating economic growth 

within a country fails. Although Peru failed to create economic growth through many of 

its economic policies, other states succeeded using a seemingly similar approach. Chile 

experienced a seventeen-year military government that abandoned the ISI economic 

policies and followed a market strategy. The Chilean government provided political 

freedom to policy makers to experiment with market reform until they obtained the desired 

results.137 This Chilean strategy allowed the state to sustain economic growth even after 

the 1982 debt shocks. The ability to experiment provides a state with one of the best tools 

for economic change. What works for one state does not become a panacea that works 

for another state. For instance, the failure of SOEs in Peru does not mean that economic 

success is impossible when a state supports SOEs. In China, SOEs produced tremendous 

success and helped drive China’s economic growth. The reason for China’s success with 

SOEs originates from their ability to use the SOEs when needed and then gradually reduce 

them while supporting the privatization of the Chinese economy. This support manifests 

itself through recognizing property rights and allowing villages to own and operate new 

firms.138

States creating economic growth normally follow a path unique to that state. Successful 

changes do not result from one state’s imitation of another’s economic path. The economic 

history of Western states provides plenty examples for states and international agencies to 

understand how successful economies occur. The primary factor for states to transition to 

capitalism originates with laws that adapt to the emerging needs of people. However, the 

history and process by which laws absorb the practices, customs, and norms of extralegals 

have been obscured by other historical events.139

Throughout United States history, in the absence of inclusive laws, individuals must 

create and agree upon extralegal rules. The United States government realized the difficulty 

of enforcing exclusive laws that did not work and the futility of making existing laws 

more stringent. Therefore, Congress gradually managed to integrate into one system the 

informal property rules created by millions of immigrants and squatters.140 By creating 

laws that absorbed extralegal arrangements, Congress enabled individuals to become more 

productive and generate economic growth.

Many countries view those operating outside the legal realm as criminals. However, 

positive change occurs when states view the extralegal sector as providing an opportunity 

for the state to improve its economy. For example, in the Homestead Act of 1862, the 

United States government provided settlers with 160 acres of free land if the settlers agreed 

to develop the land. The government’s actions essentially legalized existing extralegal 

practices that were occurring for decades.141 Even in the American Colonial period, 

authorities provided property rights to individuals who improved the land, paid taxes, and 

followed local arrangements among neighbors.142 The efforts to embrace many of the 

settler’s extralegal arrangements led the United States Congress to pass more than five 

hundred different laws to reform the property system between 1785 and 1890.143 This 

exemplifies the effort it took to provide inclusive laws that created a powerful economic 

engine.
94

Peru’s Successes

In the 1990s, Peru provides another example of how states can create economic growth 

through multiple means. When the Alberto Fujimori administration emerged, fifty percent 

of the population lived in poverty, half of which lived in extreme poverty.144 Many leading 

economists of the time proposed solutions for Peru to create economic growth. Top Peruvian 

economists teamed with Harvard professor Jeffrey Sachs to generate the macroeconomic 

plan called “A Plan for Economic Stabilization and Growth.”145 However, the Fujimori 

administration took a different path. In order to take the country out of hyperinflation 

and entice foreign investment, Fujimori enacted several macroeconomic reforms that 

eliminated government controlled prices and subsidies, introduced emergency taxes, 

established a managed floating-exchange-rate, and reduced tariffs on trade.146 Although 

such measures created hardships among the most vulnerable in Peru, Fujimori made efforts 

to communicate the goals of the central government to discover the desires of the locals and 

address their needs. By creating the Programa de Emergencia Social (PES) and assembling 

organizations such as the Catholic Church and Non-governmental Organization (NGOs) 

to participate in the program, Fijimori established the central coordinating committee 

and local emergency committees that assisted in creating development solutions.147 Such 

organizations provided a voice for grassroots leaders and contributed to the undermining 

of support for the Shining Path.

President Fujimori relied on market forces for much of the economic recovery. He 

resisted outside intervention and looked for ways to reform Peruvian society. Property 

reforms built respect for the law and alleviated many individual’s grievances that feared the 

government’s expropriation of their extralegally held land. The Fujimori government made 

it convenient for people to file complaints about excessive bureaucracy by establishing 

the Administration Simplification Tribunals. The televised tribunals allowed the people 

to directly examine improvements in different types of bureaucratic processes.148 During 

this time, Peru provides an example of a state that became inclusive to its population. This 

inclusion also extended to coca farmers. Such inclusion benefitted the state and the farmers. 

The legal recognition of coca farmers resulted in information that helped the government 

eliminate many terrorist and drug trafficker sanctuaries.149 Reducing bureaucracy, 

eliminating institutions that protect the few, creating agencies to support reforms, providing 

infrastructure and public services, all worked toward building a stronger economic growth 

machine.

Emergence of Market Economy

Economic systems are complicated, and no single policy prescription, even if precisely 

followed, is likely to be sufficient to ensure rapid, sustainable growth over time.150

Generally, for a state to establish a market economy does not require destruction and 

rejection of existing arrangements. When intervening in a state’s economic system, elites 

and bureaucracies who benefit from the previous system will resist change. However, in 

order to improve economic growth within a society, the excluded must be included in 

the legal system that has traditionally shut them out. The ability to gain acceptance from 

both groups is extremely difficult to do since most policy makers do not fully understand 

local level activities. No simple answer exists to bring both sides to a consensus. Creating 

redistributive expectations or establishing specific goals will exacerbate problems. The free 

market operates with only general goals.151 By setting general goals, opportunities emerge 
95

where the state can integrate the informal institutions and provide the needed level of 

protection once made available by the extralegal sector. The state’s challenge is to embrace 

the potential solutions that surface. Markets everywhere emerge in unplanned, spontaneous 

ways, adapting to local traditions and circumstances, and not through externally designed 

reforms.152

Importance of the Law over Other Variables

Understanding the laws, economic policies, and practices that prevent inclusion 

provides the first step for a country to change its economic health. Recognizing the approach 

to take constitutes one of the most difficult aspects of expeditionary economics. Although 

commanders and planners should understand the historical background of successes and 

failures of economic intervention, such understanding often fails to provide a good guide 

for future problems. The responsibility for the macroeconomic policy management rests 

with the state. However, policies that worked in the past does not translate to the same 

policies working in the future. When prescribing past successful economic policies, the 

state assumes that the economies, to which they are applying these policies, will continue 

to behave or operate in fundamentally the same way as in the past or at least in similar 

fashion.153 

Blaming the poor economic growth on historical factors is a similar fallacy as blaming 

its demise on cultural reasons. While cultural understanding is extremely important 

to successful expeditionary economics, culture should be viewed as an opportunity to 

generate economic growth instead of a cause of economic woes. However, David Landes 

of Harvard University Department of Economics claims that growth is primarily about 

culture and that some societies have hard-working, enterprising people whereas others do 

not.154 This view embodies a very dangerous argument since such arguments concentrate 

on the differences between people and groups instead of what they have in common. For 

instance, all cultures have entrepreneurs. However, not all cultures accept such groups and 

fail to encourage their growth. True, some cultures tend to focus on protecting elites, but 

this is common across most cultures and must be handled both politically and legally. The 

legal reform process required to bring the extralegal entrepreneurs into one official legal 

framework is essentially a cultural exercise: adapting Western market and corporate law 

to the vibrant cultures and customs of the developing state’s new entrepreneurs.155 This 

change in culture does not transpire overnight. It takes time for individuals to recognize 

how cultural arguments provide a shelter for the effects of good political institutions and 

laws. The arguments made individuals who continue to use culture as a reason for the 

state’s economic success or failures fall short. Prior to the “East Asian miracle,” many 

economists blamed a Confucian culture for the lack of economic success in East Asia, but 

post-miracle, touted such culture as the catalyst for economic success.156 All culture can 

become supportive of economic development. Much behavior that is attributed to cultural 

heritage is not the inevitable result of people’s ethnic or idiosyncratic traits but of their 

rational evaluation of the relative costs and benefits of entering the legal property system.157

The importance of inclusive laws cannot be overemphasized. American economists, 

Douglass North and Oliver Williamson, argue that favorable economic performance 

requires the following: a market grounded in a sound set of domestic institutions that 

includes formal rules such as statutes, common laws, regulations, and property rights 

embodied in the judicial system; informal rules in the way of conventions, norms, and 
96

self-imposed codes of conduct; and a wide range of state and societal organizations.158

Successful systems embrace many of the social contracts pieced together by knowledgeable 

people familiar with the local environment. One of the main legal obstacles originates from 

the law’s inability of the official law to maintain pace with popular initiative, causing the 

government to lose control.159 

To improve the law to support economic revival, one of the greatest hurdles a state 

must overcome stems from the legal profession. Although the legal profession perfects all 

the artifacts of formal property: titles, records, trademarks, copyrights, promissory notes, 

bills of exchange, patent rights, and shares of corporate stock, few lawyers understand the 

economic consequences of their work.160 The political actions that embrace grassroots 

solutions are vital to create inclusive laws that the majority accepts. Therefore, the state 

must employ a careful strategy for dealing with the legal profession if the government 

moves to integrate the extralegal sector. By viewing extralegal individuals as enterprising 

rather than criminals, the state will begin to integrate them into the formal legal system. The 

Western experience shows that inclusion is a threefold task: find the real social contracts on 

property, integrate them into official law, and craft a political strategy that makes reform 

possible.161

When Peru made important parts of the law accessible for all people, the state deprived 

the Shining Path of fertile ground for its insurgency. In economic matters, people do not rebel 

because they are poor, rather because they are excluded from the system.162 While courts 

can help promote inclusive economic activity, they are not the sole answer to improving the 

system. The costs of legal action for small transactions often outweigh the benefits gained 

from the protection of property through the legal process.163 When politicians respond to 

society’s needs and discover ways to establish more honest courts, judges, and police, 

economic growth becomes possible.164

Conclusion

Commanders and planners face incredible challenges when they engage in expeditionary 

economics. This immense undertaking requires contextual understanding of the causes 

of grievances within the state. With this understanding, commanders and planners can 

influence a state to change laws and economic practices. On account of the political nature 

of creating change that produces economic growth, the state’s leadership cannot focus 

solely on meeting the demands of the poor or excluded. However, change does occur when 

the state takes the perspective of the poor, co-opts the elite, and addresses exclusive law 

and technical bureaucracies that exist only to further the current economic system.165 This 

process requires knowledge of not only how markets work from the macroeconomic level, 

but also entails searching the local level for the social norms that create the extralegal 

agreements. By incorporating these agreements, the state protects property and person and 

undercuts the extralegal arrangements that undermine the respect for the rule of law. If the 

state fails to protect property and person, history shows how even a murderous Mafia can 

meet a genuine social need when law and order collapse.166 

This does not imply the necessity to incorporate all local arrangements. In fact, many 

such arrangements will only benefit the few and therefore, negatively effect economic 

growth. Instead, the state must utilize what actually works within the extralegal arrangements 

in order to get extralegal individuals to voluntarily adapt to the new circumstances.167 The 

extreme entrepreneurial abilities of individuals in the extralegal sector provide everything 
97

from basic road infrastructure, water supply, sewage systems, and electricity to actually 

administering markets, justice, and laws. When the state creates quality laws that enable 

the inclusion of the majority of its citizens, the entrepreneurs become a part of a global 

market that increases the state’s economic growth. Politicians should guide the change 

and give it an appropriate institutional framework so that the people can properly use and 

govern the changed environment.168 

When the state’s goal is to become a member of the modern market economy, the 

state’s leadership must create a system that gives entrepreneurs access to the legal system. 

Such a system requires incorporating successful extralegal processes along with ensuring 

simple entry cost into the new system in both time and money. Additionally, transparency is 

a crucial aspect to the system’s success. In Peru’s case, the Fujimori government televised 

individual cases that showed how the current law changed. The strength of the press and 

judiciary is important in order to effectively scrutinize the government’s actions. However, 

this is not always possible at the onset of creating change that increases economic growth.

The challenge for those conducting expeditionary economics is to encourage and 

influence the state to create legal and institutional systems that reflect a new reality. This 

new reality allows the fledgling economy that spontaneously emerges to function in an 

orderly fashion and enables competitive formal businessmen and merchants to produce 

with security.169 Each state has a unique and complex history, culture, and set of grievances 

that may seem similar to other situations. However, each state requires an approach that 

is specific and particular to that state. Commanders and planners should not view aspects 

culture and history as a barrier to economic development. Rather, they should incorporate 

such aspects with the intention of supporting economic development. In order to provide 

successful and workable solutions, it is important to decentralize lawmaking and decision 

making to local governments. By transferring these responsibilities to local and regional 

governments, they are better able to enact beneficial laws since they are closer to the local 

issues, struggles and grievances. Regardless of the method used to create inclusive laws, 

the central government must find the means to incorporate existing arrangements. The 

United States Congress provides an excellent historical example of how the United States 

incorporated land laws through an iterative process of over five hundred laws in a span 

of over a hundred years. Although not perfect, researchers purport that the bottom-up 

approach to law is superior for economic development to more top-down approaches.170 

The subject of expeditionary economics covers an incredible amount of areas for a 

state. The right plan does not exist and is itself a symptom of a misdirected approach.171

Although no panacea exists to expertly guide the military in the conduct of expeditionary 

economics, contextual understanding of the underdeveloped state remains essential. Prior 

to conducting expeditionary economics in a state, commanders and planners can garner 

information from aid agencies that have individuals who have gained experience in a 

particular local setting on a particular problem. These are the individuals who can describe 

what is and is not working within a local environment. Still, this remains only one piece 

of an extremely complicated economic problem. Regardless what the military may think 

of local grievances, the institutions work most effectively, if at all, if they are homegrown. 

With contextual understanding, the military through expeditionary economics, can assist a 

state to establish a system that generates an engine of economic growth. 
98

Notes

1. Field Manual 3-07: Stability Operations, October 2008, 2-8 – 2-9.

2. Carl J. Schramm, “Expeditionary Economics: Spurring Growth After Conflicts and 

Disasters,” Foreign Affairs 89, no. 3 (May/June 2010): 89.

3. Oxford Dictionaries, http://www.oxforddictionaries.com/view/entry/m_en_us1245619#m_

en_us1245619 (accessed August 31, 2010).

4. Oxford Dictionaries, http://www.oxforddictionaries.com/view/entry/m_en_us1243059#m_

en_us1243059 (accessed August 31, 2010).

5. Erik S. Reinert, “Increasing Poverty in a Globalized World: Marshall Plans and Morgenthau 

Plans as Mechanisms of Polarization of World Incomes,” In Rethinking Development Economics. 

edited by Ha-Joon Chang (London: Anthem Press, 2003), 455.

6. William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest have 

done so much Ill and so Little Good, (London: Penguin Books Ltd., 2006), 345.

7. Easterly, 14-15.

8. David Scott Palmer, “Introduction: History, Politics, and Shining Path in Peru,” In The 

Shining Path of Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 1.

9. Palmer, The Shining Path of Peru, 4.

10. Palmer, 5.

11. Palmer, 7.

12. Hernando de Soto, The Other Path: The Economic Answer to Terrorism (New York: Basic 

Books, 1989), xx.

13. de Soto, The Other Path, 235.

14. Palmer, The Shining Path of Peru, 5.

15. Palmer, 7.

16. Palmer, The Shining Path of Peru, 9.

17. Palmer, 11.

18. Palmer, 12.

19. de Soto, The Other Path, 232.

20. Palmer, The Shining Path of Peru, 13.

21. Ibid., 14.

22. Martin Khor, “Globalization, Global Governance and the Dilemmas of Development,” In 

Rethinking Development Economics, edited by Ha-Joon Chang (London: Anthem Press, 2003), 533. 

23. Palmer, The Shining Path of Peru, 14.

24. Patricia Oliart, “Alberto Fujimori: “The Man Peru Needed?”,” In Shining and Other Paths: 

War and Society in Peru, 1980-1995, edited by Steve J. Stern (Durham: Duke University Press, 

1998), 412.

25. Palmer, The Shining Path of Peru, 14.
99

26. Erik S. Reinert, How Rich Countries Got Rich and Why Poor Countries Stay Poor (New 

York: PublicAffairs, 2007), 47.

27. Reinert, 204.

28. William J. Baumol, Robert E. Litan, and Carl J. Schramm, Good Capitalism, Bad 

Capitalism, and the Economics of Growth and Prosperity (New Haven: Yale University Press, 

2007), 55.

29. Carol Wise, Reinventing the State: Economic Strategy and Institutional Change in Peru 

(Ann Arbor: The University of Michigan Press, 2003), 179.

30. Moises Arce, Market Reform in Society: Post-Crisis Politics and Economic Change in 

Authoritarian Peru (University Park: The Pennsylvania State University Press, 2005), 39.

31. Ibid., 41.

32. Palmer, The Shining Path of Peru, 2.

33. Cynthia McClintock, Revolutionary Movements in Latin America: El Salvador’s FMLN 

and Peru’s Shining Path (Washington: United States Institute of Peace Press, 1998), 262.

34. Carlos Ivan Degregori, “The Origins and Logic of Shining Path: Two Views,” In The 

Shining Path of Peru, edited by David Scott Palmer (New York: St. Martin’s Press 1994), 52.

35. Ibid.

36. Gustavo Gorriti, “Shining Path’s Stalin and Trotsky,” In The Shining Path of Peru. edited 

by David Scott Palmer (New York: St. Martin’s Press, 1994), 174.

37. Gorriti, The Shining Path of Peru, 175.

38. Degregori, The Shining Path of Peru, 53.

39. McClintock, Revolutionary Movements in Latin America, 65.

40. Ibid.

41. Gorriti, The Shining Path of Peru, 176.

42. McClintock, Revolutionary Movements in Latin America, 65-66.

43. David Scott Palmer, “Conclusion: The View From the Windows,” In The Shining Path of 

Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 262.

44. McClintock, Revolutionary Movements in Latin America, 14.

45. Palmer, The Shining Path of Peru, 20.

46. Cynthia McClintock, “Theories of Revolution and the Case of Peru,” In The Shining Path 

of Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 247.

47. Tom Marks, “Making Revolution with the Shining Path,” In The Shining Path of Peru, 

edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 215.

48. Marks, The Shining Path of Peru, 215.

49. Marks, 213.

50. Billie Jean Isbell, “Shining Path and Peasant Responses in Rural Ayacucho,” In The Shining 

Path of Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 90.
100

51. Palmer, The Shining Path of Peru, 23.

52. Palmer, The Shining Path of Peru, 269.

53. Marks, The Shining Path of Peru, 218.

54. de Soto, The Other Path, xxiv.

55. Palmer, The Shining Path of Peru, 22.

56. de Soto, The Other Path, xvii.

57. de Soto, The Other Path, xix.

58. McClintock, Revolutionary Movements in Latin America, 167.

59. Ronald H. Berg, “Peasant Responses to Shining Path in Andahuaylas,” In The Shining Path 

of Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 120.

60. Degregori, The Shining Path of Peru, 60.

61. Degregori, The Shining Path of Peru, 52.

62. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails 

Everywhere Else (New York: Basic Books, 2000), 81.

63. Michael L. Smith, “Shining Path’s Urban Strategy: Ate Vitarte,” In The Shining Path of 

Peru, edited by David Scott Palmer (New York: St. Martin’s Press, 1994), 155.

64. de Soto, The Mystery of Capital, 154.

65. Smith, “Shining Path’s Urban Strategy, 210.

66. Baumol, Litan, and Schramm, 143.

67. Reinert, 47.

68. Baumol, Litan, and Schramm, 6.

69. Baumol, Litan, and Schramm, 25.

70. Baumol, Litan, and Schramm, 15.

71. Baumol, Litan, and Schramm, 7.

72. de Soto, The Mystery of Capital, 62.

73. de Soto, The Other Path, 132.

74. de Soto, The Mystery of Capital, 176.

75. de Soto, The Other Path, 238.

76. de Soto, The Mystery of Capital, 55.

77. de Soto, The Mystery of Capital, 59.

78. de Soto, The Other Path, 11.

79. Baumol, Litan, and Schramm, 75.

80. de Soto, The Mystery of Capital, 69.

81. de Soto, The Mystery of Capital, 174.

82. de Soto, The Other Path, 245.

83. de Soto, The Mystery of Capital, 157.
101

84. de Soto, The Mystery of Capital, 188.

85. de Soto, The Other Path, xxi.

86. de Soto, The Other Path, 234.

87. de Soto, The Mystery of Capital, 71.

88. de Soto, The Mystery of Capital, 176.

89. de Soto, The Other Path, 26.

90. de Soto, The Mystery of Capital, 35.

91. de Soto, The Mystery of Capital, 190-191.

92. de Soto, The Mystery of Capital, 41.

93. de Soto, The Mystery of Capital, 44.

94. de Soto, The Mystery of Capital, 66.

95. de Soto, The Mystery of Capital, 5.

96. de Soto, The Mystery of Capital, 47-48.

97. Baumol, Litan, and Schramm, 3.

98. de Soto, The Mystery of Capital, 34.

99. de Soto, The Mystery of Capital, 71.

100. Baumol, Litan, and Schramm, 87.

101. Baumol, Litan, and Schramm, 187.

102. Jeffrey D. Sachs, The End of Poverty: Economic Possibilities for Our Time (New York: 

Penguin Books, 2005), 3.

103. Easterly, 76.

104. Wise, 38.

105. Easterly, 6.

106. Baumol, Litan, and Schramm, 64.

107. Joseph Stiglitz, Joseph Stiglitz and the World Bank: The Rebel Within (London, Wimbledon 

Publishing Company, 2001), 239.

108. Easterly, 63.

109. Easterly, 77.

110. Easterly, 101.

111. de Soto, The Mystery of Capital, 211.

112. Easterly, 61.

113. Easterly, 18.

114. Easterly, 100.

115. Easterly, 312.

116. Easterly, 335.

117. C. K. Prahalad, The Fortune at the Bottom of the Pyramid (Upper Saddle River: Wharton 

School Publishing, 2006), 1.
102

118. Carlos E. Paredes and Jeffrey D. Sachs, “Introduction and Summary,” In Peru’s Path to 

Recovery: A Plan for Economic Stabilization and Growth, edited by Carlos E. Paredes and Jeffrey 

D. Sachs (Washington: The Brookings Institution, 1991), 38.

119. Wise, 18.

120. Wise, 11.

121. Wise, 83.

122. Wise, 83.

123. Wise, 85.

124. Wise, 96-97.

125. Wise, 84.

126. Wise, 103.

127. de Soto, The Mystery of Capital, 168.

128. Wise, 86.

129. Wise, 92.

130. Wise, 94.

131. Wise, 94.

132. Wise, 107.

133. Wise, 114.

134. Wise, 115.

135. Wise, 175.

136. Wise, 96.

137. Wise, 30-31.

138. Baumol, Litan, and Schramm, 56.

139. de Soto, The Mystery of Capital, 109.

140. de Soto, The Mystery of Capital, 53.

141. de Soto, The Mystery of Capital, 107-108.

142. de Soto, The Mystery of Capital, 119.

143. de Soto, The Mystery of Capital, 128.

144. Wise, 183.

145. Wise.

146. Wise, 184-185.

147. Isabel Coral Cordero, “Women in War: Impact and Responses,” In Shining and Other 

Paths: War and Society in Peru, 1980 – 1995, edited by Steve J. Stern (Durham: Duke University 

Press, 1998), 367.

148. de Soto, The Other Path, xxviii.

149. de Soto, The Other Path, xxvii.
103

150. Baumol, Litan, and Schramm, 6.

151. Easterly, 12.

152. Easterly, 61.

153. Baumol, Litan, and Schramm, 43.

154. David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some 

So Poor (New York: W.W. Norton, 1999), 516-517.

155. de Soto, The Other Path, xxxvii.

156. Ha-Joon Chang, “The East Asian Development Experience,” In Rethinking Development 

Economics. edited by Ha-Joon Chang (London: Anthem Press, 2003), 119.

157. de Soto, The Mystery of Capital, 226.

158. Wise, 4.

159. de Soto, The Mystery of Capital, 149.

160. de Soto, The Mystery of Capital, 199.

161. de Soto, The Mystery of Capital, 151.

162. de Soto, The Other Path, xxxv.

163. de Soto, The Other Path, 177.

164. Easterly, 117.

165. de Soto, The Mystery of Capital, 190.

166. Easterly, 89.

167. de Soto, The Other Path, 245.

168. de Soto, The Other Path, 240.

169. de Soto, The Other Path, 245-246.

170. Easterly, 97.

171. Easterly, 5.
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105

Comparing Models for the Restoration of Essential Services during 

Counterinsurgency Operations

by

Major Anthony P. Barbina - United States Army

Abstract

What is the military’s most effective model for restoring essential services during 

counterinsurgency operations? That question drove this monograph to compare the most 

popular restoration model, the SWEAT Model, against a new model, the Factor-Precedence 

Model. This monograph explains why the Factor-Precedence Model is more effective 

than the SWEAT Model for restoring essentials services during past, present, and future 

counterinsurgency operations.

Counterinsurgency operations include those military, paramilitary, political, economic, 

psychological, and civic actions taken by a government to defeat an insurgency. During 

counterinsurgency operations, restoring essential services, the infrastructure and 

supporting services that provide survival and comfort needs to the people, has become 

an important way to increase government legitimacy and decrease insurgent support. To 

leverage the positive impacts of essential services efforts, Department of Defense guidance 

and resource allocations require military forces to execute restoration of services and 

infrastructure. Because of the complex interactions required to restore essential services, 

counterinsurgency practitioners need an effective model to understand the environment, 

plan and analyze options, and conduct the work.

Military and civilian experts have produced many models to provide simple tools that help 

practitioners understand, prioritize, and execute essential services restoration. The SWEAT 

Model has become the most popular of these models because the SWEAT Model provides 

an easy way to think about infrastructure categories while conducting projects to improve 

those categories. Many units have used the SWEAT Model in Iraq and Afghanistan since 

2004. As an alternative to the SWEAT Model, the author proposes a new model called the 

Factor-Precedence Model that develops processes for geographic and cultural evaluation 

of services, prioritization of requirements, and continuous assessment during essential 

services improvements. The Factor-Precedence Model leverages a whole of government 

approach to plan and execute improvements within the context of each area’s needs.

This monograph assesses the effectiveness of the SWEAT and Factor-Precedence Models 

using two case studies and five comparison criteria: simplicity, flexibility, reproducibility, 

sustainability, and links to political and military objectives. In Case A, 1st Cavalry Division 

and its subordinate units used the SWEAT Model in Baghdad, Iraq (2005). Despite simple 

application and short term successes after implementation, the SWEAT Model used a 

cookie-cutter approach throughout Baghdad that limited analysis with regards to cultural, 

geographical, and regional factors. In Case B, 1st Cavalry Division and its subordinate 

brigades employed a model similar to the Factor-Precedence Model in Baghdad, Iraq (2009). 

1st Cavalry Division’s 2009 model applied a holistic outlook and focused on re-assessment, 

much like the Factor-Precedence Model, to allow for better analysis of needs, facilitate 

flexible execution across Baghdad, and permit project prioritization to meet local needs. 

To further evaluate the Factor-Precedence Model’s usefulness, this monograph applies 

the Factor-Precedence Model within 10th Mountain Division’s operational framework in 
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Kandahar, Afghanistan (2010). The Afghanistan illustrative example shows the flexibility 

and applicability of the Factor-Precedence Model in not only varying geographical and 

cultural regions but also across the range of military operations.

Results matter. The Factor-Precedence Model provides the most flexibility, allows for 

execution in a variety of situations, and links better to military objectives. Military planners 

should adopt a holistic approach like the Factor-Precedence Model and integrate existing 

planning, intelligence, engineering, and analysis tools into the model. Further research can 

improve the application of the Factor-Precedence Model for other government agencies 

and can determine execution techniques during the range of military operations.

Introduction

“Essential though it is, the military action is secondary to the political one, 

its primary purpose being to afford the political power enough freedom to work 

safely with the population... ‘A revolutionary war is 20 percent military action 

and 80 percent political’ is a formula that reflects the truth.”1

- David Galula

Counter-Insurgency Warfare: Theory and Practice, 1964

This monograph seeks to find the most effective model for restoring essential services 

during counterinsurgency operations. Although the restoration of essential services plays 

an important part in both major combat and humanitarian operations, this monograph will 

focus on restoration efforts and models used during counterinsurgency operations.2

 As 

David Galula, French counterinsurgency veteran of the Greek Civil War, Indochina War, 

and Algerian War, recognized in 1964, winning a counterinsurgency fight requires military 

organizations to apply military and nonmilitary instruments of power in support of the 

legitimate host nation government. As shown in historical American counterinsurgency 

operations, restoring essential services has become one of the primary nonmilitary 

instruments of power. To execute essential services restoration, military and civilian experts 

have developed a variety of useful models to help facilitate planning and shape operations. 

This monograph compares application of the military’s most popular restoration model, 

the Sewer, Water, Electricity, Academics, and Trash (SWEAT) Model, with a new model 

developed herein called the Factor-Precedence Model. The monograph applies a case 

study framework that assesses both models in terms of five evaluation criteria: simplicity, 

flexibility, reproducibility, sustainability, and links to political and military objectives. By 

the end of this monograph, the reader should have a better appreciation of why essential 

services models exist and why the Factor-Precedence Model is more effective than the 

SWEAT Model, or other historical models, for restoring essential services during present 

and future counterinsurgency operations.

Organization

This monograph includes seven main body sections and five appendices that compare the 

effectiveness of the SWEAT and Factor-Precedence Models. Section 1 of this monograph 

introduces the primary research question, provides background on essential services, and 

discusses the operational and intellectual impetus for the monograph. Section 2 conducts 

a literature review of the essential services debate and provides an overview of existing 

models. Section 3 provides an overview of the Army’s most utilized essential services 

restoration model, the SWEAT Model. Section 4 describes the Factor-Precedence Model, 
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a new model based in doctrine, adjusted through the lens of accepted theory, and refined 

through historical study. Section 5 outlines the case analysis framework and walks through 

the two similar case studies, set in Baghdad, Iraq, that portray use of the SWEAT and 

Factor-Precedence Models. Section 6 compares and analyzes the two Iraq case studies 

to determine the most effective model. The section then applies an illustrative example 

from Afghanistan that tests the applicability of the Factor-Precedence Model and facilitates 

inferences about future use and applications of the model. Section 7 concludes this effort 

by establishing recommendations for future actions and by proposing further research 

concerning the Factor-Precedence Model. The five appendices provide supporting 

information including definitions, acronyms, historical examples, model overviews, and a 

detailed explanation on how to use the Factor-Precedence Model.

Background

The United States (US) and its allies have a long history of conducting operations against 

insurgencies. According to David Galula’s Counterinsurgency Warfare: Theory and 

Practice, insurgency is “a protracted struggle conducted methodically to attain specific 

intermediate objectives leading finally to the overthrow of the existing order.”3

 Similar 

to Galula, Army Field Manual (FM) 3-24 Counterinsurgency defines insurgency as “[a]n 

organized movement aimed at the overthrow of a constituted government through the use 

of subversion and armed conflict.”4

 Both definitions outline the fact that insurgents counter 

an existing government order and vie with that government for the support of the people. 

FM 3-24 logically nests with Galula’s thoughts by describing counterinsurgency as “[t]

hose military, paramilitary, political, economic, psychological, and civic actions taken by a 

government to defeat insurgency.”5

 The critical lessons from Malaya, Algeria, and Vietnam 

counterinsurgency efforts outlined in Appendix 3 provide essential foundations for the 

counterinsurgency techniques in use today and inform practitioners how to effectively use 

non-military tools like the restoration of essential services.6

This monograph focuses on the restoration of essential services. Essential services 

consist of the infrastructure and supporting services that provide survival and comfort 

needs to the people while sustaining life. Examples of survival and comfort needs generally 

include food, water, shelter, basic sanitation, and emergency health care. Essential service 

requirements vary by population density, historic norms and current state of infrastructure, 

geographic region and climate, and cultural context.7

 According to Army FM 3-07 Stability 

Operations, restoring essential services within regional context allows the host nation’s 

government to increase support from the population and consolidate control in populated 

areas. During an insurgency, the people’s needs and required government support become 

much more complex in part because the insurgents act to undermine or subvert the 

government’s efforts to provide or restore essential services.8

The current models restoring essential services during counterinsurgency operations 

have evolved from British, French, and American counterinsurgency experiences over the 

last seventy years. Appendix 3 not only provides historical counterinsurgency experiences, 

but the appendix also provides context for modern American essential services efforts. 

Efforts to restore essential services ultimately contribute to achieving a stable democracy 

and a sustainable economy while improving the social well-being of the population.9

This monograph focuses on the restoration of essential services within the context of 

counterinsurgency as opposed to major combat or nation-building operations.10 When 

attempting to restore essential services during an insurgency, counterinsurgents must find 
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the model that provides the most effective representation of components, relationships, and 

dynamics for effective essential services restoration.

Operational and Intellectual Relevance

While every military mission has unique circumstances, essential services restoration in 

a counterinsurgency environment challenges practitioners operationally and intellectually 

in ways important to this monograph. Evaluating the effectiveness of essential services 

models has usefulness to counterinsurgency’s operational and intellectual debates. 

Operationally, the military has conducted essential services restoration missions in the past 

and will continue to conduct them in the future. The need for commanders and practitioners 

to have a solid tool to restore essential services has increased debate on the need for and 

use of effective models. Intellectually, debate continues concerning the definition of needs, 

procedures for evaluating geographical and cultural impacts, and potential techniques 

for prioritization and execution support. Understanding the operational and intellectual 

relevance of this monograph helps set the tone for the case studies and model evaluation.

Operational Relevance

Essential services restoration presents a mission that has operational relevance to the 

Army’s past, present, and future requirements. Militaries around the world have conducted 

counterinsurgency operations that included essential services restoration prior to World War 

II. As outlined in detail by Appendix 3, the restoration of essential services became even more 

important after World War II based on the increased importance of infrastructure on daily life 

and on the increased instability around the world. From Great Britain’s counterinsurgency 

effort in Malaya to the America’s efforts in Iraq and Afghanistan, history continues to 

demonstrate the relevance of essential services restoration and the need for effective ways 

to execute it.11 Historically, Army active duty, Reserve, and National Guard units have 

become involved in restoration operations regardless of force structures. In anticipation 

of future requirements, the Department of Defense has directed the military to plan for, 

support, and conduct essential services restoration during counterinsurgency operations. 

Department of Defense Directive (DoDD) 3000.05: Military Support for Stability, Security, 

Transition, and Reconstruction (SSTR) Operations officially elevated stability operations 

to a “core” military mission on par with offensive and defensive operations and tasked the 

military to execute restoration of essential services tasks.12 Government leaders also expect 

the military to support and restore essential services in specific, often dangerous, areas of 

operation because of limitations in Department of State’s personnel capacity and security 

capabilities.13 Based on the recurring theme and guidance to conduct essential services 

restoration, this monograph analyzes some of the most effective and holistic ways to do it.

This monograph also has relevance to operational commanders because, besides being 

directed to execute essential services restoration, practitioners can gain support for the 

host-nation government and decrease support for an insurgency by improving essential 

services. FM 3-24 encourages counterinsurgents to not only fight insurgents but also to 

“use their capabilities to meet the local populace’s fundamental needs as well.”14 Using the 

Systems Dynamic Model shown in Figure 1, US Navy Captain Brett Pierson, a member 

of the Joint Staff’s Warfighting Analysis Division, modeled the historical connections 

between improvements in essential services and the influence on a neutral populace 

during counterinsurgency operations.15 In areas where services suffered or where the 

insurgents successfully denied services to the people and blamed it on the government, 
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counterinsurgents paid the price with less population support and less success. In areas where 

the legitimate government improved services and increased the population’s satisfaction 

with the provided services, counterinsurgents gained population support and had increased 

success. Based on Captain Pierson’s work and other needs-based studies linking positive 

outcomes with services improvement, the US has increase the operational significance, 

resourcing, and support for essential services restoration during counterinsurgency efforts 

Since essential services prove operationally relevant and since the military has limited 

resources, time and expertise in essential services, counterinsurgents must develop effective 

ways to understand and improve services.

Figure 1: Mapping of Essential Services Impacts Using the Systems Dynamic Model16

Intellectual Relevance

A key element of the intellectual debate balances the best techniques to restore services. 

Based on the operational requirement to restore essential services, concerned commanders 

and counterinsurgency practitioners need a simple, yet effective, tool to overcome the lack 

of technical training and experience needed to conduct restoration tasks. A model describes 

“a set of abstract and general concepts and propositions that integrate those concepts into a 

meaningful configuration” of components, relationships, and dynamics.17 The military uses 

a variety of flexible doctrinal, technical, or conceptual models that allow military members 

to deal with problems using a variety of techniques. In counterinsurgency model-making, 

the model usually describes an operational approach that shapes the language and conduct 

of operations.18 During essential services restoration, models facilitate planning, analysis, 

and project selection and help non-technical experts make improvements without the 

years of training and experience technical provided to professions like engineering. Going 

without a model would remove an important tool for military and diplomatic practitioners.

In order to best employ limited resources, another important intellectual concern centers 

on the definition of needs in restoring basic services. The military’s doctrinal definition 

for essential services allows for flexibility in interpretation among practitioners for what 
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people truly need.19 Due to the differences in geographical and cultural development seen 

throughout the world, the word needs means something different everywhere practitioners 

operate. According to the National Training Center’s SWEAT Smart Book, engineers focus 

on the infrastructure, projects, and capacity improvement to meet needs.20 According to 

the Department of State’s Post-Conflict Reconstruction Essential Task List, Civil Affairs 

and Department of State personnel focus on governance, economics, engagement, growth, 

and development to meet needs.21 Common vernacular and procedures coupled with an 

effective model could encourage inter-service and interagency approaches focused not 

only on projects but also engagements and development. To address the intellectual debate, 

the literature review in Section 2 helps to define essential services and explain existing 

approaches to the problem.

2 – Essential Services Literature and Restoration Models

“The long-term goal is to help develop indigenous capacity for securing essential 

services, a viable market economy, rule of law, democratic institutions, and a 

robust civil society... Many stability operations tasks are best performed by 

indigenous, foreign, or US civilian professionals. Nonetheless, US military forces 

shall be prepared to perform all tasks necessary to establish or maintain order when 

civilians cannot do so.”22

- Department of Defense Directive 3000.05

As shown in Section 1 and the DoDD 3000.05 quote provided above, concerned 

commanders and counterinsurgency practitioners need an effective model based on 

valid theory and literature to conduct restoration work. Counterinsurgency authors have 

developed military and diplomatic theories to enable legitimate governments win a fight 

against insurgencies. Within those counterinsurgency theories rests an important principle 

of meeting constituent’s needs that contributes to this monograph. To meet population needs 

and ensure social well-being, the military has conducted operations to restore essential 

services. Educators, planners, consultants, and engineers have produced many models, to 

include the SWEAT Model, to provide simple tools that help practitioners understand, 

prioritize, and execute services restoration. Since 2004, most units have used some form 

of the SWEAT Model in Iraq and Afghanistan to help them restore essential services and 

support the host nation government.23

Counterinsurgency and Essential Services Literature

Counterinsurgency literature demonstrates how effective counterinsurgents fought 

against insurgents and provides the historical context for essential services restoration 

during counterinsurgencies. Since the early 20th Century, winning support of the populace 

has become a fundamental principle of both insurgency and counterinsurgency literature. 

In 1937, Chinese revolutionary, guerilla warfare strategist, political theorist, and leader of 

the Chinese Revolution Mao Tse-Tung wrote that “[b]ecause guerrilla warfare basically 

derives from the masses and is supported by them, it can neither exist nor flourish if it 

separates itself from their sympathies and cooperation.”24 In 1952 during the Malayan 

Emergency, General Sir Gerald Templer, the British High Commissioner and commander 

of troops in Malaya, linked winning the “hearts and minds” of the Malayan people with 

improving popular perception and counterinsurgency success. In 1964, after taking part 

in the Algerian War as a French counterinsurgent, David Galula stated “the support of the 

population is as important for insurgents as it is for counterinsurgents.”25
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Literature published since the beginning of America’s counterinsurgency operations in 

Afghanistan and Iraq carries the same emphasis on winning support of the population. 

Dr. Kalev Sepp, senior defense analyst at US Naval Post Graduate School, discussed the 

importance of the population and the fulfillment of population needs to ensure satisfaction. 

Dr. John Nagl, former military officer, co-author of the US Army and Marine Corps 

Counterinsurgency Field Manual, and President for the Center for New American Security, 

outlined not only the population’s importance during counterinsurgency operations but 

also covered how military units must establish learning organizations to adjust to changing 

population requirements.26 FM 3-24 states that “[c]ounterinsurgents often achieve the 

most meaningful success in garnering public support and legitimacy for the host nation 

(HN) government with activities that do not involve killing insurgents.”27 Australian 

counterinsurgency expert, theorist, consultant, and author Dr. David Kilcullen exerted 

considerable influence on American counterinsurgency operations based on his role 

as the Senior Counterinsurgency Advisor to General David Petraeus in Iraq from 2007 

to 2008. According to Dr. Kilcullen, counterinsurgents should focus on the pillars of 

counterinsurgency that support government legitimacy and provide for the people’s needs.28

A common idea among modern literature focuses on succeeding in a counterinsurgency 

campaign by meeting needs and providing basic services to the people in order to increase 

the host nation’s legitimacy and increase chances of success.

Since meeting the population’s needs proves important in counterinsurgency, literature 

outlining methods of meeting needs provides an important foundation for essential 

services restoration. Abraham Maslow, the American professor of psychology at Brandeis 

University who founded humanistic psychology and created Maslow’s Hierarchy of 

Needs, provides an excellent theory on human behavior, requirements, and perceptions. 

Maslow’s Hierarchy of Needs has tremendous application in military doctrine because 

people generally understand his needs pyramid and the requirement to address needs in a 

population-centric counterinsurgency approach.29 As depicted in Figure 2, the Maslow’s 

Hierarchy of Needs pyramid on the left shows how humans generally attempt to fulfill 

the most important physiological needs because they relate to survival. Upon meeting 

those needs, they can progress up the pyramid to needs more associated with comfort and 

fulfillment.

Figure 2: Maslow’s Hierarchy of Needs and Essential Services Hierarchy30

Because Maslow’s studies covered a relatively homogenous group of healthy Americans, 

practitioners must combine the foundation provided by Maslow’s Hierarchy of Needs with 

ideas from other needs theorists to develop an essential services hierarchy.31 Complementary 
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analysis provided by Dr. Geert Hofstede and Dr. B.F. Skinner provide depth and context 

to Maslow’s theory. Dr. Hofstede, the Dutch social psychologist, anthropologist, and 

pioneer in the research of cross-cultural groups and organizations, shows how diversity, 

geography, government, and economy impact the needs of a group or society. 32 Dr. 

Skinner, the influential American psychologist, behaviorist, author, and inventor, provides 

insight into the effects of cultural factors on group and societal needs.33 Given impacts of 

geographical, cultural, religious context on societal needs, Figure 2 shows on the right 

side an essential services and infrastructure hierarchy paired with Maslow’s Hierarchy of 

Needs. In this hierarchy, Naval Post Graduate School student Justin Gorkowski shows 

the foundational categories and relationships of infrastructure compared to human needs. 

The two hierarchies show that security becomes an influential force in essential services 

that may cause higher efforts on the pyramid to fail if security fails. If addressed in the 

correct context and completed in a relatively secure environment, providing services that 

support daily life and help people achieve an acceptable level of comfort should assist 

counterinsurgency practitioners. By connecting doctrinal definitions of essential services 

with needs-based theory, counterinsurgents can develop a valid categorization of essential 

services using existing essential services models.

As doctrine points out, the basic premise behind restoring essential services comes from 

meeting the needs of a population to prevent active or passive insurgent support. Any 

effective model must assist practitioners in providing population needs while connecting 

services delivery with the legitimate government. As shown previously in Figure 1, Captain 

Pierson, like many counterinsurgency authors, outlines the requirements to correlate 

meeting needs and expectations with increasing government legitimacy.34 For the purpose 

of this monograph, relating needs identified in popular theories, literature, and practice 

with accomplishing military and political objectives helps determine the most effective 

essential services model.

Literature connecting defined needs with counterinsurgency outcomes provides a critical 

foundation for military restoration models. Meeting the needs of people can have a great 

impact on state security and defeating insurgents. Although the military focuses heavily on 

violence reduction and security improvement as measures of effectiveness, the connection 

between essential services improvement and changes in violence levels requires additional 

study outside the scope of this monograph.35 The debate in essential services literature has 

not become whether or not to restore essential services but rather how to restore them. 

Counterinsurgency doctrine focuses the application of essential services restoration in 

support of government legitimacy using a population centric approach. FM 3-24 outlines 

essential services as a separate logical line of operations that concentrate on “providing 

those things needed to sustain life.” 

The RAND research team of Dr. Todd Helmus, Dr. Christopher Paul, and Dr. Russell 

Glenn provide compelling evidence that the population centric approach may help prevent 

deterioration in states bordering on civil violence. They propose that American forces can 

use stability operations and essential services projects to encourage civilian behavior.36 Their 

study states that projects may be allocated or strategically withheld based on adherence to 

US operational norms. FM 3-07 states that “[t]he greatest threats to our national security 

will not come from emerging ambitious states but from nations unable or unwilling to meet 

the basic needs and aspirations of their people.”37 To leverage this technique, practitioners 

must clearly support the government, identify expectations of the population, and provide 

that information to the population concerning changes and improvements.38
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Current Essential Services Models

The operational requirements to restore essential services and the need for models to 

help understand, prioritize, and execute services restoration have produced multiple 

models, with the SWEAT Model being the most highly utilized and covered in doctrine. 

The military uses models to break down problems into visual and understandable parts, 

facilitate communication between groups, and allow for more effective application of 

resources. Models help get things “about right” but cannot precisely predict every case. 

The greatest common factors among military models include keeping concepts simple and 

allowing maximum flexibility to commanders in the field.

During the last nine years of combat operations, military and diplomatic leaders 

have searched for the most effective model for restoration of essential services during 

counterinsurgency operations. In 2004, Marine and Army units began using the SWEAT 

acronym because restoration operations had no coverage in doctrine or mainstream models.39

By the end of 2004, several Marine and Army units in Iraq, including the subject of Case 

A, Multi-National Division – Baghdad (MND-B), employed essential services models 

focused on SWEAT.40 In early 2005, the National Training Center (NTC) developed the first 

essential services restoration model and handbook called the SWEAT Smart Book: Practical 

Applications for Deploying Units Version 3.0. The SWEAT Smart Book helped train units 

on infrastructure reconnaissance and assessments prior to deployments. Also in 2005, a 

team from the US Military Academy’s (USMA) Departments of Systems Engineering and 

Mathematical Sciences developed the models covered in the Infrastructure Assessment 

Methodology. Colonel (Dr.) Joe Manous and his team provided an operations researchbased model that contributed several critical categories and prioritization techniques to 

later versions of the SWEAT Model.41

After a few years of model experimentation in the field, the first essential services model 

entered doctrine in 2006. In the 2006 version of FM 3-24, and later in the 2008 versions 

of FM 3-07 and FM 3-34.170, doctrine built on the structure of models from the National 

Training Center and Army Engineer School to create the “Infrastructure Assessment and 

Survey Model.” Also known by practitioners as the SWEAT Model because it spells out 

the acronym SWEAT-MSO, the Infrastructure Assessment and Survey Model remains 

the only essential services model in doctrine and has considerable use among units. 

Following his work at West Point as an instructor, Major Travis Lindberg introduced 

the Critical Infrastructure Portfolio Selection Model (2008). This model highlighted 

critical distinctions between categories and infrastructure purposes. The intent behind 

Lindberg’s models focused on increasing infrastructure security, conducting infrastructure 

assessments, and completing repairs or re-building to support the achievement of short and 

long term security goals.42 In 2010, Professor Dr. John Farr and a small team from USMA 

traveled to Afghanistan and developed a model for the Department of State in Afghanistan 

called the US Embassy (Kabul) Value Model and Project Analysis Tool.

43 This new model 

establishes an excellent association between projects and government objectives that had 

little coverage in doctrine and previous models. Because the model focused on budgeting 

and action, the tool focused heavily on projects as opposed to holistic assessments of the 

situation. Appendix 4, Current Essential Services Models, provides more details on popular 

models including a brief history of each with example pictures.

Despite having several models available, the existing model that has the greatest impact 

on modern counterinsurgency operations remains the doctrinal SWEAT Model. The ease of 
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use and widespread application of the model made the SWEAT Model the perfect candidate 

for analysis in this monograph. Using the key lessons and strengths of existing models, 

this monograph considers the newly created Factor-Precedence Model, which provides an 

approach that leverages basic needs assessment, establishes basic categories for evaluation 

and action, and works through project prioritization. Sections 3 and 4 describe the SWEAT 

Model and the Factor-Precedence Model, respectively, in more detail. Figure 3, Model 

Comparison Approach, outlines the comparison approach used throughout this monograph.

Figure 3: Model Comparison Approach44

3 – The SWEAT Model

“A direct correlation existed between the level of local infrastructure status, 

unemployment figures, and attacks on US Soldiers... The choice was to continue 

to attrit through direct action or shape the populace to deny sanctuary to the 

insurgents by giving the populace positive options through clear improvement in 

quality of life.”45

- Major General Peter W. Chiarelli

Commander, 1st Cavalry Division

Military Review, 2005

Early in US counterinsurgency efforts in Afghanistan and Iraq, leaders like the 

commander of 1st Cavalry Division, Major General Chiarelli, identified the improvement 

of essential services as a key factor in defeating insurgency because it increases support to 

the legitimate government. As highlighted in Section 2, essential services restoration led to 

creation of various models to help practitioners understand and improve services. Section 3 

provides an overview of the most utilized model, the SWEAT Model, which Army Doctrine 

describes in FM 3-34.170.46 To allow for real-world execution, practitioners supplement 
115

doctrine with non-doctrinal tools and products like the SWEAT Smart Book.

47 Using on 

this precedent, the SWEAT Model evaluated in this monograph supplements the doctrinal 

model with Army Engineer School and National Training Center products.

The Army’s doctrinal SWEAT Model focuses on infrastructure assessments, data 

collection, project prioritization, and execution as a way to restore essential services 

across the lines of effort SWEAT-MSO. As shown in Appendix 3, the SWEAT Model 

emerged after years of the Army conducting essential services restoration during and after 

combat operations. Tracing fundamental roots to Vietnam-era programs called the Hamlet 

Evaluation System (HES) and Civil Operations and Revolutionary Development Support 

(CORDS), the SWEAT Model leverages civilian and military institutions to improve hostnation government services.48

By 2004, units like Major General Chiarelli’s 1st Cavalry Division used his SWEAT 

Program to guide the essential services effort.49 Using field feedback from units like 

1st Cavalry Division and combining it with engineering theory, the National Training 

Center Engineering Team (Sidewinders) developed the first major model for restoration 

of essential services. NTC not only provided this manual across the military community, 

NTC teams trained most engineer, civil affairs, and essential services practitioners on the 

SWEAT Smart Book during their training at Ft. Irwin. The Engineer School described the 

Infrastructure Reconnaissance and Improvement Model in the 2005 document called The 

SWEAT/IR Book.

50 Because it had proprietary photos and information inside the book, 

The SWEAT/IR Book earned an earmark of For Official Use Only (FOUO) that limited 

the books distribution and impact on the Army. By 2006, the Army had published its first 

doctrinal essential services restoration model in FM 3-24, which referred to the model as 

the Infrastructure Assessment and Survey Model. This model outlined the key elements 

of essential services and focused practitioners on the acronym and memory aid, SWEATMSO.

51 According to the SWEAT Smart Book, units began calling the doctrinal model 

the SWEAT Model based on the memory aid and in honor of the hard work required to 

make progress in essential services.52 Because the infrastructure categories that make up 

the acronym SWEAT do not always provide the infrastructure solution that a commander 

needs, the engineer school recommends thirteen “Other” categories for infrastructure 

support. Figure 4 shows the SWEAT Model used to integrate and synchronize tactical 

actions, delineate roles and responsibilities, and focus the civil-military efforts in pursuit 

of related objectives. The following paragraphs provide a brief explanation of the SWEAT 

Model to facilitate a common understanding.
116

Figure 4: The Infrastructure Assessment and Survey Model (aka SWEAT Model)53

Infrastructure Categories and Assessment

The first step of the SWEAT Model requires units to conduct an infrastructure 

reconnaissance and assessment of existing essential services. The basic services or 
117

categories evaluated depend on the situation, mission, and commander’s intent. NTC’s 

SWEAT Smart Book and the United States Army Engineer School’s (USAES’s) The 

SWEAT/IR Book provide supplemental references to FM 3-34.170 that outline objectives 

required to restore essential services. The refinement of infrastructure categories increases 

the availability of data on SWEAT requirements and helps focus counterinsurgents on the 

allocation of resources to specific, unprioritized infrastructure categories like sanitation, 

energy, and agriculture. During the first step, units can ask questions like those in Figure 

5 to refine information and understanding of the essential services situation. Infrastructure 

reconnaissance not only identifies the problems. These questions and the supplemental 

reconnaissance guides outlined in doctrine provide the relevant information necessary for 

planning and reconstruction by those skilled in an appropriate specialty.54

Figure 5: FM 3-34.170 Category Refinement Questions55

Essential Services Planning, Objectives, and End States

The second step of the SWEAT Model focuses on the establishment of essential services 

objectives and end states. After reconnaissance and assessment determine the state of 

infrastructure, the essential services planning process establishes a feasible road map for 

action and the best path for improvement. As shown in Figure 4, this path establishes specific 

tasks, requirements, or objectives for each infrastructure or service category. Both the 

SWEAT Smart Book and The SWEAT/IR Book provide useful tools to link assessments with 

objectives that improve infrastructure.56 Based on the progression of tasks and objectives 

during the unit’s time in the area, practitioners establish required conditions that qualify 

the achievement of the commander’s end state – they describe what the end state will look 

like to the host nation. Units plan prioritized projects and infrastructure improvements to 

increase services, meet emergent needs, and reach the end state for essential services. 

Project Prioritization, Execution, and Transformation

The third step of the SWEAT Model provides the platform for practitioners to prioritize 

their requirements, execute projects, and establish the foundation for long term development. 

According to the SWEAT Smart Book, SWEAT practitioners evaluate each infrastructure 

category and prioritize actions based on the level of effort required, health concerns, cost, 

local perception, local involvement, government impact, and interdependence of the 
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structure.57 Based on priority of need, the SWEAT Model leverages the prioritization of 

resources and projects to improve unit focus in the counterinsurgency environment.58 Units 

execute projects within the SWEAT Model to provide support to governance, economic, 

and essential services lines of operation. During execution, units track measures at the level 

of their partnership with host-nation government employees. Since 2005, the Government 

Accountability Office (GAO) has conducted audits and surveys to track essential services 

improvements at the national level in Iraq and Afghanistan. Both local and national 

assessments help monitor improvements, track spending, adjust development plans, and 

understand on-going transformations in essential services.

In conclusion, the three steps of the SWEAT Model allow practitioners to improve 

essential services within their time and resource constraints. The doctrinal SWEAT Model 

focuses on linear improvement over specific lines of effort to meet objectives. The doctrinal 

model provides no provisions for re-assessment, but commanders and practitioners using 

the Battle Command Process will conduct continuous evaluation and assessment during 

operations. The SWEAT Model, when complemented by the SWEAT Smart Book and The 

SWEAT/IR Book, becomes a powerful tool for analysis and action. It focuses on action 

through project execution and host-nation capacity building. 

4 – The Factor-Precedence Model

“A victory is not [just] the destruction in a given area of the insurgent’s forces and 

his political organization. It is that, plus the permanent isolation of the insurgent 

from the population, isolation not enforced upon the population but maintained by 

and with the population.”59

- David Galula

Counterinsurgency Warfare, 1964

David Galula understood the need for the host nation community to be involved in the 

planning and performance of the work in order for it to be of lasting impact. The author of 

this monograph created the Factor-Precedence Model in August 2010 to provide a more 

holistic approach to restore essential services by working with the local government and 

through local people to accomplish military objectives. This section provides an overview 

of the Factor-Precedence Model, a straight-forward model that complements existing 

counterinsurgency doctrine and incorporates existing tools. Appendix 5 provides a specific, 

more comprehensive description of how to apply the Factor-Precedence Model. 

As shown in Figure 6, the structure of the Factor-Precedence Model consists of sixteen 

general infrastructure categories that constitute essential services and are common to every 

global region. Each essential service category represents a service or infrastructure system 

that provides for the needs of the population. The Army Engineer School and Army doctrine 

have detailed and refined these categories over the last six years. As a result, practitioners 

and intelligence specialists understand how to analyze and assess these service systems.60
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Figure 6: The Factor Precedence Model

Using eight local geographical and cultural factors, the Factor-Precedence Model focuses 

the existing categories into a manageable list that better represents the needs of the local 

population. The output of this step reduces to four to seven refined categories that allow 

practitioners to define essential services lines of effort and provide recommendations for 

category objectives and end states to their leadership. Using this abbreviated list, units 

then apply leadership and resource guidance to relate prioritization to both categories and 

individual projects. Because essential service requirements differ in every geographic 

location, cultural setting, and unit area of operation, an effective restoration model must 

first narrow recognized service categories, then allow practitioners to prioritize those 

selected categories and projects for execution and assessment. Figure 6 shows the FactorPrecedence Model aligned with its complementary tasks of information operations, 

execution, leadership, and assessment.

Recognized Essential Service Systems or Categories

The first step in the Factor-Precedence Model requires units to analyze the sixteen 

recognized essential services categories. These categories, ranging from sewage to shelter, 

provide the required infrastructure to support basic needs for a culturally acceptable quality 

of life. Appendix 5, How to Apply the Essential Services Factor-Precedence Model, provides 

a brief explanation of each of these categories. Using the general infrastructure categories 
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recognized by the engineering and international communities, practitioners gain a better 

understanding of the physical infrastructure and systematic connections. Governments 

typically align their bureaucratic system to support the sixteen categories with ministries 

assigned to major areas. Career fields, like engineering, focus on these specific categories 

for technical licensure and expertise over the life of a career. Because of widespread use, 

most military units and leaders understand the existing categories and can ascertain initial 

requirements for action. 

Existing tools such as geospatial databases, operational variables analysis, and 

civil considerations analysis allow the unit to better understand the services system.61

Infrastructure reconnaissance and assessment of each service category facilitates further 

application of the Factor-Precedence Model and detailed coverage is provided in FM 

3-34.400 General Engineering, Appendix C.62 The analysis of essential services categories 

establishes a solid baseline for unit intelligence preparation and for government engagement 

along bureaucratic lines. Essential services reconnaissance, assessment, and analysis also 

set conditions for the model’s second step.

Geographical and Cultural Factors

The second step of the Factor Precedence Model allows units to apply local geographical 

and cultural factors in order to trim categories to actionable levels. Both geographic 

and cultural factors force practitioners to think more holistically about the requirements 

and impact of essential services on the community. The eight geo-cultural factors refine 

general categories into something specific to a company, battalion, brigade, division, or 

higher unit’s area.63 Geographical factors filter climate, population density, extent of battle 

damage, and availability of local resources in order to analyze local weather, terrain, and 

progress conditions. Cultural factors filter quality of life requirements, historical services, 

humanitarian minimum standards, and the economic base to focus on local needs, desires, 

and expectations. 

Units gain geographical and cultural information during pre-deployment research, 

environmental analysis, and during initial reconnaissance. Units then refine these geocultural factors using tools such as area and infrastructure assessments, the Engineer 

Research and Design Center’s (ERDC’s) Geo-Cultural Analysis Tools (GCAT), and 

Human Terrain System assessments based on local engagements.64 The second step 

of the Factor-Precedence Model outputs four to seven essential services categories on 

which counterinsurgents can concentrate their efforts for each area of operation. Planners 

subsequently define the lines of effort (LoE), decisive points, objectives, and end states for 

each category. Appendix 5 provides a list of examples concerning application of the geocultural factors.

Leadership and Mission Precedence Elements65

The third step in the Factor-Precedence Model allows units to apply elements of their 

leader’s guidance and essential services technical priorities. Using the refined categorization 

from the second step, counterinsurgents must utilize elements of precedence to rank order 

essential service operations and projects. During most military operations, limited time or 

resources require the commander to prioritize focus and effort before, during, and after 

operations. Leadership priorities provide focus based on the unit commander’s intent 

and guidance, feedback from concerned government officials, and feedback from local 

consumers. Essential services priorities tailor the systematic interdependencies, time and 
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resource limitations, and utility of action to balance priorities in terms of wants and needs. 

Priorities differ within every area based on basic service status, resources available, unit 

goals, and capabilities of the government entities. The third step of the Factor-Precedence 

Model outputs a final prioritization that governs specific actions within categories and 

individual projects to ensure effective and efficient execution of localized essential 

services operations. Adjustments to funding, resources, or commander’s intent can shift 

the precedence of refined categories. Due to the long-term nature of essential service 

operations, units should keep adjustments to the minimum necessary. 

The effectiveness and flexibility of the Factor-Precedence Model in terms of location, 

interchangeability, and compatibility demonstrate that the model could work in future 

counterinsurgency operations. Factor-Precedence Model Figure in Section 4 portrays the 

interaction of the Factor-Precedence Model with many existing tools used by essential 

services practitioners. Appendix 5 provides a list of examples concerning application of 

precedence elements and provides model links to complementary actions like information 

operations, execution, leadership, and assessment.

In conclusion, the three steps of the Factor-Precedence Model allow practitioners to 

integrate essential services restoration with the Battle Command Process. The FactorPrecedence Model focuses on holistic improvement within the geographical, cultural, 

and leadership environment to improve essential services and defeat the insurgency. The 

integration of provisions for reassessment and information management should help 

practitioners to continuously develop improvement plans and manage operations. 
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Factor-Precedence Model Figure

Existing Tools and Applicability to the Factor-Precedence Model66

5 – Iraq Case Studies

“The answer lies not in pouring more troops into the jungle, but in the hearts and 

minds of the Malayan People.”67

- General Sir Gerald Templer, 

Director of Operations and High Commissioner for Malaya, 1952

“Military force cannot change opinion. It can only create a framework in which 

economic reform and government can take effect.”68

- Major Bill Tee, 1/6 Gurkha Regiment

British District War Executive Committee, 1953

Case Evaluation Framework and Model Effectiveness

The quotes by General Sir Gerald Templer and Major Bill Tee, both British leaders during 

the Malaya Emergency, illustrate the importance of the defense units working outside 

narrow security roles by expanding military efforts in social, economic, and government 

areas. This monograph uses two primary cases from Iraq to compare the effectiveness of 
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the SWEAT and Factor-Precedence Models in situations similar to that faced by General 

Templer and Major Tee. Case A, Operation IRAQI FREEDOM in 2005, offers an example 

in which 1st Cavalry Division applied the SWEAT Model to essential services operations. 

Case B, Operation IRAQI FREEDOM in 2009, offers an example where 1st Cavalry 

Division applied an essential services model very similar to the Factor-Precedence Model 

during their counterinsurgency operations. 

The case evaluation framework begins with five evaluation criteria that help establish a 

set of important factors for all effective models.69 The five evaluation criteria of simplicity, 

flexibility, reproducibility, sustainability, and links to political and military objectives 

provide a comparison framework. The evaluation criteria derive from the works of three 

theorists, Paul Davidson Reynolds, John Lewis Gaddis, and Antoine Bousquet. These 

theorists have established the primary requirements for evaluation of theories and models. 

The evaluation criteria draw a comparison between the two models and facilitate inferences 

from case study analysis by addressing those factors that increase chances of success and 

those that can cause failure. With slight modifications, these criteria help evaluate model 

effectiveness within the case studies as outlined in Table 1.70

Although restoration of essential services presents a very complex situation, an effective 

model provides a simple approximation of the real world that American diplomats and 

Soldiers can understand and apply during counterinsurgency operations. Flexible models 

allow for deliberate and hasty application across a variety of initial conditions and 

environmental situations. Reproducible models provide a systematic methodology that 

allows for application to past and present cases and for execution in nearly any future 

situation. Sustainable models rely on past experiences as a foundation on which to build. 

These models last over time, adapt to changing environments, and integrate well into 

planning and execution tools. Not only do sustainable models facilitate repeated use of the 

model itself, but they also encourage outcomes that practitioners can pass on to others. In 

terms of essential services model sustainability, the critical question becomes “can the local 

people, leadership, or government sustain this project?” Effectively linked models support 

political and military objectives by applying a holistic cost-benefit approach to informed 

military thinking in a counterinsurgency environment. Table 1 provides a complete 

definition, theoretical foundation, and measure for each of the five evaluation criteria.

Table 1: Model Effectiveness and Evaluation Criteria Definitions

Eval Criteria

Short Title

Evaluation Criteria

Definition Sources

Measure

& (Benchmark)

Simplicity

Simple enough approximation of the 

real world that American diplomats 

and Soldiers can understand 

and apply the model during 

counterinsurgency operations

- Reynolds71 - Number of 

categories in use (# 

categories)

- Useful to wide 

spectrum military 

force 

(Infantry, Civil Affairs, 

Engineers, etc)

Flexibility

Flexible models allows for deliberate 

and hasty model application through 

a variety of initial conditions and 

environmental situations

- Reynolds

- Gaddis72

- Speed capability 

(fast & slow)

- Diversity in 

areas supported 

(agricultural, 

industrial)
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Reproducibility

Reproducible models provide a 

systematic methodology that allows 

for application to past and present 

cases and for execution in nearly 

any future situations

- Gaddis73

- Bousquet

- Applicable to past 

cases (Vietnam)

- Applicable to 

current cases (Iraq, 

Afghanistan)

- Useful for future 

results (Hybrid 

threat)

* Sustainability

Sustainable models build on past 

experience, last over time, transform 

with changing environments, and 

tie well into planning and execution 

tools (e.g. can locals sustain the 

output?)

- 

Bousquet74

- Useful in multiple 

environments (urban, 

rural)

- Existing tools 

applicable to model 

(# applicable)

- Immediate vs. longterm perspective 

(both present)

** Links to Political

and Military 

Objectives

Effectively linked models support 

political and military objectives 

by applying a holistic approach 

to informed military thinking in a 

counterinsurgency environment 

(e.g. cost vs. benefit linked militarily 

and politically)

- 

Bousquet75

- Military 

doctrine

- Nested with higher 

HQ guidance and 

objectives

- Cost vs. Benefit of 

action (Measures)

- Integration 

with variety of 

ministerial or civil 

service branches (# 

ministries)

By selecting two similar case studies that occur in the same area, with the same combat 

unit, and under the same central government and supporting ministries, this case analysis 

generally controls the comparison framework between past and present restoration 

operations. In both cases, leadership took into consideration the experience of their force, 

the technical capacity available for missions, and available opportunities when selecting 

the appropriate restoration model. Similarities between cases support the appraisal of each 

model’s effectiveness using the five evaluation criteria. Table 2 provides an overview of the 

primary similarities between Case A and Case B that facilitate direct comparison.

By selecting two case studies with minor differences including the time period, surge 

effects, Iraqi government capability, and violence levels, this case analysis incorporates 

adequate controls that differentiate the specific capabilities for each model. As shown 

in Table 2, the eight minor differences between the two cases link the two similar 

situations and facilitate comparison of actions and outcomes. The implementation of a 

new counterinsurgency approach by General Petraeus and his theater command, MultiNational Forces – Iraq (MNF-I), combined with the increased experience of the combat 

and technical experts, has significant impacts when compared to the 2005 case. As many 

practitioners on the ground have pointed out, by the time of the 2009 surge, force leaders, 

staff, commanders, and troops in the field typically brought with them significant previous 

Iraq experience to the mission. Most leaders and commanders have served at least one 

previous tour in Iraq, and their familiarity with Iraqi governing structures, basic laws, and 

customs is markedly greater than the limited knowledge the first coalition teams brought 

to the Baghdad, Iraq case. However, the differences still facilitate comparison between the 

two cases. 76
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Table 2: Cases A and B Comparison Controls

Case Similarities Case Differences

- Area & Time of Year (Geography and cultural 

breakdown)

- Established Central Government

- Central government services (Ministries, Civil 

Service)

- Religious apportionment (Shia and Sunni split)

- Division in command (MND-B)

- Detailed unclassified command reports available (1 

CAV)

- Detailed 3rd party audit information available 

(SIGIR and GAO)

- Essential services conditions (Damage pre-surge, 

limited maintenance)

- Resourcing priority and support (Pre-OEF Surge)

- Focused on non-lethal operations

- Command focus on essential services

- Engineer technical forces (MND-B and USACE)

- Iraqi government revenues (Oil Prices ~ $75/barrel)

- Time period (2005 and 2009) 

- Surge effects (Forces redeployed in 

early 2009) * 

- Violence levels (2009 half of 2005 

levels) * 

- New COIN focus from MNF-I (General 

Petraeus, Ambassador Crocker, and Dr. 

Kilcullen)

- People with more experience (Combat, 

Technical)

- Different leadership focus (Provincial 

Reconstruction Teams [PRTs] available, 

Department of State priority and 

resource allocation)

- Iraqi government more capable 

(Capacity growth) *

- Doctrine and essential services models 

(Updates)

* Differences minimal and facilitate case 

comparison

Case A: SWEAT Model in Baghdad, Iraq (2005)

Case Context and Unit Approach

In Case A, the context for 1st Cavalry Division’s operations in Baghdad evolved from 

the initial combat focused invasion of Iraq in 2003 into stability operations focused on 

government and infrastructure reconstruction by 2005. Operation IRAQI FREEDOM 

(OIF) began on March 20, 2003 with an invasion by a multinational coalition led by the US 

military. Following a speedy completion of major combat operations that climaxed in the 

overthrow of Saddam Hussein’s regime, the Coalition and allied Iraqi forces established 

a Coalition Provisional Authority (CPA) to rule Iraq, assist in reconstruction, and set 

conditions for a “transfer of sovereignty” back to a legitimate Iraqi government. By June 

2003, Combined Joint Task Force 7 (CJTF-7) assumed control of the military component 

of operations and focused on the political (governance), economic, essential services, and 

security lines of operation.77 Amid a growing trend in violence and an emerging insurgency 

in 2004, the CPA transitioned authority to the Interim Government of Iraq.78

To support the Interim Government by late 2004, CJTF-7 reorganized into a joint, 

combined force known as MNF-I and began managing combat operations throughout 

Iraq.79 After a review of the military strategy at the end of 2004, the MNF-I Commander 

concluded that the Iraqi civilians all over the country wanted and needed basic essential 

services restored or even created. To jump start the rebuilding process, MNF-I distributed 

funds called Commander’s Emergency Relief Program (CERP) Funds to US Coalition 

Forces for projects and local support.80 Focus on reconstruction and funding for local 

projects helped set the context for this case study. The US Coalition commanders directed 

their maneuver operations to disrupt the enemy and used non-maneuver capabilities like 

the restoration of essential services to assist the local population.
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To narrow more closely into the subject of Case A, 1st Cavalry Division took command 

and control in April 2004 of Task Force Baghdad, also called Multi-National Division 

– Baghdad (MND-B).81 Through their relief in place in February 2005, the MND-B’s 

operational campaign plan balanced five integrated conceptual lines of operations (LOOs) 

shown in Figure 7: 1) conducting combat operations, 2) training and employing security 

forces, 3) promoting essential services, 4) establishing a capable, legitimate government, 

and 5) creating opportunities for economic independence through a free market system.82

Each LOO had a close relationship with information operations (IO) that communicated 

positive messages to the Iraqi populace, international community, and American base. With 

improvement in each line, the Task Force planned to meet the end state, or ultimate goal, of 

building a legitimate Baghdad government while shifting the city away from instability.83

A major part of the instability in Baghdad came from the difference between conditions 

in 2004 compared with conditions during Saddam Hussein’s reign over Iraq. During 

Saddam’s regime from 1979 to 2003, Hussein focused much of his government funding and 

support to the capital region. Baghdad received fifty percent of the available power despite 

having only thirty percent of the populace. Saddam built drinking water, trash collection, 

and irrigations systems in and around Baghdad that far surpassed the quality of those in 

the rest of the country. Following the coalition invasion, many of these formerly well off 

Iraqi neighborhoods now had no potable drinking water, continuous electrical blackouts, 

no evidence of trash collection, high unemployment, and a genuine mistrust of the newly 

formed Iraqi government. The $30 billion in aid and development spent in the two and onehalf years after the end of major combat operations focused on country-wide electrical and 

water projects that did little to change the situation on the ground, especially in Baghdad.85
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Figure 7: Task Force (TF) Baghdad (1st Cavalry Division) Lines of Operation (LOO)84

Essential Services Operations and the SWEAT Model

To support the six million people in Baghdad, 1st Cavalry Division focused immediately 

on the line of operation for essential services as the “first among equals.” When NTC 

and the Army Engineer School published their SWEAT books, the division refined their 

approach and became the first unit to officially use a SWEAT Model to restore essential 

services LOO.86 Within the essential services line of operation, the division staff organized 

the Division Engineer Section and 9th Engineer Battalion assets to direct planning, design, 

and execution towards projects that improved the quality of life for the Iraqi people. The 

new SWEAT Model helped the division refine their focus, develop a restoration execution 

plan, determine how to monitor improvement metrics, and provide guidance to subordinate 

units in order to focus on security and essential services.87 The 1st Cavalry Division’s 

Brigade Combat Teams now had their areas of operation underpinned with a clear direction 

and focus, which was on rebuilding, repairing, and eventually monitoring the essential 

service infrastructure in Iraq.

At a more micro level, 1st Cavalry Division’s subordinate units focused on the “first 

among equals” line of operation as an opportunity to use CERP through local contractors 

and labor to repair or create basic services while creating jobs. One subordinate unit, the 

Brigade Troops Battalion (BTB), 2nd Brigade, 3rd Infantry Division partnered with the 20th
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Engineer Brigade on the division’s main effort in eastern Baghdad’s Sadr City.88 Based on 

the specific SWEAT Model provided by 1st Cavalry Division, the requirements to plan and 

manage essential services required engineer expertise. To address this need, the BTB and 

20th Engineer Brigade created a SWEAT Shop in which they partnered with local advisory 

and engineering committees to determine needs, conduct infrastructure reconnaissance, 

scope requirements, and design projects within the SWEAT categories. As outlined by 

Major Alexander Fullerton, the BTB SWEAT Shop worked with city engineers to establish 

basic local services and to provide employment within neighborhoods ripe for insurgent 

recruitment, both of which directly undermined the insurgent base of support.89

Results and Evaluation

During the 1st Cavalry Division’s time as MND-B, the division, assigned units, and 

the supporting 20th Engineer Brigade invested over $200 million into specific SWEAT 

improvements and essential services restoration. To supplement 1st Cavalry Division’s 

efforts, the United States Army Corps of Engineers Gulf Region Central District provided 

engineering design, planning, and contract oversight on over 500 SWEAT projects worth 

$500 million inside Baghdad with most spending allocated toward seven water plants, four 

waste water plants, 807 school renovations, and 15 major electrical projects.90 Units focused 

projects on highly populated urban areas and relegated rural areas to second priority. As 

shown in the Government Accountability Office’s (GAO) spending in narrow categories 

correlated almost exactly to the SWEAT Model with prioritization coming more from cost 

of projects than from focus on specific categories. 

Despite providing temporary jobs and improving service conditions in Baghdad, Iraqi 

opinion of services and support remained low. Task Force Baghdad SWEAT Model 

proponents believed that projects would not only provide jobs and empower the Iraqi 

government, but essential services efforts would stimulate the economy, improve quality 

of life, and prevent people from joining the insurgency. As more Iraqis purchased cars and 

electrical equipment that Saddam had banned during his regime, Iraqi demand for public 

services increased exponentially and hindered the planned quality of life impacts from 

Task Force Baghdad projects. Because Iraqis could not complete training and preparation 

to operate and maintain the power plants, water and sewage treatment facilities, and health 

care centers the US had rebuilt or restored, projects brought on an initial change until 

facilities fell into disrepair.92

Figure 8: Reconstruction Funds Distributed by Sector for 2004 and 200591
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As shown in Figure 9, surveys in the summer of 2006 by US Joint Warfare Analysis Center 

researchers Frederick Barton and Bathsheba Barton show decreasing satisfaction with new 

Iraqi Government and US-led Coalition Force (CF) performance. By interviewing large 

portions of the local population in each Iraqi province, Barton and Crocker determined 

that techniques for restoration of essential services and the methods communicating 

positive changes to the population had little positive impact on the population’s opinion.93

Comments revealed that both the CF and the Iraqi Government failed to address priority 

needs and concerns of these residents. 

Figure 9: Measuring Iraq’s Reconstruction Effort and Population Satisfaction94

Perhaps the greatest disappointment came in 2005 and early 2006 when the security 

situation deteriorated despite huge investments in infrastructure and essential services 

around Baghdad. Using the SWEAT Model and government feedback, Task Force Baghdad 

implemented a process that invested heavily into the perceived needs and wants of the Iraqi 

people. SWEAT Model implementation injected money into the economy and repaired 

much of the dilapidated infrastructure, but it missed many critical requirements requested 

by the people. In addition, corruption by contractors, ineptitude within the Iraqi Ministries, 

and focus on easy projects like school construction reduced the positive impacts of CERP.95

By early 2006, the United States Army Corps of Engineers reported drops to 6.4 hours of 

electricity in Baghdad per day versus 11 hours outside Baghdad.96 After reaching a low 

point of 1,500 monthly attacks in early 2005, attacks increased through 2005 to a high of 

nearly 3,000 by September 2005.97
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Figure 10: GAO 2005/2006 Report on Enemy Initiated Violence98

Simplicity

The SWEAT Model’s eight categories provide a simple framework, which 

facilitates restoration actions with limited technical experience Units have used the 

SWEAT Model for six years now because the model seems simple. As a caution 

shown in Figure 8, 1st Cavalry Division’s use of the SWEAT Model focused 

support into narrow categories. To overcome technical limitations, the command 

executed easier projects that required less technical expertise. These factors 

prevented holistic solutions and discriminated against rural areas around the city of 

Baghdad. The SWEAT Model’s focus on how to think about categories of projects 

has prevented effort and support to different areas like Northern Baghdad’s rural 

districts or Qadas that need categories other than SWEAT. Although the SWEAT 

Model allows many non-engineers to apply funds in restoration categories, the 

SWEAT Model provides little to the no process non-technical branches to plan, 

resource, and manage improvements.

Flexibility

The SWEAT Model allows for hasty and deliberate application. Although the SWEAT 

Model is simple, easy to teach, and quick to execute, using a countrywide model for 

categories limits geo-cultural analysis and prevents nesting with local and national 

priorities. Based on its urban focus, the model has limited effectiveness through many 
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environmental conditions including rural or agricultural areas. In 1st Cavalry Division’s 

case, this drawback balanced the fact that one third of the country’s population lived in 

Baghdad’s urban areas.

Reproducibility

The SWEAT Model uses the infrastructure categories generally applicable to past military 

operations. The SWEAT Model used by 1st Cavalry Division could find valuable lessons 

from historic operations like Vietnam. Marine and Army units in early Operation IRAQI 

FREEDOM used the SWEAT Model with positive results. Because the generic “other” 

category prevents holistic focus on other services and application of cultural analysis limits 

full understanding of needs, the SWEAT Model might be difficult to apply effectively to 

future areas of operation. In the case of 1st Cavalry Division, the SWEAT Model failed 

to support rural requirements therefore allowing insurgency to build and affect the urban 

centers. 

Sustainability

Unlike most other essential services models, the SWEAT Model has wide use and 

documentation in doctrine. To its detriment, effective use of the doctrinal model requires 

integration of outside technical manuals and reconnaissance tools. The Department of 

State and other US government entities understand and use variants of the SWEAT Model 

in their own analysis. The model integrates well into reconnaissance tools and project 

management capabilities within SWEAT categories; however, the static SWEAT-MSO 

categories prevent units from capturing the feedback from Intelligence Preparation of 

the Battlefield (IPB) products like the operational variables political, military, economic, 

social, infrastructure, information, physical environment, and time (PMESII-PT). Using 

intelligence to better pinpoint populace needs may help locals sustain the output because 

they received something they needed. The 1st Cavalry Division used the model to focus on 

and gain many short term wins, but a similar, national-level focus on SWEAT categories 

prevented a long term tailoring of essential services to Iraq regions. The model considers 

only specific categories for project prioritization, which means that anything outside the 

categories are excluded from the list. For long term use, units must adapt the SWEAT 

Model to local tailoring, modification, prioritization, and assessment. 

Links to Political and Military Objectives

As shown by Case A, the SWEAT Model and its application by 1st Cavalry Division 

generally supported the essential services line of effort established by the Bush 

Administration, CJTF-7, MNF-I, and MNC-I. The 1st Cavalry Division applied a 

comprehensive cost versus benefit analysis of area requirements. Essential services became 

a priority for MND-B, allowing them to apply considerable manpower, technical expertise, 

and resources towards accomplishing their objectives. Despite MND-B placing a priority 

on essential service operations, prescriptive SWEAT guidance forced subordinates into a 

narrow focus. The lack of analysis in categories outside SWEAT resulted in many key Iraqi 

Government Ministries and Civil Service Directorates having limited interaction with US 

forces and receiving no assistance in their area. 
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Case B: Factor-Precedence Model in Baghdad, Iraq (2009)

Case Context and Unit Approach

In Case B, 1st Cavalry Division’s return to Baghdad in 2009 came within the context 

of President Bush’s “surge” of combat forces into Iraq. In President Bush’s January 10, 

2007 address to the nation, he announced that implementation of a “New Way Forward” 

would deploy additional military units to Iraq, primarily to Baghdad. President Bush’s 

surge forces would, in a paraphrase of the “clear, hold, build” language from 2006, “help 

Iraqis clear and secure neighborhoods, help them protect the local population, and help 

ensure that the Iraqi forces left behind are capable of providing the security that Baghdad 

needs.”99 When General David H. Petraeus and his MNF-I planning team developed 

the military campaign plan to leverage the surge’s additional troops, break the cycle of 

sectarian violence, and implement the “clear, hold, build” strategy, they made protecting the 

population the military’s top priority in Iraq. Leveraging Dr. Kilcullen’s counterinsurgency 

designs and synchronizing military efforts with US Ambassador to Iraq Ryan Crocker’s 

diplomatic missions, MNF-I set the conditions for military and diplomatic success using 

Operation FARDH AL-QANOON, Iraqi Arabic for Operation TOGETHER FORWARD.100

On September 16, 2008, General Petraeus relinquished command of MNF-I to Army 

General Raymond Odierno, a former Commanding General of Multi-National Corps-Iraq 

(MNC-I).101 On November 17, 2008, Ambassador Crocker and General Odierno signed 

the Iraq Security Agreement with their Iraqi counterparts that changed counterinsurgency 

techniques and partnership requirements across Iraq.102

The new Iraq Security Agreement required Multi-National Division - Baghdad (MND-B) 

to take a partnered approach in all areas, especially essential services, and forced a review 

of the Baghdad Campaign Plan. When the 1st US Cavalry Division assumed command 

and control of MND-B on February 10, 2009, the division received requirements to protect 

the people of Baghdad, to implement the Security Agreement’s demands for partnered 

operations, and to withdraw all US combat forces from Iraqi “cities, villages, and localities” 

by June 30, 2009.103 By March 2009, most Coalition “surge” forces had redeployed leaving 

MND-B with six brigades of 35,000 personnel, thirteen larger Forward Operating Bases 

(FOB), fifty-five Joint Security Stations (JSS), and seven small Combat Outposts (COP) 

throughout Baghdad.104

Aware of Baghdad’s importance as a microcosm of Iraq for the overall security and 

stability of the country, Major General Daniel P. Bolger, commander of the 1st Cavalry 

Division and MND-B, emphasized partnership with the Iraqi Security Forces as the 

cornerstone for his campaign concept with three lines of effort (LOEs) including Iraqi 

Security Force (ISF) Partnership, Targeting and Security, and Civil Capacity.105 Figure 11 

shows MND-B’s Campaign Design established by Major General Bolger to secure the 

population and increase Iraqi government legitimacy. Within the MND-B Campaign Design, 

Major General Bolger clearly expressed his mission statement and intent to establish an 

environment of sustainable security in Baghdad from which the sustaining LOE, Civil 

Capacity, could gain the strength and momentum necessary to increase government 
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legitimacy.106 Key Civil Capacity goals included assisting the Government of Iraq (GoI)’s 

rule of law initiatives, supporting the election process, mentoring GoI departments with 

budget execution, and helping to improve essential services. Essential services would serve 

MND-B as an important sustaining operation within the Civil Capacity LOE.

Figure 11: MND-B (1st Cavalry Division) Campaign Design and Lines of Effort107

Essential Services Operations and the Factor-Precedence Model

Implementation of the Iraq Security Agreement combined with 1st Cavalry Division’s 

arrival to Baghdad caused many changes within MND-B’s essential services operations 

in 2009. Requirements to turn bases within the city over to Iraqi Security Forces forced 

MND-B to shift essential services focus away from traditional SWEAT Model categories 

into a broader set of categories and support based on geographical and cultural factors in 

both the city and in the surrounding agricultural areas.108 New restrictions on spending 

and the requirements to work with Provincial Reconstruction Team – Baghdad (PRT-B) 

leading reconstruction working groups forced MND-B to reassess leadership and 

essential services priorities.109 MND-B adjusted procedures to evaluate the longer-term 

time horizons, compare interdependencies of unit options, and recalculate the utility of 

critical actions based on PRT-B feedback. To comply with new integration rules within the 

Security Agreement, MND-B began working all actions through the appropriate levels of 
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Iraqi government to integrate local priorities and cultural requirements into the essential 

services model. As a result of Security Agreement’s deadlines to move out of the cities, 

restrictions on spending, and requirements to work through the local governments, the 1st 

Cavalry Division adopted an essential services restoration approach that exhibited many 

components of the Factor-Precedence Model. 

Requirements to move out of city bases helped MND-B shift essential services focus 

away from the traditional SWEAT Model categories into a broader set of categories and 

support based on geographical and cultural factors. The 1st Cavalry Division Essential 

Services (ESS) Section assessed that despite seven years of “reconstruction,” many of the 

infrastructure systems failed to meet minimum international standards or meet the needs 

of the Iraqi people.110 As shown in Case A, units using the SWEAT Model had focused 

on repairing urban infrastructure and conducted repairs in the narrow SWEAT categories. 

After moving to bases and camps outside the city, MND-B began to focus on both the 

city and the surrounding agricultural areas in nearly every area of essential services. As 

highlighted in the MND-B’s 2010 CERP spending shown in Figure 12, MND-B focused 

outside traditional SWEAT categories into wide ranging categories including education, 

telecommunications, humanitarian assistance, transportation, sewer, water, electricity, 

trash, agriculture, and health. MND-B’s expanded infrastructure category focus exemplified 

nearly all of the recognized essential service categories espoused by the Factor Precedence 

Model.

Figure 12: Distribution of CERP Funs by MND-B in Fiscal Year 2010111

In addition to deviating from the old SWEAT Model’s category focus, the 1st Cavalry 

ESS Section and subordinate essential services practitioners concentrated on improving the 

essential services within Baghdad’s geographical and cultural factors. As US combat forces 
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transitioned out of Baghdad, they shifted focus to more geographically varying terrain 

much different from the city. Rural governments, called Qadas, had limited population 

densities and urban infrastructure like sewers, but they had significant irrigation and 

drainage infrastructure to facilitate an agricultural economy and apply local resources.112

These agricultural areas like Taji and Tarmiyah Qadas supported the city with food and 

offered areas where insurgents could hide if supported by the population. By adopting a 

model similar to the Factor-Precedence Model, 1st Cavalry Division supported agricultural 

projects in the outlying areas of Baghdad Province while focusing on urban-based projects 

like electricity and sewage inside the city.113 To address cultural factors within the quickly 

changing operating environment, MND-B established cultural measures for improvement 

within each category focused on meeting minimum humanitarian standards, achieving the 

quality of life acceptable to the people in and around Baghdad, and restoring services 

required to make any modern society function. Similar to the recommendations provided 

by the Factor-Precedence Model, subordinate brigades modified SWEAT categories to 

meet the constituent’s geographical and cultural factors.

While moving out of the city shifted MND-B focus into broader categories, geographical 

factors, and cultural factors, new restrictions on spending and the requirement to work with 

the PRT-B leading reconstruction working groups forced MND-B to reassess leadership 

and essential services priorities.114 On 1 May 2009, a new CERP Standard Operating 

Procedure (SOP) for projects in the Baghdad Amanat went into effect.115 The new SOP 

required a Memorandum of Agreement (MOA) approved by the end using Iraqi government 

entity like the Amanat, Governorate, or Ministry before any project could proceed. The 

new process increased the coordination process between American and Iraqi essential 

services practitioners and ensured that the GoI would take over all projects, operations, 

and maintenance when completed.116 To comply with the new CERP SOP, MND-B and 

subordinate essential service practitioners integrated local government and local leadership 

priority elements of the Factor-Precedence Model into project planning and prioritization.

To support PRT-B’s leadership role in Iraqi stability operations and reconstruction, 

MND-B adjusted procedures to integrate projects with long-term time horizons. Before 

2009, the Department of State and the United States Agency for International Development 

(USAID) had generally focused on services and governance capacity development. In 

essential services, this capacity development included long-duration, large-scale, strategiclevel projects. The long timelines made these larger projects impractical for MND-B or 

subordinate brigade involvement because of timelines and expertise. To close the gap 

between large projects favored by diplomatic practitioners with the small projects favored 

by military practitioners, PRT-B and MND-B involved experts from both organizations 

to work beside military units and ensure short, mid, and long-term projects made it into 

planning and funding priorities.117 MND-B and PRT-B’s use of time horizon as an important 

component of prioritization highlighted another component of the Factor-Precedence 

Model.

To balance military operations with holistic Iraqi requirements, MND-B began to compare 

interdependencies of unit options and recalculate the utility of critical actions based on 

PRT-B feedback. To allow the subordinate brigades the freedom to decide where and how 

they wanted to perform restoration operations, the Division abolished the centralized 

priority list of the ten most important projects that the 4th Infantry Division had used to 

divide resources. The new list of combined political and military services priorities allowed 
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MND-B’s subordinate brigades and partnered embedded Provincial Reconstruction Teams 

(ePRTs) to begin developing priorities using systems analysis and utility assessments.118

This new technique allowed personnel on the ground to investigate the interdependencies 

between essential services and recommend actions or projects to improve the situation. 

With the units that lived in the affected areas and knew best when, where, and how to 

perform restoration providing feedback on the utility of actions, MND-B better allocated 

limited resources and effort in Baghdad’s rural and urban areas.

Because the Security Agreement required Coalition Forces to work all actions through 

Iraqi government officials, MND-B and PRT-B utilized more local and city government 

feedback to prioritize actions and expenditures. To gain the appropriate approvals on new 

projects, MND-B and PRT-B had to establish connections with every level of executive and 

legislative leadership. A critical connection came when leadership broke from the SWEAT 

Model to align support with government ministries in every category of infrastructure. 

MND-B’s G-9 section, responsible for Civil Military Operations (CMO) that included 

oversight of the CERP, reconstruction activities, infrastructure repair, economic assistance, 

support to civil administration, and humanitarian assistance, reapportioned money and 

priorities based on the feedback coming from units and from the Iraqi government.119

Division and brigade practitioners engaged and mentored government officials, studied 

the existing service categories, and promoted Iraqi government activities by providing 

resources, when needed, through CERP projects. The new cooperation led to better 

connections between projects and efforts. As an example, during meetings with Ministry 

of Water Resources (MoWR) representatives, MND-B G-9 identified two major irrigation 

projects in Mahmodiyah Qada that would help alleviate water shortage for both irrigation 

and drinking needs. One of these projects, the repair of the Latifeeyah boost water pump 

and construction of associated irrigation canals, affected between 125,000 to 150,000 

farmers in the area south east of Baghdad. This area had experienced little essential services 

support in the past and had suffered as an insurgent safe-haven for years.120 Much like the 

tenets of the Factor-Precedence Model, MND-B’s revived connection with Iraqi leaders 

helped integrate local priorities and culture back into the essential services model.

Results and Evaluation

As a result of the adoption of the new counterinsurgency approach, security in Baghdad 

and its environs improved dramatically.121 1st Cavalry Division’s time as MND-B laid the 

ground work for the enlargement of the division’s area of responsibility including Anbar 

Province and further reduction of forces in Baghdad. In January 2010, the Division handed 

over authority of Multi-National Division Baghdad, now renamed US Division Central, to 

the 1st Armored Division. 122 Another area of focus was shaping the Brigade Combat Teams 

(BCT) battle space through legitimate local leadership and CERP funding.123 That gradual 

growth was punctuated by sharp upward spikes at key Iraqi political junctures, including 

the January 2005 elections and the October 2005 constitutional referendum, and, less 

sharply, during Ramadan each year. After July 2007, the overall level of attacks declined 

sharply, punctuated by a spike during Iraqi and coalition operations in Basra and Sadr City, 

in March 2008. By late 2008, the level of attacks had fallen to well under 200 per week 

– levels last witnessed at the beginning of 2004 – and those gains held through February 

2009.124 The following sections provide a brief overview of each evaluation criteria based 

on the case study.
137

Figure 13: SIGIR US Reconstruction Effort Metrics as of October 30, 2010125

Simplicity

The Factor-Precedence Model’s initial sixteen categories require detailed and time 

consuming analysis. Although slightly more complex than the SWEAT Model, the FactorPrecedence Model increases in simplicity after the initial evaluation of local needs and 

services. Once established, the Factor-Precedence Model’s focus on four to seven categories 

after refinement step keeps prioritization and restoration work relatively simple. Based 

on 1st Cavalry Division and their subordinate brigade’s success in using the model, the 

process seems useful to all branches tasked with civil-military support. 

Flexibility

The Factor-Precedence Model allows for hasty and deliberate application during 

operations. The Factor-Precedence Model provides focus on geographical and cultural 

factors allowing support to wide areas. 1st Cavalry Division’s surges in urban areas like 

Abu Ghraib Qada and rural areas like Tarmiyah Qada provide evidence of the model’s 

flexibility. The Factor-Precedence Model offers a holistic perspective that tailors focus 

within each area of operation and continuously assesses needs compared with local 

feedback. The Factor-Precedence Model user could focus on agricultural support in one 

area while building humanitarian assistance and housing capacity in another area. Because 

the Factor-Precedence Model allows diverse approaches at Division and Brigade levels, 

it is critical that headquarters synchronize their infrastructure master plans for long-term 

effectiveness and overall sustainability. 

Reproducibility

Like the SWEAT Model, the Factor-Precedence model can apply to both historical and 

contemporary essential services efforts. The Factor-Precedence Model seems exceptionally 

useful in Iraq and could fare well in Afghanistan due to holistic nature of model. Based 

on limited case analysis, the holistic nature and flexibility of the Factor-Precedence Model 
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seems uniquely capable of supporting future counterinsurgencies against hybrid threats. 

Circumstantial evidence also indicates that the Factor-Precedence Model could find use 

restoring essential services in conflict outside of insurgencies.

Sustainability

The Factor-Precedence Model provides focus on geographical and cultural factors 

allowing support to both rural and urban areas. The model ties in with nearly any existing 

intelligence, engineering, or management tool. Despite having no major conceptual issues, 

the model needs refinement for long term use and integration with emerging command and 

control techniques, namely mission command.

Links to Political and Military Objectives

The Factor-Precedence Model facilitated focus on the critical problems while taking 

into consideration higher headquarters’ guidance. When 1st Cavalry Division needed 

to move outside of urban areas, their Factor-Precedence-like approach proved useful in 

treating the local issues and focusing on changing needs. The model also facilitated ties 

into ministries at Baghdad level and allowed subordinate units to integrate with available 

local directorates. As mentioned earlier, the differing focus between government levels and 

geographic make-up requires synchronization between headquarters elements to prevent 

disconnects in support.

6 – Comparison and Afghanistan Example 

“SWEAT is a great acronym. It has caught on and is in widespread use. Those 

infrastructure categories that make up the acronym SWEAT, however, do not 

always provide the infrastructure solution that the commander needs... As with 

any mission a prioritization of tasks must be made and using SWEAT alone cannot 

be relied upon in every scenario.”126

- The SWEAT/IR Book

Based on the data provided by the primary case studies, this section compares the 

important variables of model effectiveness and variable applicability between the SWEAT 

Model and the Factor-Precedence Model. The primary case studies from the 1st Cavalry 

Division in Baghdad, Iraq provide an interesting comparison between two different essential 

services models at work in similar situations. The comparison concludes, similar to the 

quote above, that the SWEAT Model provides a great acronym and has widespread use, but 

that the model’s limitations prevent solutions that the commander and local populace need. 

To make the comparisons between the primary cases more relevant to current operations, 

this section introduces an illustrative example of the Factor-Precedence Model applied 

to 10th Mountain Division as Regional Command (RC) South in Kandahar, Afghanistan 

(2010). Adding this illustrative example facilitates conclusions on model applicability, 

effectiveness, and inferences for future actions not just in Iraq but in other places around 

the world.

Comparison of Case Studies

When comparing the two models using the Iraq case studies, the Factor-Precedence 

Model emerges as more effective. The major advantages of the Factor-Precedence Model 

come because the model offers a more holistic perspective, allows for constant assessment 

and re-categorization, facilitates reprioritization, and focuses on the full range of military 
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operations. Because the Factor-Precedence avoids the one size fits all categorization of the 

SWEAT Model, the Factor-Precedence Model can focus more on local needs and capacity 

thus increasing the sustainability by local leaders and government after improvements. 

Since case evidence shows that all branches can execute the model, the model can also 

help synchronize military and political elements on projects, support, and engagements 

that improve essential services. Most importantly, the Factor-Precedence Model allows for 

prioritization of effort, shifting priorities within unit areas of operations, or even project 

prioritization to meet needs of local areas.

The major disadvantage of the Factor-Precedence Model remains the fact that it is a 

new model not covered in doctrine. Based on the Iraq case studies, the SWEAT model has 

usefulness and has documentation in doctrine. Because units have used the SWEAT Model 

for over six years, the simple, easy to remember, and narrowly focused SWEAT Model 

has positive feedback from practitioners. Because the Factor-Precedence Model has more 

components than the existing SWEAT Model, units may have a natural aversion against 

using it. The drawbacks from the SWEAT Model come from the limitations on analysis, 

especially when concerning culture, climate, and regional factors. Also, the SWEAT Model 

focuses on urban infrastructure categories like sewage and electricity. The effectiveness 

and applicability of both models in non-developed, rural areas like Afghanistan require 

additional analysis. Table 3 provides a brief summary of the comparison between the 

SWEAT Model and the Factor Precedence Model.

Table 3: Summary of Case A to Case B Comparison between Essential Services Models

Case A - 

SWEAT Model

Case B - FactorPrecedence Model

Eval Criteria

Short Title Rating Rating Remarks

Simplicity + -

SWEAT Model simple and used 

throughout military since 2004; units 

could learn the Factor-Precedence 

Model quickly and apply

Flexibility - +

Factor-Precedence Model much 

more flexible to environment, 

geography, and culture

Reproducibility + + Both models allow for systematic 

application

Sustainability - +

Factor-Precedence Model holistic 

approach builds on past models, 

offers assessment for changes, and 

ties into all existing tools; FactorPrecedence Model appears more 

sustainable by local leaders and 

government after improvements
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Links to Political

and Military 

Objectives

+ +

Both models support lines of 

effort, objectives, and end state 

formulation; both models balance 

the costs and benefits of resources 

and combat power; FactorPrecedence Models feedback 

look may synchronize analysis, 

reprioritization faster

The Iraq case study’s outcomes indicate that the Factor-Precedence Model could also 

prove effective in Afghanistan and future counterinsurgency operations. To make the best 

conclusions possible about the viability of the Factor-Precedence Model outside Iraq, an 

illustrative example from Kandahar, Afghanistan provides a hypothetical application of 

the Factor-Precedence Model and compares it against the effectiveness evaluation criteria.

Illustrative Example: Factor-Precedence Model in Kandahar, Afghanistan 

(2010)

Example Evaluation Framework and Model Effectiveness

The evaluation of operations in Iraq shows a considerable difference between the 

effectiveness of the Factor-Precedence and SWEAT Models. By comparing use of the 

Factor-Precedence Model in Baghdad, Iraq with a hypothetical application of the FactorPrecedence Model in Kandahar, Afghanistan, an illustrative example facilitates universal 

conclusions on model applicability. Table 4 provides an outline of the controls, similarities, 

and differences between the two locations that facilitate comparison. Similarities between 

Iraq and Afghanistan such as general time period, use of full spectrum operations, experience 

of American Soldiers, and models available facilitate comparison between the two very 

different political and geographic areas. The similarities provide a point of reference and 

specific connections between the case study and the illustrative example. On the other 

hand, the two situations have enough differences to test the Factor-Precedence Model 

against varying environments, different military situations, and dissimilar initial conditions. 

Situational differences such as the initial infrastructure levels, level of decentralization and 

tribal impact, and geography help to strengthen the inferences about the Factor-Precedence 

Model’s applicability outside Iraq.
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Table 4: Controls Baghdad, Iraq (2009) to Kandahar, Afghanistan (2010)

Situational Similarities Situational Differences

- Time Period (between 2009 and 2010)

- Level of Command (MND-B equivalent [1st 

Cavalry] to RC-South [10th Mountain])

- Balancing of resource priority (post-Iraq 

surge equal to pre-Afghanistan surge) 

- Command balance of full spectrum 

operations (FSO)

- Essential services initial conditions (Damage 

pre-surge, limited maintenance)

- Requirement to restore essential services

- External influence and competition

- International reconstruction funds

- Same doctrine and models available

- Religious impacts (Influence of Islam)

- Government Type and History (centralized 

vs. regional control)

- Decentralization (national perspective vs. 

tribal focus)

- Leadership (US vs. Multi-National [ISAF])

- Previous infrastructure levels (initial 

infrastructure high vs. low)

- Education Levels to sustain projects 

- Area (geography and landscape)

- Culture (urban vs. rural culture)

** Major differences between case and 

illustrative example can be accounted for 

during comparison and assist in evaluation

Context and Approach

This illustrative example focuses on the hypothetical applicability of the FactorPrecedence Model in Kandahar, Afghanistan. As 2009 drew to a close, American President 

Barack Obama increased the priority, troop, and resource support to Afghanistan. For the 

six previous years, the priority of effort and resources focused on Iraq. The drawdown of 

troops in Iraq facilitated the President’s shift of focus and attention. To complement an 

American “surge” of effort, the President and Secretary of Defense petitioned and received 

additional support from International Security Assistance Force (ISAF) - Afghanistan 

partners. To complement growing ISAF and American support, President Karzai outlined 

his 2010 National Development Strategy to provide basic services and sustainable 

development. ISAF, the US Department of State, and subordinate American headquarters 

updated their counterinsurgency approach to reflect civilian and military integration in 

support of Afghanistan’s government.127 As outlined by Captain Pierson, ISAFs new 

approach led to refined lines of effort, shown below in Figure 14, and provided a guide for 

political and military actions. Essential services remained a major component of military 

operations against the insurgent and set the conditions for hypothetical application of the 

Factor-Precedence Model.
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Figure14: ISAF Counterinsurgency Approach for 2009 and 2010128

Essential Services Operations and the Factor-Precedence Model

Applying the Factor-Precedence Model to Regional Command - South operations in 

Kandahar, Afghanistan requires a compatible operational approach. Much like the ISAF 

lines of effort, the Operating Framework breaks down into six sectors including Rule 

of Law, Governance, Health and Education, Agriculture and Econ, Infrastructure, and 

Security.129 To support infrastructure an essential services work, most units have used 

the SWEAT Model in different forms throughout Afghanistan since 2004 with varying 

levels of success. Because Afghanistan has limited cities and because the rural population 

has different needs than the specific SWEAT categories, the 16 categories offered by 

the Factor-Precedence Model provide an excellent starting point for reconnaissance and 

assessment by region. Based on the limited success of the SWEAT Model, Regional 

Command - South began implementation of a new Stabilization Approach in 2010 so 

integration of the Factor-Precedence model could prove timely.130 Regional Command - 

South’s Stabilization Approach provides a framework for alignment and coordination with 

the Government of the Islamic Republic of Afghanistan (GIRoA). Direct coordination with 

the local governments simplifies the application of geographical and cultural refinement 

factors. Climate, population density, and economic base concerns can integrate into GIRoA 

regional development plans to establish the essential services situation for each province 

and major city.
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To ensure resources and priorities within the Regional Command – South area of 

operation meet needs, the precedence elements of the Factor-Precedence Model can help 

prioritize effort then monitor for adjustments to the commands actions. Figure 15 provides 

an example of Agriculture and Economic Growth Line of Operation in terms of needs, 

end states, actions, and priority concepts. Development in this line moves through the 

established phases of Shape, Clear, Hold A, Hold B, Build, and Transfer.131 The command 

could establish an end state that takes into account current conditions outlined by the 

Factor-Precedence Model then prioritize projects, engagements, or local emphasis. After 

establishing an integrated plan, RC South could use the Factor-Precedence Model and 

existing tools to execute, lead, and assess progress. Based on this example, the current 

Regional Command South Operating Framework supports application of an essential 

services model like the Factor-Precedence Model.

Figure 15: Regional Command (RC) South Stabilization Approach132

Results and Evaluation

Since national Afghanistan statistics on government and essential services show limited 

growth despite huge investments, the need for a new essential services model becomes 

clear. Through 2009, the SIGAR reports show that $17.7 Billion from the Departments 

of Defense and State focused on narrow SWEAT-MSO categories between 2003 and 

2009.133 In Nangarhar alone, only 1 of 26 projects existed on the provincial development 

plan so projects had little support or interest from the local government.134 Despite an 

annual increase in reconstruction dollars, a 300% increase in troop strength, and continued 

focus on critical lines of SWEAT-MSO, basic services do not meet the minimum standards 

or provide support to the legitimate government.135 Afghan crops peaked in 2005/2006 

falling since, electricity jumped 400% but supports only 15% of the population, and less 

than 12% of the population has safe drinking water and sanitation.136 Use of the FactorPrecedence Model in Regional Command - South’s area of operations could improve 
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model performance in each of the evaluation areas and help improve the focus local efforts 

and spending.

Simplicity

The Factor-Precedence Model’s implementation through the evaluation of local needs and 

services could improve the simplicity of essential services interactions with the Regional 

Command – South’s Stabilization Approach. Once established, the Factor-Precedence 

Model could become simpler for units to execute and could tie into the existing Stabilization 

Approach. In Afghanistan like in Iraq, the Factor-Precedence Model could become useful 

to all military branches and governmental agencies tasked with civil-military support.

Flexibility

The Factor-Precedence Model could allow for hasty and deliberate application during 

operations, a critical factor for Afghanistan. Because Regional Command - South does not 

use the SWEAT Model, their Stabilization Approach could benefit from integration with a 

holistic essential services model like the Factor-Precedence Model. The Factor-Precedence 

Model provides focus on geographical and cultural factors allowing support to wide areas. 

Factor-Precedence Model users could focus on agricultural support in one rural area of 

Afghanistan while providing humanitarian assistance and building housing capacity in 

another urban area.

Reproducibility

Like in Iraq, the Factor-Precedence model seems reproducible in Afghanistan. Regional 

Command – South’s integration with local government agencies increases the options 

for systematic execution and reduces inconsistencies in application. Since implementing 

their Stabilization Approach, RC South has leveled spending on infrastructure outside 

the SWEAT-MSO categories.137 Diversification of spending and project prioritization has 

increased the ability to focus on critical needs and expectations of the public. 

Sustainability

The Factor-Precedence Model could provide focus on geographical and cultural factors 

allowing support to both rural and urban areas in Afghanistan. The model could readily 

integrate into the existing Regional Command – South’s Stabilization Approach and with 

Region South’s diplomatic Unified Plan. Because Regional Command – South already 

integrates with local government and leaders, those leaders can motivation for Afghani 

government employees and contract workers to learn the systems and maintain them 

properly. The chances of sustainable improvements over time increases greatly with local 

interest and buy in.

Links to Political and Military Objectives

The Factor-Precedence Model could facilitate focus on the critical problems identified 

by both the political and military leadership. In this Afghanistan example, the FactorPrecedence Model could help integrate essential services objectives related to the ISAF 

Operational Approach, President Karzai’s National Development Strategy, and Regional 

Command – South’s Stabilization Approach. The cost-benefit analysis conducted using 

the Factor-Precedence Model could also prove useful in political end state assessment and 

adjustments to military actions.
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Inferences for Future Factor-Precedence Model Application

Can these two case studies and the illustrative example facilitate inferences for the future? 

Yes, the examples show that the Factor-Precedence Model not only proves more effective 

than existing models, but the Factor-Precedence Model can also apply in locations the 

SWEAT Model could not support. Military units must use a valid and effective model 

that applies historical and regional factors early in the process for a locally refined 

categorization, allows for a fluid prioritization of the refined categories, and facilitates 

a continuous assessment of the model to link needs and changes to military objectives. 

Despite the differences in culture, government, geography, and requirements between 

Iraq and Afghanistan, the holistic nature of the Factor-Precedence Model could facilitate 

effective essential services improvements in both locations. The fact that the FactorPrecedence Model can apply in a variety of locations bodes well for future application.

In addition to demonstrating effectiveness in multiple locations, the case studies show 

that the Factor-Precedence Model could work with military tools during current and future 

operations. A variety of existing military tools tie directly into the Factor-Precedence 

model during execution. Factor-Precedence Model Figure (Section 4) shows the nesting 

of existing tools with the primary components of the Factor-Precedence Model. Refined 

categorization directly links to establishing lines of effort within the essential services or 

economic lines of operation. Each refined categorization directly supports establishment 

of decisive points, key tasks, or key events required to meet end states and unit objectives. 

Using the categories within the Factor-Precedence Model, engineers, civil affairs, and 

diplomatic specialists can conduct long-term, mid-term, and short-term master planning 

of budgets, projects, and efforts to restore essential services more effectively. The FactorPrecedence model provides priority by essential service category and can thus assist in the 

development of projects lists along with the subsequent prioritization and budgeting of said 

projects. Continuous assessment within the model allows for adjustment of categories, use 

of military provided assessment tools, and reprioritization of effort. 

7 – Conclusions and Recommendations

“Success will be less a matter of imposing one’s will and more a function of shaping 

behavior of friends, adversaries, and most importantly, the people in between.”138

- Robert Gates, US Secretary of Defense

October 10, 2007

“If you know the enemy and know yourself you need not fear the results of a hundred 

battles.”139

- Sun Tzu

Results matter. The model that provides more flexibility, allows for repetition in a variety 

of situations, and links better to military objectives will prove more effective during 

counterinsurgency operations. Not only does the Factor-Precedence Model perform better 

than the SWEAT and other models in Iraq and Afghanistan’s counterinsurgency fights, but 

the Factor-Precedence model seems more effective in future fights as well. Because future 

requirements will undoubtedly develop, military planners should adopt a holistic approach 

like the Factor-Precedence Model and incorporate existing intelligence and analysis tools 

into the model. Further research can improve the application of culture, climate, and 

geography factors. Commander requirements can guide the prioritization elements within 

the Factor-Precedence model, and practitioners can incorporate existing project and area 

assessment capabilities into model execution.
146

Conclusions

The SWEAT Model has provided a valuable tool for essential services restoration 

since 2004, but the military requires change to improve counterinsurgency outcomes. 

Since the SWEAT Model has widespread use, many commanders, practitioners, and 

even doctrine confuse the SWEAT Model categories with the exact meaning of essential 

services. The existing infrastructure categories provided by the SWEAT Model form an 

excellent foundation for essential services analysis, but a new model and updated doctrine 

can leverage the best parts of the SWEAT Model to increase effectiveness of restoration 

operations. Because the SWEAT Model’s categories align with existing engineer career 

fields and because they represent the civil service offices formed in most countries, future 

essential services models should encourage category use and analysis.140 Essential services 

and basic needs differ for each geographical region and cultural area. Understanding and 

focusing on area-specific needs has become a major weakness of the SWEAT Model and 

should become an important part of any essential services model placed in future doctrine.

Based on the five evaluation criteria for model effectiveness, the Factor-Precedence Model 

proves more effective than existing models. The Factor-Precedence Model has grounding 

in doctrine, takes into consideration the local environment, and fits well into existing 

operations processes. The Factor-Precedence Model utilizes many of the strong points of 

existing models to make an effective model that works in both Iraq and Afghanistan. Given 

the case studies and examples covered in this monograph, there seems a good chance that 

the Factor-Precedence Model could prove effective in future counterinsurgencies against 

“hybrid threats” and, with minor model adjustments, could work in situations other than 

counterinsurgency.141

Recommendations for Future Action 

•	 As outlined earlier, many practitioners think SWEAT means essential services. 

Leaders should avoid confusing the SWEAT acronym with the real definition of essential 

services by discontinuing the use of the SWEAT family of acronyms.

•	 The essential services definition seems very vague. Doctrine writers should refine 

the definition of essential services in FM 3-07 and FM 3-24 to encourage a holistic approach 

to meeting people’s needs while implementing the essential services tasks and logical line 

of operation.

•	 The current SWEAT Model, along with the other primary existing essential 

services and infrastructure models, focuses exclusively on infrastructure repair and project 

execution. These models exclude Civil Affairs and interagency partners who prefer to 

address capacity and development in restoration models. To increase the military interbranch and government interagency applicability of essential services restoration, leaders 

should: 

•	 Implement a more holistic approach like the Factor-Precedence Model to facilitate 

synergy between Engineer and Civil Affairs approaches. 

•	 Incorporate the Factor-Precedence Model into doctrine and training for Army and 

Marine Reserve and National Guard force structures to leverage their unique capabilities 

and civilian experience. In addition, the new model could encourage an interagency 

approach focused not only on projects but also actions, engagements, and development. 
147

Department of State guidance could integrate the new model.

•	 Many tools exist that could work with the Factor-Precedence Model. Military 

planners should adopt a holistic approach like the Factor-Precedence Model and incorporate 

existing intelligence and analysis tools into the model. Over time, practitioners could 

improve the application of existing tools with Factor-Precedence Model. 

•	 Since the scope of this monograph focused on counterinsurgency operations, 

practitioners should conduct further research to improve the application of culture, climate, 

and geography factors for all essential services model. Additional research could identify 

ways to modify the Factor-Precedence Model to meet interagency guidance along with 

emerging doctrinal requirements. 

•	 After additional research, refinement, and study by US Army Engineer School 

and Engineer Research and Design Center, units can assess the benefits of the FactorPrecedence Model and integrate the model into their operational approach.
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Appendix 1: Definitions and Terms

The following appendix provides definitions for key words and phrases contained in this 

monograph. To provide a common point of reference for readers, most terms begin with the 

military’s doctrinal definition and refine the use in this monograph.

Civil Considerations – areas, structures, capabilities, organizations, people, events 

(ASCOPE) within a commander’s battlespace that are not normally considered militarily 

significant. (Field Manual [FM] 5‐0, pg C-7)

Counterinsurgency (COIN) – those military, paramilitary, political, economic, 

psychological, and civic actions taken by a government to defeat insurgency. (FM 3-24, 

Glossary 4) Comprehensive civilian and military efforts taken to defeat an insurgency and 

to address any core grievances. Also called COIN. (Joint Publication [JP] 1-02, pg 108) 

Counterinsurgency or counterinsurgents can refer to the group itself.

Essential Services – those things needed to sustain life, such as food, water, clothing, 

shelter, and medical treatment. Stabilizing a population requires meeting these needs. 

People pursue essential needs until they are met, at any cost and from any source. People 

support the source that meets their needs. If it is an insurgent source, the population is 

likely to support the insurgency. If the host nation government provides reliable essential 

services, the population is more likely to support it. Commanders therefore identify who 

provides essential services to each group within the population. (FM 3-24, pg 3-11) Also 

called ESS by practitioners.

Guerilla – person who engages in irregular warfare (guerilla warfare) especially as 

a member of an independent unit carrying out harassment and sabotage. (Trinquier, pg 

6). Although used interchangeably to describe insurgents or terrorists during the Malaya 

Emergency and other conflicts, a guerilla is specifically one who engages specifically in 

guerilla warfare to achieve his or her goals. Guerillas could fight during insurgencies or 

major combat operations.

Host nation – a nation which receives the forces and/or supplies of allied nations and/or

NATO organizations to be located on, to operate in, or to transit through its territory.

Also called HN. (JP 1-02, pg 212)

Infrastructure – includes all “real property” (i.e., buildings, roads, facilities, etc) 

constructed to support a society. Infrastructure spans the spectrum of those structures and 

services that enhance a life style to those that make survival possible. (NTC SWEAT Smart 

Book, pg 3)

Insurgency – the organized use of subversion and violence by a group or movement that 

seeks to overthrow or force change of a governing authority. Insurgency can also refer to 

the group itself. (JP 1-02, pg 229) An organized movement aimed at the overthrow of a 

constituted government through the use of subversion and armed conflict. (FM 3-24, pg 

Glossary 5)
149

Lines of Effort – a useful tool for framing the concept of operations when stability or 

civil support operations dominate. Lines of effort link multiple tasks with goal-oriented 

objectives that focus efforts toward establishing end state conditions. (FM 5-0, pg 2-17) 

Also called LOEs.

Mission Variables – mission, enemy, terrain and weather, troops available and support 

available, time available, and civil considerations (METT-TC) provide categories of 

relevant information to synthesize operational variables and tactical-level information with 

local knowledge about conditions relevant to their mission. (FM 5-0, pgs 1-21 and 1-71)

Nation-Building – involves the use of armed force as part of a broader effort to promote 

political and economic reforms with the objective of transforming a society emerging from 

conflict into one at peace with itself and its neighbors. (Dobbins, pg xvii)

Operational Variables – political, military, economic, social, infrastructure, information, 

physical environment, and time (PMESII-PT) factors describe the commander’s 

understanding of the battlefield. (FM 5‐0, pg 1-6) 

Practitioner – for the purpose of this monograph, the term practitioner refers to someone, 

either military or diplomat, who engages in the study, improvement, or management 

of essential services. The term unit and practitioner are used interchangeably in this 

monograph. In the military, most essential services practitioners come from engineer or 

civil affairs fields.

Reconstruction – the process of rebuilding degraded, damaged, or destroyed political, 

socioeconomic, and physical infrastructure of a country or territory to create the foundation 

for long-term development. (FM 3-07, pg 1-12) 

Smart Book (also Smartbook) – a useful resource document or reference guide that 

informs the reader and thus increases his or her ability to accomplish a task in the military. 

Readers should not confuse the military smart book with electronic smart books, smart 

phones, or electronic mobile devices.

Stability Operations – Stability operations is defined as an overarching term 

encompassing various military missions, tasks, and activities conducted outside the United 

States in coordination with other instruments of national power to maintain or reestablish 

a safe and secure environment, provide essential governmental services, emergency 

infrastructure reconstruction, and humanitarian relief.” (DoDD 3000.05, pg 4) Stability 

operations encompass the various military missions, tasks, and activities conducted outside 

the United States in coordination with other instruments of national power to reestablish 

or maintain secure environment, provide essential governmental services, emergency 

infrastructure reconstruction, and humanitarian relief. (FM 3-07, pg Glossary-9)

Stabilization – the process by which underlying tensions that might lead to resurgence in 

violence and a breakdown in law and order are managed and reduced, while efforts are made 

to support preconditions for successful long-term development. Together, reconstruction 

and stabilization comprise the broad range of activities defined by the Department of 

Defense as stability operations. (FM 3-07, pg 1-12)

Terrorism – terrorism is politically-motivated violence, directed primarily against 

civilians or non-combatants, undertaken with the intention to coerce societies through fear. 

(Kilcullen, Countering Global Insurgency, pg Appendix D-1)
150

Appendix 2: Acronyms in Essential Services

AR Army Regulation

ASCOPE areas, structures, capabilities, organizations, people, events

BCT Brigade Combat Team

CCIR commander’s critical information requirement

CERP commander’s emergency relief program

CERL Construction Engineering Research Laboratory

CMO civil-military operations

COCOM combatant command 

COIN counterinsurgency

CORDS Civil Operations and Revolutionary Development Support 

DA Department of the Army

DoD Department of Defense

DoDD Department of Defense Directive

DoDI Department of Defense Instruction

ERDC Engineer Research and Development Center

ESS essential services

FM Field Manual

FMI Field Manual Interim

GAO Government Accounting Office

GCAT Geo-Cultural Assessment Tool

GIRoA Government of the Islamic Republic of Afghanistan

GOI (or GoI) Government of Iraq

HES Hamlet Evaluation System 

HIC high intensity conflict

IO information operations

IPB intelligence preparation of the battlefield

IR infrastructure reconnaissance

ISAF International Security Assistance Force

ISR intelligence, surveillance, and reconnaissance

JOPP Joint Operation Planning Process

JP Joint Publication

LIC low intensity conflict

LOE (or LoE) lines of effort

LOO (or LoO) lines of operation
151

MDMP military decision making process METT-TC mission, enemy, 

terrain and weather, troops available and support available, time 

available, and civil considerations

MCWP Marine Corps Warfighter Pamphlet

MNC-I Multi-National Corps - Iraq

MND-B Multi-National Division - Baghdad

MND-N Multi-National Division - North

MNF-I Multi-National Force - Iraq

MOE measure of effectiveness

MOOTW military operations other than war

MOP measure of performance

OSD Office of the Secretary of Defense

PIR priority intelligence requirement

PMESII-PT political, military, economic, social, infrastructure, information, 

physical environment, and time

PRT Provincial Reconstruction Team

RC-E or RC(E) Regional Command – East

RC-S or RC(S) Regional Command – South

SBCT Stryker Brigade Combat Team

S/CRS Office of the Coordinator for Reconstruction and Stabilization

SIGAR Special Inspector General for Afghanistan Reconstruction

SIGIR Special Inspector General for Iraq Reconstruction

SF Special Forces

SSTR stability, security, transition, and reconstruction

SWEAT sewer/sewage/sanitation, water, electricity, academics, trash

SWEAT-MSO sewer, water, electricity, academics, trash, medical, safety, other 

considerations

SWET-H sewer, water, electricity, trash, health

TCAPF Tactical Conflict Assessment and Planning Framework

TO Theater of Operations

US United States

USACE United States Army Corps of Engineers

USAES United States Army Engineer School

USAID United States Agency for International Development
152

Appendix 3: Modern Counterinsurgency Operations and Essential 

Services Key Events

In the modern era, insurgency actions by China and counterinsurgency actions by the 

United States, France, and Great Britain highlight the development of counterinsurgency 

thought, techniques, and doctrine. Each counterinsurgency conflict offers lessons to military 

planners, doctrine writers, and essential services practitioners. By 2006, the American 

Army had taken critical lessons learned and formulated them into a coherent doctrine in 

the form of FM 3-24 Counterinsurgency and FM 3-07 Stability Operations. Both of these 

manuals focus considerable effort on the restoration of essential services to support the host 

nation government and gain the support of the population. The first section of this appendix 

provides an overview of foreign counterinsurgency lessons that helped counterinsurgency 

literature and doctrine evolve over time. Table 5 provides a historical overview of lessons 

learned from foreign counterinsurgency involvement.

Table 5: Modern (Post 1942) Foreign Counterinsurgency Lessons

Years Conflict Historical Relevance

1927-

1950

Chinese Civil 

War

Since the early 20th Century, winning support of the populace has become 

a fundamental principle in counterinsurgency literature. In 1937, while 

developing his theories of Chinese Communism, Mao Tse-Tung stated 

that “[b]ecause guerrilla warfare basically derives from the masses and is 

supported by them, it can neither exist nor flourish if it separates itself from 

their sympathies and cooperation.”142 He later successfully applied these 

principles during the Chinese Civil War that led to the overthrow of the 

Republic of China and instatement of Communism.

1948 

to

1960

Malayan

Emergency

Great Britain waged a low cost, long term counterinsurgency effort in 

Malaya. Great Britain’s comprehensive essential services program tied 

into comprehensive security efforts, helped lead to a stable Malaysian 

government, and cost less than $800 million.143In 1952, while fighting 

communist insurgents during the Malayan Emergency , General Sir Gerald 

Templer linked winning the “hearts and minds” of the Malayan people with 

improving popular perception and counterinsurgency success.

1954 

to 

1962

Algerian War

France conducted an unsuccessful counterinsurgency effort in Algeria. 

French forces failed to gain popular support because they focused too heavily 

on harsh security tactics and had limited “Special Administration Sections” 

aimed at improving conditions. 144 In 1966, after taking part in the Algerian 

War as a counterinsurgent, David Galula stated “the support of the population 

is as important for insurgents as it is for counterinsurgents.”145 Literature 

published since the beginning of America’s conflicts in Afghanistan and Iraq 

carries the same theme. In 1966, after taking part in the Algerian War as a 

counterinsurgent, David Galula stated “the support of the population is as 

important for insurgents as it is for counterinsurgents.”146 Literature published 

since the beginning of America’s conflicts in Afghanistan and Iraq carries the 

same theme.

1957

Foreign 

COIN 

Review

FM 41-10, Civil Affairs Military Government Operations, proposed that 

insurgencies flourished in conditions of “disorder and socioeconomic hardship” 

therefore military units must help restore basic infrastructure, services, and 

humanitarian standards. FM 41-10 estimated that restoring basic services 

would “win public support for the government and the Army.”1

47

The second section of this appendix relates America’s involvement in conducting 

restoration or provision of essential services to the prevention or counteraction of an 
153

insurgency. Table 6 provides a historical overview of American involvement in essential 

services restoration during and after World War II. These experiences highlight not only the 

historical precedence of essential services restoration, but they also show the evolution to 

modern essential services models. 

Table 6: Modern (Post 1942) American Essential Services Efforts during Counterinsurgency 

Operations

Years Conflict Historical Relevance

1944-

1946

World War 

II Germany 

and Japan

Starting heavily in 1945, the United States Army built a history of doctrine 

and missions that focused on meeting needs and fixing basic services. 

Lieutenant General Lucius D. Clay in Germany and General of the Army 

Douglas MacArthur in Japan received the requirements as soldierdiplomats to restore and provide basic governmental services to prevent 

growth of a Communist insurgency.148

1959 Cuba and 

Columbia

Starting in 1959, President Eisenhower responded to political and social 

unrest in Cuba and Columbia by appropriating $500 Million and military 

support to restoring health, education, and agrarian conditions in both 

countries.149 These interventions focused on supporting the host-nation 

government’s legitimacy and maintaining a stable partner.

1965 Dominican 

Republic

In 1965, 1,600 Soldiers from the 82nd Airborne Division deployed in a multinational effort to the Dominican Republic to restore municipal services, 

repair roads, build schools, and assist with medical care in the face of an 

insurgency there.150 The focus of preventing the spread of Communist 

insurgencies and Communist rule in South America increased in the 

Dominican Republic based on the island nation’s proximity to the United 

States.

1955 to 

1975 Vietnam War

The United States fought in the Vietnam War against Communist 

conventional troops and guerrilla forces. The US Army implemented two 

systems, the Hamlet Evaluation System (HES) and the Civil Operations 

and Revolutionary Development Support (CORDS), which had positive 

infrastructure impacts and would establish the foundation for future 

counterinsurgency and essential services models.151 Success in meeting 

basic needs of the populace led, in turn, to improved intelligence that 

facilitated an assault on the Viet Cong political infrastructure. By early 

1970, statistics indicated that 93 percent of South Vietnamese lived in 

“relatively secure” villages, an increase of almost 20 percent from the 

middle of 1968. By 1972, pacification had largely uprooted the insurgency 

from among the South Vietnamese population and forced the communists 

to rely more heavily on infiltrating conventional forces from North Vietnam 

and employing them in irregular and conventional operations

.152

2001 to 

present

Operation 

ENDURING 

FREEDOM 

(OEF)

Counterinsurgency operations in Afghanistan continued to show the 

relevance of essential services restoration and the need for effective ways 

to improve it. In Afghanistan, the limited initial infrastructure, tribal focus, 

and the cultural self-sufficiency of Afghani populace limited the impact of 

services restoration and support to the central government.153 Based on 

the reoccurring theme and guidance to conduct stability operations, the 

restoration of essential services will remain a future mission. 

2003 to 

2010

Operation 

IRAQI 

FREEDOM 

(OIF)

Essential services restoration became a major line of effort for forces in 

Iraq. Many units like 1st Cavalry Division in 2005 put non-kinetics efforts 

like essential services above kinetic requirements to defeat insurgents. 

A variety of models emerged during operations including the most 

frequently used, the SWEAT Model. 154 This monograph outlines the 

Factor-Precedence Model which closely resembles 1st Cavalry Division’s 

model used in 2009 near the end of the surge.
154

Years Conflict Historical Relevance

2010 to 

present

Operation 

NEW DAWN 

(OND)

As operations shift in Iraq to advise and assist tasks, the need for essential 

services restoration and support continues to develop. Effective military 

models will need to act in support of host nation and Department of State 

efforts. These efforts will have limited resources for action.

Figure 16: See Factor-Precedence Model Figure in Section 4.

Figure 17 provides additional examples from Australian counterinsurgency specialist 

David Kilcullen on useful counterinsurgency programs and efforts by the British and 

United States that shaped thinking today.

Figure 17: Kilcullen’s Summary of Historical Counterinsurgencies155
155

Appendix 4: Current Essential Services Models 

This appendix outlines the major essential services restoration models available at the 

time of this monograph. Models under development have draft information highlighted. 

Figures 18 to 22 outline the major models used by practitioners to restore essential services 

in a counterinsurgency environment. Each figure contains details on the model, a picture of 

the model’s cover page, and examples of critical elements of the model.

SWEAT Smart Book

National Training Center (NTC) Practical Applications for Deploying Units V3.0

Year: 2005

Figure 18: NTC SWEAT Smart Book Cover156

Model Summary:

Developed by the NTC Engineer Sidewinder Team between 2004 and 2005 to train 

deploying units on SWEAT applications in a deployed environment

One of the first publications covering a version of the SWEAT Model

Stand alone Smart Book to facilitate infrastructure reconnaissance and data collection
156

Prioritization of issues and projects became critical to model’s success

Heavily used in development of doctrinal SWEAT Model

Refined many of the categories still in use today

Figure 19: NTC SWEAT Smart Book Overview157

Developed an infrastructure rating scheme for measures of performance, priority, and 

effectiveness
157

Figure 20: NTC SWEAT Smart Book Overview158

Infrastructure Assessment Methodology

United States Military Academy (USMA) Infrastructure Assessment Methodology

Year: 2005

Figure 21: USMA Infrastructure Assessment Methodology Cover Page159

Model Summary: 
158

Developed by USMA Department of Systems Engineering in concert with the USAES 

and ERDC’s Construction Engineering Research Laboratory (CERL)

Team focused on “Theater of Operations (TO) infrastructure security, assessment, and 

repair (re-build)”(MORRS, 12)

Original analysis based on study of domestic critical infrastructure

Flexible, adaptable, scalable tool for use on contingency operations worldwide. 

Placed emphasis of the process on infrastructure projects and priority.

Recommended categories used in The SWEAT/IR and NTC SWEAT Smart Book

Became critical in the development of the doctrinal SWEAT Model

Figure 22 shows the major contribution of the team’s research: a revised infrastructure 

category list

Figure 22: USMA Infrastructure Assessment Methodology Cover Page160
159

The SWEAT/IR Book

United States Army Engineer School (USAES) Infrastructure Reconnaissance Version 

2.1

Note: Version 2.1 of The SWEAT/IR Book is unclassified but marked For Official Use 

Only (FOUO). To maintain a fully unclassified monograph, this appendix will only cover 

the book’s origination and generic content.

Year: 2005

Cover:

Figure 23: USAES SWEAT/IR Book Cover161

Model Summary

USAES developed the book and the book’s included model in cooperation with engineers 

and contractors from ERDC-CERL.

Book’s purpose was make up for the widely used SWEAT Model by providing more 

technical information on categories and giving commanders tools to execute recon and 

repair

Although classified FOUO due to propriety photographs and figures, the manual gained 

distribution throughout military and diplomatic engineering units

Along with the NTC and USMA models, this book supplements the doctrinal SWEAT 

Model and its categories

Expanded the use of the term infrastructure reconnaissance (IR)

The SWEAT Model
160

The Infrastructure Assessment and Survey Model

Year: 2006

Figure 24: The Infrastructure Assessment and Survey Model aka SWEAT Model162

Model Summary

Officially known as the Infrastructure Assessment and Survey Model

Referred to as “SWEAT” Model by most units and essential services practitioners

Initial Model Concepts designed in 2004 by NTC and the Army Engineer School

Used in Iraq since 2005

Outlined in doctrine FM 3-24 since 2006, FM 3-07 since 2008, and FM 3-34.170 since 

2008

Tracked by GAO audits since 2005 in Iraq and Afghanistan

Popular model still in use by many units as of 2010

Figure 24 shows one of the most popular interpretations of the model when applied to 

stability ops
161

Figure 25: Restoration of Essential Services Line of Effort (LOE)163
162

The Factor-Precedence Model

Holistic Restoration of Essential Services V 1.0

Year: 2010

Figure 26: Proposed Factor-Precedence Model164

Model Summary

Based on Infrastructure Assessment and SWEAT Models currently in use

Focused on holistic and repetitive evaluation of critical categories

Developed to integrate execution, leadership, and assessment into model

Tailored by Area of Operation (AO) at any military level

Tracked partially by past and current GAO audits

Used in various forms by units in Iraq

Compatible with doctrine and with many existing planning, intelligence, engineering, 

and analysis tools, see Figure 27
163

Figure 27: Factor-Precedence Model Interaction with other Military Tools & Programs165
164

Appendix 5: How to Apply the Essential Services Factor-Precedence Model 

This appendix provides a detailed description of the steps of the Factor-Precedence 

Model.166 Figure 28 presents an overview of the Factor-Precedence Model aligned with 

its complementary tasks of information operations, execution, leadership, and assessment.

Figure 28: The Factor-Precedence Model

Step 1: Form the Foundation using Recognized Essential Service Categories or 

Infrastructure Systems

The first step in the Factor-Precedence Model requires units to analyze the sixteen 

globally-recognized essential services categories that are needed to support basic needs 

for a culturally acceptable quality of life. The establishment of common categories forms 

a solid baseline for intelligence preparation, planning, and government engagement along 

bureaucracy lines. Because of widespread use and existing tools, most military units and 
165

leaders understand the categories and can ascertain initial requirements for action.167 Figure 

29 presents the categories identified in the first step of the Factor Precedence Model.

Figure 29: Step 1 of Factor-Precedence Model – Essential Service Categories

Table 7 provides a summary of the sixteen essential services categories identified and 

assessed during step 1.168

Table 7: Essential Services Recognized Categories
166

Essential Services Category Purpose/Description

Sewage/Sanitation Provides wastewater treatment to replicate the natural 

cleansing process by containment and treatment of watersaturated waste.

Water Supply - Drinking Provides water at adequate pressure for use in residential or 

industrial applications. In short term situations, appropriate 

quantities of treated water may meet health requirement.

Water Supply - Irrigation Provides certain non-potable water sources as irrigation for 

crops; may convert to drinking water sources after treatment.

Electricity Provides the production, distribution, and consumption of 

electricity for light, information technology (IT), heating or 

cooling, and industrial production. Most industrialized or ITbased societies require power to function and regain footing.

Transportation Provides waterways, roads, bridges, airports, and railroad 

networks to move goods and people and conduct military 

operations. The movement of goods and people is crucial to 

the functioning of civilian and military operations. The bulk of 

the populace and the economic activity will use street systems 

to support automobile traffic, commercial traffic, and public 

transportation. Road networks also prove essential for law 

enforcement and emergency response.

Trash/Waste Disposal Provides for transportation and disposal of wastes, ranging 

from municipal garbage to industrial wastes, in a controlled 

manner to ensure public health and safety. May sometimes 

include hazardous substances.

Health/Medical Primary purpose: Provides short and long-term health needs 

of a population. Secondary purpose: Provides emergency 

response capabilities which are maintained and coordinated 

with other agencies.

Academic/Education Provides the activities of educating, instructing, or imparting 

knowledge or skill. Usually refers to the physical infrastructure 

and supporting services that allow educational requirements to 

take place.

Food/Sustenance Provides nutrients in solid form that sustain growth, furnish 

energy, and maintain life; a basic human need.

Basic Shelter/Housing Provides public housing, private housing, commercial buildings 

& structures, and governmental buildings & structures.

Communication/Media Provides for the flow of information between people and 

institutions. Essential to the proper functioning of a society and 

becomes progressively more important as the society becomes 

more developed.

Energy (Oil/Gas) Provides all power sources required for an industrialized or 

IT-based society to function or for developing countries to 

become industrialized or IT based, heat production for warmth 

and food preparation, electricity for light, heating or cooling, 

and industrial production, and internal combustion for either 

industrial purposes or vehicle operation.
167

Agriculture Provides a wide range of industries to include livestock, 

orchards, aqua farming, and traditional planted crops. Performs 

functions of food sourcing and economic strength.

Public Safety Provides organizations and institutions that are employed to 

save lives and property in the event of an accident, natural 

disaster, or terrorist incident, and to ensure that good order 

and discipline is maintained. Includes police, fire, rescue, 

emergency medical services (EMS), and prisons per NTC 

SWEAT Smart Book.

Chemical/HAZMAT Provides products that are essential to [a state’s] economy and 

standard of living such as fertilizer for agriculture, chlorine for 

water purification, and polymers that create plastics.

Cultural/Historical Provides places of worship; also includes locations of historical 

or cultural significance. Such locations often generate strong 

emotional sentiments among various groups and can carry 

significance in terms of collective images of self, sources of 

great and often times competing pride, and may serve as 

physical manifestations of a populations’ identity.

Step 2: Refine the Categories using Geographical and Cultural Factors

The second step of the Factor Precedence Model is to refine the essential services 

categories by applying eight local geographical and cultural factors, as presented in Figure 

30 and Table 8. The output of this step is four to seven refined categories that represent the 

local population’s needs and are at actionable levels for counterinsurgents. Units may refine 

geo-cultural factors with tools such as area and infrastructure assessments, Engineering 

Research and Development Center’s (ERDC’s) Geo-Cultural Analysis Tools (GCAT), and 

Human Terrain System assessments based on local engagements.169
168

Figure 30: Step 2 of Factor-Precedence Model – Geo-Cultural Factors

Table 8 provides a summary of the eight geo-cultural factors identified and assessed 

during step 2.
169

Table 8: Factor-Precedence Model Geo-Cultural Factors

Geographical 

Factor

Description

Climate The five primary climate zones, Tropical, Dry, Temperate, Cold, and Polar 

represent the 30-year characteristic conditions of an area in terms of air 

temperature and precipitation. Seasonal shifts are also considered.

Population 

Density 

Urban populations comprised of 2,500 or more people living in a single area 

often show typical built-up conditions and industrialization. Populations not 

classified as urban compose the rural population. Urban populations require 

more focus on sewage and trash services due to health requirements in 

close quarters. Rural populations often focus more on irrigation water and 

transportation to facilitate farming and trade. Density factors may also guide 

prioritization of assisting more people.170

Extent of 

Damage to 

Infrastructure

Violence and infrastructure damage often come before or result from 

counterinsurgency operations. Measuring the extent of damage resulting 

from conflict can help counterinsurgents provide a visual means of restoring 

essential services.

Local Resources 

Available

Construction and management capabilities, raw materials, and host 

government capacity to manage services make up the most important local 

resource factors to improve essential services. This factor may also describe 

allocation of unit resources like money, personnel, or training that prove critical 

to restoration efforts.

Cultural Factor 

(needs, desires, 

expectations)

Description

Cultural 

Environment 

Quality of life requirements determine the critical needs of the populace 

and differ in every culture based on the culture’s individualism and religious 

focus. According to Hofstede, individualistic cultures require more personal 

support, and collectivistic cultures require more support to the tribe, group, or 

organizational culture. Religion also plays heavily into the cultural context in 

many areas around the world.171

Historical 

Services 

Standards 

Historical service standards provide an important factor that dictates the 

essential services expectations of people in the area. Past performance and 

services of great expectations manage the people’s expectation and needs. 

Flows from the level of development experienced by the area.172

Humanitarian 

Minimum 

Standards 

(United Nations)

Based on Maslow’s Hierarchy of Needs and basic medical information, the 

United Nations developed the basic requirements for sustaining the lives and 

dignity of those affected by calamity or conflict. The Minimum Standards which 

follow aim to quantify these requirements with regard to people’s need for 

water, sanitation, nutrition, food, shelter and health care.173

Economic Base The growth, decline, or stagnation of the local community rests upon basic 

economic activity, which integrates local needs and sustains buying power. 

Agricultural, market, service, and production-based economies are affected 

most heavily by this factor.

Step 3: Establish Precedence using Leadership and Essential Services Priorities
170

Using the refined categories from the second step, the third step in the Factor-Precedence 

Model allows units to apply leadership and essential services priorities, as shown in Figure 

31 and listed in Table 9, to rank order essential services operations and projects. The 

output of this step is a final prioritization that governs specific actions within categories 

and within individual projects to ensure effective and efficient execution of area essential 

services operations. Adjustments to funding, resources, or commander’s intent can shift 

the precedence of refined categories. Due to the long-term nature of essential service 

operations, units should keep adjustments to the minimum necessary. 
171

Figure 31: Step 3 of Factor-Precedence Model – Precedence Elements
172

Table 9: Factor-Precedence Model Leadership and Essential Services Precedence Elements

Leadership Priorities Description

Commander Priority Commander priority provides a critical element that leverages leadership 

guidance and mission focus. Planners must meet the Commander’s 

Intent by implementing his prioritization while ensuring that actions nest 

with higher headquarters priorities. Maintaining consistent priorities in 

essential service assists in consistent growth and improvement.

Local Government 

Feedback 

Local government feedback incorporates local leadership’s assessments 

and existing plans. The integration of the government’s funding, 

operations, and maintenance capability into restoration activities proves 

critical into understanding individual and Group needs.174

Local Population 

Feedback 

Local feedback in terms of surveys and assessments provide a 

relative perspective on what they desire or want. Understanding the 

local feedback helps build prioritization before action and helps inform 

messages needed during and after execution.175

Essential Services 

Priorities

Description

Interdependencies Systemic connections between essential services have synergistic 

effects when critical nodes either improve or decline. Interdependence, 

described as the “Tailored Network” of related services by 2/25 Stryker 

Brigade Combat Team, informs critical categories and helps pinpoint 

critical projects.176

Time Horizon Time horizon balances the short and long-term needs with the operational 

timeframe of the unit. Certain categories, like electricity, have longterm impacts and have long-lasting projects. Practitioners should also 

be aware of connections between long-term projects and short-term 

projects. Again, electricity provides an example with long-term projects 

in power production needing connection to short-term projects like power 

sub-stations. Without a systematic connection between projects, power 

produced would never make it to the end user. Essential services shortterm fixes must maintain balance with long-term effects.177

Resource Limitations Unit resources such as budget, personnel, and technical expertise, may 

limit certain actions while facilitating others. Specific budget cut lines 

may adjust priority of individual categories and specific projects during 

resource constrained periods.178

Utility of Action The utility of each balances the cost-benefit analysis, or bang for the 

buck, with the requirements to fairly meet essentials service needs.179
173

Notes

1. David Galula, Counterinsurgency Warfare: Theory and Practice (New York, NY: Praeger, 

1964), 89. David Galula, French military officer and scholar, proved influential in developing 

the theory and practice of counterinsurgency warfare in the late 1960s and early 1970s. Galula 

participated in or directly studied the Chinese Communist Revolution, the Greek Civil War, the 

Indochina War, and the Algerian War. His work’s popularity has surged since the 2006 version 

of Field Manual (FM) 3-34 Counterinsurgency cited his Counterinsurgency Warfare: Theory and 

Practice several times. This quote highlights the importance of kinetic and non-kinetic operations 

during counterinsurgency operations.

2. Author’s Note: To focus the scope of this monograph, the analysis within focuses on models 

used during counterinsurgency operations. Restoring essential services may help forestall insurgency 

following major combat operations. Restoring essential services may also decrease human suffering 

and improve government effectiveness during humanitarian operations in the United States and 

overseas. Appendix 1 and 2 offer a comprehensive guide to the acronyms, terms, and definitions in 

this monograph.

3. Galula, 4. Galula refined his definition of insurgency based on his experiences in Algeria 

combined with his detailed study of historical guerilla and insurgency movements. See Appendix 1 

for more information on definitions and terms used throughout this monograph.

4. United States (US) Department of Defense, US Army Field Manual (FM) 3-24 / Marine 

Corps Warfighters Pamphlet (MCWP) 3-33.5, Counterinsurgency (Washington, DC: Government 

Printing Office, 2006), Glossary 5. FM 3-24 cites Galula extensively throughout the manual showing 

the close connection between prevailing theoretical and doctrinal definitions for insurgency.

5. (US) Department of Defense, US Army Field Manual, 1-1. Both Army and Joint 

doctrine define counterinsurgency as, the “[c]omprehensive civilian and military efforts taken 

to defeat an insurgency and to address any core grievances.” As a note, practitioners often refer 

to counterinsurgency as COIN. See also US Department of Defense, Joint Publication 1-02, 

Department of Defense Dictionary of Military and Associated Terms. Washington, DC: Government 

Printing Office, 2010, 108.

6. Appendix 3, Modern Counterinsurgency Operations and Essential Services Key Events, 

provides a comprehensive list of key insurgencies and counterinsurgencies after World War II. 

Appendix 3 also highlights American involvement in the restoration of essential services during 

counterinsurgency operations since WWII.

7. US Department of Defense, US Army FM 3-07, Stability Operations (Washington, DC: 

Government Printing Office, 2008), 1-17. FM 3-07 provides a comprehensive relationship between 

population needs, government support, and effective counterinsurgency efforts. This monograph 

will expand on the geographical, cultural, and regional factors that influence essential services.

8. FM 3-24, 3-11. According to FM 3-24, stabilizing a population requires meeting their needs. 

People pursue essential needs until they are met, at any cost and from any source. People support 

the source that meets their needs, whether those needs be security or physiological requirements. If 

needs provisions come from an insurgent source, the population is likely to support the insurgency. 

If the HN government provides reliable essential services, the population is more likely to support 

the government. 
174

9. FM 3-24, 3-11, 2-11. FM 3-07 proposes that during counterinsurgency operations, gaining 

support of the populace and increasing the legitimacy of the host nation government become the 

military’s highest priorities. Military and diplomatic efforts in political, economic, and service areas 

compliment direct military actions.

10. James Dobbins, Seth G. Jones, Keith Krane, and Beth Cole DeGrasse, The Beginner’s Guide 

to Nation-Building (Santa Monica: RAND Corporation, 2007), xxxiii. Major combat operations and 

nation-building establish a different set of initial conditions. Appendix 1, Definitions and Terms, 

provides a definition of nation-building. According to Dobbins and his co-writers, “[t]he prime 

objective of any nation-building operation is to make violent societies peaceful, not to make poor 

ones prosperous, or authoritarian ones democratic.”

11. See Appendix 3, Modern Counterinsurgency and Essential Services Key Events. Appendix 

3 outlines the major insurgencies and counterinsurgency events since 1942. Each event has a 

timeline and historical relevance. Due to the detail available for American counterinsurgency and 

essential services efforts, citations for each event within Appendix 3 accompany the write up to 

facilitate additional research.

12. US Department of Defense, Department of Defense Directive (DoDD) 3000.05: Military 

Support for Stability, Security, Transition, and Reconstruction (SSTR) Operations (DoDD 3000.05, 

November 28, 2005) (Washington, DC: Secretary of Defense for Policy, 2005), 1-2. DoDD 3000.05 

directs military units to conduct stability operations outside the United States in coordination 

with other government elements and focus on tasks to “maintain or reestablish a safe and secure 

environment, provide essential governmental services, emergency infrastructure reconstruction, 

and humanitarian relief.” See Appendix 1 for a more detailed definitions for stability operations, 

stabilization, infrastructure, reconstruction, and nation building.

13. FM 3-07, 2-11 – 2-12. FM 3-07 provides detailed guidance on supporting essential 

services as a primary logical line of operation and an Essential Stability Task in support of stability 

operations. The essential stability task matrix is an evolving interagency document to help planners 

identify specific requirements to support countries in transition from armed conflict or civil strife to 

sustaining stability. Military assets compliment other government agencies. In practical application, 

essential services may have its own line of effort. In other applications, units may make essential 

services a component of the governance, economics, or civil capacity lines of effort. 

14. FM 3-24, 2-1.

15. Brett Pierson, “A System Dynamics Model of the FM 3-24 COIN Manual,” 76th 

Military Operations Research Society Symposium (MORSS) (June 10-12, 2008) (Washington, 

DC: Warfighting Analysis Division, 2008) http://www.mors.org/UserFiles/file/meetings/07ic/

Pierson.pdf (accessed on December 7, 2010), slide 16. According to Captain Pierson, Systems 

Dynamics Modeling provides a technique for modeling complex systems, framing issues, showing 

interdependencies, and portraying the impact of initiatives. Figure 1 graphically depicts the essential 

services and economic interactions during a counterinsurgency as well as the interaction’s impact 

on a neutral populace. Pierson’s analysis shows the effects of critical actions directed by Army FM 

3-24’s population-centric approach.

16. Pierson, “A System Dynamics Model of the FM 3-24 COIN Manual,” Figure 1 shows the 

author’s recreation of Captain Pierson’s Systems Dynamic Model. Captain Pierson’s model depicts 

systematic connection between essential services, needs, expectations, and satisfaction related to the 

positive or negative impacts actions have on a neutral populace. The dotted boundary symbolizes 

the open nature of the counterinsurgency system where other factors and actions impact the neutral 

populace, insurgency, and host nation government. The arrows show connections between actions 
175

and outcomes. Pluses (+) denote a positive change or reinforcing relationship caused by one 

variable on the next. Minuses (-) denote a negative change or balancing relationship caused by one 

variable on the next. A plus and minus (+/-) denotes a relationship going either direction based on 

performance. Two critical counterinsurgent activities, economic investment and restoring essential 

services, greatly increase the support for the host nation government. 

17. Gordon L. Lippitt, Visualizing Change Model Building and the Change Process (Fairfax, 

VA: NTL Learning Resources, 1973), 2. http://nationalforum.com/Electronic%20Journal%20

Volumes%5CKritsonis,%20Alicia%20Comparison %20of%20Change%20Theories.pdf (accessed 

on November 26, 2010). Lippitt’s simple definition sets the tone for key elements of any model 

(components, relationships, and dynamics). Theoretically, a model can represent anything in the 

world, but models must meet certain criteria to remain effective. According to Lippitt, models must 

be clear, concise, simple, and flexible; See also George E. P. Box and Norman R. Draper. Empirical 

Model-Building and Response Surfaces (Wiley Series on Probability and Statistics) (New York, NY: 

John Wiley and Sons, Inc., 1987), 10.

18. FM 3-24, 4-3. Paragraph 4-12 covers the techniques for model making and application 

during conduct (planning, preparation, execution, and assessment) of counterinsurgency operations. 

During the last nine years of combat operations in Iraq and Afghanistan, military and diplomatic 

leaders have used a variety of models for restoration of essential services during counterinsurgency 

operations.

19. FM 3-24, 3-11. This section provides a general definition with supplemental information 

in Appendix 1. Doctrine for essential services provides little guidance in how to assess and meet the 

needs of the people to reinforce a host-nation government in a counterinsurgency environment.

20. Operations Group Sidewinder Team, SWEAT Smart Book: Practical Applications For 

Deploying Units Version 3.0, Fort Irwin, CA: National Training Center (NTC), 2005. http://www.

irwin.army.mil/Units/Operations+Group/Sidewinder/default.htm (accessed on August 28, 2010), 

3. Engineers tend to focus on the structures and capacity to manage the structures. Key tasks for 

engineers include maintenance, construction, and repair for facilities and infrastructure.

21. US Department of State, Office of the Coordinator for Reconstruction and Stabilization, 

“Post-Conflict Reconstruction Essential Tasks (April 2005).” http://www.crs.state.gov/index.

cfm?fuseaction=public.display&shortcut=J7R3 (accessed on November 20, 2010), iii. In a very 

different outlook to the military, especially engineers, the Department of State connects the restoration 

of essential services with government and economic systems. Diplomats use this outlook to focus on 

dialogue, budgeting, the political process, and long term aspects of political development.

22. DoDD 3000.05, 2. DoDD 3000.05 sets the tone for the importance and operational relevance 

of essential services to the military.

23. Both Section 1 and Appendix 3 address the application of counterinsurgency and essential 

services efforts before and after 2004. Section 3 will provide additional information about the 

SWEAT Model and its use in Iraq and Afghanistan.

24. Samuel Griffith, Mao Tse-Tung On Guerrilla Warfare (Baltimore, MD: The Nautical & 

Aviation Publishing Company of America, 1992), 71. Mao Tse-Tung, also Mao Zedong, wrote one 

of the first complete manuals on insurgency and guerilla warfare. Over the next ten years, he would 

execute his doctrine helping to establish the People’s Republic of China (PRC) after overthrowing 

the existing regime.

25. Galula, 74.
176

26. Kalev Sepp, “Best Practices in Counterinsurgency.” Military Review (May-June 2005): 10. 

See also John A. Nagl, Learning to Eat Soup With a Knife: Counterinsurgency Lessons from Malaya 

and Vietnam (Chicago, IL: University of Chicago Press, 2005), 22.

27. FM 3-24, 1-27. 

28. David J. Kilcullen, “Three Pillars of Counterinsurgency,” Remarks delivered at the US 

Government Counterinsurgency Conference on September 28, 2006, Washington, DC: Office of 

the Coordinator for Counterterrorism, 2006. www.au.af.mil/au/awc/awcgate/uscoin/3pillars_of_

counterinsurgency.pdf (accessed December 4, 2010), 4. Dr. Kilcullen, Australian counterinsurgency 

consultant, co-author of FM 3-24, and the Senior Counterinsurgency Advisor to General David 

Petraeus in Iraq from 2007 to 2008, placed many of these population-centric counterinsurgency 

designs into the 2007-2008 Iraq Campaign Plan and Counterinsurgency Policy. Based on 

the perceived success of the “surge’s” approach, he taught his approach in Iraq to incoming 

commanders, including the author, and during conferences with the Army and Marines following 

his OIF experience.

29. Abraham H. Maslow, Motivation and Personality, Third Edition (New York, NY: Addison 

Wesley Educational Publishers, 1987), 15-22. Abraham Maslow provides the best and most 

commonly referenced outline of needs known as Maslow’s Hierarchy of Needs. As shown by Figure 

2, the requirements that form the bottom two sections of the pyramid establish the baseline standards 

for human physiological and safety needs. Maslow proposed that humans must meet basic needs 

then they gain motivation and access to progress higher on the hierarchy. According to FM 3-24 

section C-7, military practitioners “must focus on meeting basic needs first, and then progress up 

Maslow’s hierarchy as each successive need is met.”

30. Justin B. Gorkowski, “A Penny for Your Thoughts, a Nickel for Your Heart: The Influence 

of the Commander’s Emergency Response Program on Insurgency” (Master’s thesis, Naval Post 

Graduate School, 2009), 32. Figure 2 is the author’s interpretation of Maslow’s Hierarchy of Needs 

aligned against the categories of infrastructure and essential services. Although Maslow did not 

draw this pyramid in his own work, his detailed descriptions combined with the progressive nature 

of his hierarchy make the pyramid a popular interpretation of his ideas. Justin Gorkowski created a 

figure similar to Figure 2 in his work and compared it with needs of the Kirkuk Iraqis.

31. Gambrel R Ciani, “Maslow’s hierarchy of needs: Does it apply in a collectivist culture,” 

Journal of Applied Management and Entrepreneurship, 8 (2003), 143.

32. Geert Hofstede, “The Cultural Relativity of the Quality of Life Concept.” Academy of 

Management Review 9 (July 1984): 389–398. http://www.nyegaards.com/yansafiles/Geert%20

Hofstede%20cultural%20attitudes.pdf (accessed on November 20, 2010), 390. Hofstede took into 

account cultural and environmental factors such as power distance, masculinity, and that help add to 

the utility of Maslow’s work.

33. B.F. Skinner, Science and Human Behavior: Behaviorism. (New York, NY: The Free 

Press, 1953), 9-10. Skinner focused on environment, conditioning, and learning curves associated 

with cultural norms.

34. Pierson, 7 and 16.

35. The effect of specific restoration actions or projects on violence levels exists outside the 

scope of this monograph. On-going systems and mathematical modeling studies by the United 

States Military Academy Department of Systems Engineering may help to refine ideas on this topic 

in the future.
177

36. Todd Helmus, Christopher Paul, and Russell Glenn. Enlisting Madison Avenue: The 

Marketing Approach to Earning Popular Support in Theaters of Operation (Santa Monica: RAND 

Corporation, 2007), 139.

37. FM 3-07, vi. People who do not have their needs met look to alternate sources like 

insurgents or alternate organizations that may have hostile intentions towards the US

38. FM 3-07, 50. Helmus, Paul, and Glenn encourage the use of civilian and military rewards 

to highlight the benefits of popular compliance. Focus by the authors on the incentive nature of such 

projects is critical and they go on to warn of the potential danger if insurgent groups become familiar 

with the process and deliberately take action to deny aid.

39. Alexander Fullerton and Garth Myers, “Fitting into the Fight – An Engineer’s Dream From 

a Brigade Troops Battalion S3,” Small Wars Journal (2009). Richmond, VA: Small Wars Foundation 

LLC, 2004. http://smallwarsjournal.com/blog/journal/docs-temp/221-fullerton.pdf (accessed on 

January 25, 2011), 4-5.

40. Dawson Plummer, “Examining the Effectiveness of SWET and the Sons of SWET in 

OIF.” (Master’s monograph, School for Advanced Military Studies (SAMS), Command and General 

Staff College, 2007), 30. Plummer’s SAMS monograph shows both Marine and Army application 

in late 2004. He reviews the different versions of the SWEAT family of acronyms that units have 

developed over time including SWEAT, SWEAT-MSO, SWET-H, SWET-MS, and others. Plummer 

calls the SWEAT family of acronyms the “sons of SWEAT.”

41. Travis Lindberg, et al., Infrastructure Assessment Methodology, 73rd Military Operations 

Research Society Symposium (MORSS) (21-23 June 2005) (West Point, NY: Department of Systems 

Engineering United States Military Academy, 2005), 12. Dr. Manous led the team, but then-Captain 

TJ Lindberg provided the briefing and outlined most of the research data. The team developed 

“checklists” to support the assessment, built models based on American domestic infrastructure, and 

then inferred values for host-nation infrastructure in the Theater of Operations (TO) effort.

42. Travis Lindberg, “The Critical Infrastructure Portfolio Selection Model” (Master’s thesis, 

Command and General Staff College, 2008), iii.

43. John V. Farr and Brian D. Sawser, US Embassy (Kabul) Value Model and Project Analysis 

Tool (West Point, NY: Department of Systems Engineering, 2010), ‘Intro’ Tab and ‘How to Use’ 

page. The program provided useful context for individual project impact and project prioritization 

techniques.

44. Author’s Note: Figure 3 provides a graphical representation of the comparison technique 

used in this monograph. Using three modern examples compared against five comparison criteria, 

this monograph attempts to determine the most effective model during a counterinsurgency. Section 

3 and 4 will present an in-depth review of each model and will expand on the highlights shown in 

Figure 3. 

45. Peter Chiarelli and Patrick Michaelis, “Winning the Peace: The Requirement for Full 

Spectrum Operations.” Military Review (Jul-Aug 2005): 4–17, 10. Major General Chiarelli makes 

a solid case for the relationship between status of infrastructure and essential services and insurgent 

support by the populace.

46. US Department of Army and US Marine Corps, US Army FM 3-34.170/ MCWP 3-17.4 

Engineer Reconnaissance (Washington, DC: Government Printing Office, 2008), C-1. FM 3-24, 

FM 3-07, and FM 3-34.170 all cover important aspects of the Army’s SWEAT Model. FM 3-34.170 

shows the SWEAT Model as a way to think about categories of projects and support.
178

47. SWEAT Smart Book, 3. The National Training Center’s (NTC) SWEAT Smart Book 

provides an effective training tool for engineers and SWEAT practitioners. The majority of deployed 

units have received training on one or both of the essential service support products. The SWEAT/

IR Book provides excellent references for reconnaissance, assessments, and prioritization. See 

Appendix 4 for additional information on both products.

48. See Appendix 3 for additional information on historical programs and services models. 

Although HES and CORDS form some of the early roots to infrastructure assessment, reconnaissance, 

and repair, this monograph will focus only on the relationship between essential services models and 

the Vietnam-era HES and CORDS programs.

49. Chiarelli and Michaelis, 9. The first fully documented use of the SWEAT Model in a 

counterinsurgency environment came from the Military Review article written by Major General 

Chiarelli and MAJ Patrick Michaelis. The article and division history also refer to the program as 

“sewage, water, electricity, and solid waste” with a minor concentrations on “hospitals, schools, 

communications, and emergency response networks.”

50. FM 3-34.170, C-1. Like doctrine, the United States Army Engineer School (USAES) 

would rather practitioners call the SWEAT Model by the name Infrastructure Reconnaissance 

to prevent units from focusing too narrowly on sewage, water, electricity, academic, and trash 

(SWEAT) categories. In their own words, units currently use SWEAT because “SWEAT is a great 

acronym. It has caught on and is in widespread use.” FM 3-34.170 provides a detailed discussion on 

the infrastructure reconnaissance and assessment process.

51. FM 3-07, 4-11. SWEAT-MSO stands for sewage, water, electricity, academics, trash, 

medical, safety, and other considerations.

52. SWEAT Smart Book, 5.

53. FM 3-34.170, C-1. FM 3-34.170 provides doctrinal guidance for engineer reconnaissance 

across the full spectrum of operations. The manual introduces engineer technical reconnaissance 

support and infrastructure reconnaissance. Doctrine officially names the essential services restoration 

model the ‘Infrastructure Assessment and Survey Model’ but recognizes that most practitioners call 

it the ‘SWEAT Model.’ The doctrinal SWEAT Model provides a basic understanding of the essential 

services categories, conditions, and end states required for success. Doctrine provides key tasks 

required in a typical restoration landscape and expects practitioners to use engineering references 

and smart books to increase effectiveness.

54. US Department of the Army, US Army FM 3-0 Operations (Washington, DC: Government 

Printing Office, 2008), 6-7. Commanders and staffs analyze civil considerations in terms of the 

categories expressed in the memory aid ASCOPE (areas, structures, capabilities, organizations, 

people, and events). Civil considerations help commanders develop an understanding of the social, 

political, and cultural variables within the area of operations and how these affect the mission.

55. FM 3-34.170, C-2. 

56. SWEAT Smart Book, 108-112. The assessment and measurement techniques provided by 

the SWEAT Smart Book outlined measuring service levels using the green, amber, yellow, black 

system. The infrastructure category tables provide a description of status. Based on the assessed 

status of infrastructure, practitioners can establish required tasks or objectives needed to reach longterm objectives. 

57. SWEAT Smart Book., 120 (References). The SWEAT Smart Book focuses on use of 

resource and project prioritization to meet unit objectives. The general criteria of effort, health 
179

and safety, cost, local perception, self-governance, and infrastructure interdependence help units 

and commanders understand local needs and develop their final prioritization. The SWEAT Smart 

Book credits the United States Military Academy with developing the exact same categories. “The 

United States Military Academy has developed criteria to assist the commander in determining 

the prioritization of infrastructure within his area. The following are general criteria to assist the 

commander and his staff.”

58. SWEAT Smart Book., 3-5.

59. Galula, 54-56.

60. FM 3-34.170 / MCWP 3-17.4, 170 and C-2.

61. US Department of the Army, US Army FM 5-0 The Operations Process (Washington, 

DC: Government Printing Office, 2010), 1-5 and C-7. Operational variables, PMESII-PT, and civil 

considerations, ASCOPE, represent tools that allow commanders to understand and visualize the 

battlefield. Both variables provide valuable information on essential services.

62. US Department of the Army, US Army FM 3-34.400 General Engineering (Washington, 

DC: Government Printing Office, 2008), Appendix C. Appendix C provides a complete explanation 

of rating systems and category color coding based on outcomes of the engineer technical assessment.

63. Author’s Note: Factor in this monograph literally means ‘who or which acts’ and highlights 

the importance of using geography and culture to filter the basic essential services into a refined 

focus. In the Factor-Precedence model’s application, factors differ from area to area, but subordinate 

units should nest their analysis with conclusions and guidance from their higher headquarters. 

64. Dan A. Morrison, Geo-Cultural Analysis ToolTM (GCAT). Remarks and presentation 

delivered at the US DoD Modeling and Simulation (M&S) Conference in Orlando, FL on March 

10, 2008. Champagne, IL: US Army Research & Development Center (ERDC), 2008, 26. In 2008, 

ERDC proposed a complete Geo-Cultural Analysis Tool (GCAT) to “put people back into the 

picture, put socio-culture in its place on the map.”

65. Author’s Note: Precedence in this monograph literally means the condition of being 

considered more important than someone or something else; priority in rank; the right to precede in 

order, rank, importance, or priority.

66. Author’s Note: The Factor-Precedence Model can easily accommodate use of and 

interaction with all of the programs, models, tools, and techniques listed in Factor-Precedence 

Model Figure.

67. David J. Kilcullen, “Counterinsurgency in Iraq: Theory and Practice, 2007,” Small Wars 

Center of Excellence Counterinsurgency Seminar 07 (CS 07 – 26 September 2007), Quantico, 

VA: Marine Corps Warfighting Laboratory, 2007. Report written by Mr. David Dilegge. http://

smallwarsjournal.com/documents/COINSeminarSummaryReport.doc (accessed on December 4, 

2010), 53. David Kilcullen provides this direct quote in his presentation. See also John A Nagl, 

Learning to Eat Soup With a Knife: Counterinsurgency Lessons from Malaya and Vietnam (Chicago, 

IL: University of Chicago Press, 2005), 91. Under Templer, the British developed a successful 

counterinsurgency doctrine that their military used throughout the rest of the campaign. Templer 

instilled his emphasis on innovation and honest assessment throughout the British Army in Malaya. 

Templer’s efforts allowed the British Army to adapt to the insurgents over the following years.

68. Nagl, 101. Major Bill Tee, an army officer working with Templer in Malaya, noticed 

positive impacts of working military and political agendas together to provide water, electricity, and 

other essential services in areas where security forces set the right conditions.
180

69. Author’s Note: The author served during Operation IRAQI FREEDOM (OIF) from 

2007 to 2009 in one of MND-B’s subordinate units, 2/25 Stryker Brigade Combat Team (SBCT). 

Although the Factor-Precedence Model did not exist at the time, the 1st Cavalry Division deviated 

so much from existing SWEAT Models and focused so heavily on assessments, reconnaissance, 

holistic prioritization, and constant re-evaluation that the 2009 case study provides a framework for 

showing key elements of the Factor-Precedence Model. The military’s use 

70. Author’s Note: The Army also uses evaluation (eval) criteria to compare feasible courses 

of action (COAs) during the detailed planning process known as the Military Decision Making 

Process (MDMP). The case evaluation framework builds on both political science’s comparative 

politics methodology and the Army’s course of action evaluation criteria to compare the SWEAT 

Model and the Factor-Precedence Model. More details on the evaluation criteria follow in Table 1.

71. Paul Davidson Reynolds, A Primer on Theory Construction (Boston, MA: Allyn & Bacon, 

1971), 135. According to Reynolds, keeping things simple remains an important part of effective 

theory or models. He stated that, “[t]wo ‘easy’ concepts may be considered ‘simpler’ than one 

‘difficult’ concept.”

72. John Lewis Gaddis, The Landscape of History: How Historians Map the Past (New York, 

NY: Oxford University Press, 2002), 79. According to Gaddis, effective models adapt to sensitive or 

fast changing initial conditions. Most establish common categories then applying screening factors 

to situations.

73. Gaddis, 107-108. Gaddis wrote that reproducibility means that repeated application of a 

model or theory to past, present, and future cases will match closely with reality. Effective models 

for essential services must match not only the past, but they need to predict with some level of 

certainty the future.

74. Antoine Bousquet, The Scientific Way of Warfare. (New York, NY: Columbia University 

Press, 2009), 21. a model or scientific discourse’s “ability to transform radically its constitutive 

theories and frameworks while still claiming a single corpus and methodology. It is this ability to 

remould [sic] itself that has secured science’s lasting legitimacy as the central authoritative discourse 

in the Western World.”

75. Bousquet, The Scientific Way of Warfare, 4. Linking “The scientific way of warfare 

therefore refers to an array of scientific rationalities, techniques, frameworks of interpretation, and 

intellectual dispositions which have characterised [sic] the approach to the application of socially 

organised [sic] violence in the modern era.”

76. Catherine Dale, Operation IRAQI FREEDOM: Strategies, Approaches, Results, and 

Issues for Congress – RL34387. Washington, DC: Congressional Research Service, 2009. http://

www.fas.org/sgp/crs/mideast/RL34387.pdf (accessed on January 25, 2011), 140.

77. Dale, Operation IRAQI FREEDOM., 62. CJTF-7 planned to lead the security line and 

provide support to CPA efforts in other areas. Almost immediately, CJTF-7 began fighting a strongerthan-expected Iraqi insurgency. These lines of operation, also called categories of effort at the time, 

evolved greatly over time as leaders and commanders in the field interacted with decision makers in 

Washington, DC In the absence of a comprehensive reconstruction plan, dialogue continued about 

the best ways to achieve security and while improving the complex lines of politics, economics, and 

essential services.

78. Dale, Operation IRAQI FREEDOM, 32-42. The new US Embassy, led by Ambassador 

John Negroponte, had no direct rule requirements from the CPA. Instead, the Iraq Embassy only had 

only responsibility for representing American interests and coordinating efforts with the military. 
181

See also, Chiarelli and Michaelis, 6. Throughout 2004, Marine attacks in Fallujah, just west of 

Baghdad, and militia leader Muqtada al-Sadr’s grass roots movement in Baghdad’s Sadr City cause 

increased violence and spillover issues in the streets of Baghdad. The insurgents deftly placed blame 

for the “lack of power” squarely on the impotence of the fledgling Iraqi Government and supporting 

coalition forces, citing the historical truth of power always being available under the Saddam regime.

79. Dale, Operation IRAQI FREEDOM, 48-49. To support and partner with the military 

components of the Interim Government of Iraq, MNF-I gained command and control responsibility 

for the Multi-National Corps-Iraq (MNC-I), also located in Baghdad. MNC-I became the 

operational-level headquarters reporting to MNF-I and had responsibility for synchronizing coalition 

forces actions throughout Iraq. The overall strategy focused on defeating insurgents and terrorists 

conventionally. Then, Coalition Forces could eliminate unconventional support to the enemy from 

the local population while increasing legitimacy of the Iraqi government.

80. Frederick Barton and Bathsheba Crocker, Progress or Peril? Measuring Iraq’s Reconstruction 

(Washington, DC: Center for Strategic and International Studies, 2004), 52. Reconstruction of 

infrastructure had progressed slowly after the invasion. Problems with corruption, increasing 

demand, and unreasonably high expectations of coalition forces ability to immediately provide 

services decreased population support for the Iraqi government and American counterinsurgency 

support. Combat battalions, along with their Iraqi district and city engineer counterparts, identified 

many shortfalls and projects. Until ERP became available, they lacked the funds and manpower to 

execute improvements. 

81. Steven C. Draper, 1st Cavalry Division Museum Director, “1st Cavalry Division History 

- GWOT History.” Fort Hood, TX: 2010 1st Cavalry Division Museum. http://www.hood.army.

mil/1stcavdiv/about/history/gwot.htm (accessed on January 25, 2011), 2-5. Mr. Draper provided a 

variety of unclassified documents outlining the efforts and accomplishments of 1st Cavalry Division 

in 2005. Upon taking command in Iraq, the division gained direct control of more than 39,000 

uniformed members and 62 battalions of active duty, reserve, and National Guard Soldiers, Marines, 

and international coalition partners.

82. Chiarelli and Michaelis, 7. According to Major General Chiarelli, the Division engaged in 

multiple lines of operations simultaneously to defeat the enemy and win the support of the Iraqi people. 

Combat Operations, Train & employ Security Forces, Essential Services, Promote Governance, and 

Economic Pluralism) while mutual supporting, were discrete, the sixth – Information Operations.

83. Bruce Pirnie and Edward O’Connell, Counterinsurgency in Iraq (2003-2006) (Santa 

Monica, CA: RAND National Defense Research Institute, 2008), 41-42.

84. Chiarelli and Michaelis, 6. Figure 7 shows the author’s recreation of Major General 

Chiarelli and TF Baghdad’s lines of operation (LOO). General Chiarelli established his LOOs to 

focus his forces on securing and stabilizing the Iraqi environment to facilitate a legitimate, freely 

elected city government that accepts economic pluralism. Essential services would become a major 

part of Chiarelli’s Campaign Plan. 

85. Plummer, 2. Plummer’s monograph lays out the differences between essential services in 

Baghdad before and after the war. By 2005, the difference between the Iraqi populace’s expectations 

of what American forces could provide in essential services versus the actual amount of change on 

the ground caused a great deal of tension and violence in Baghdad and in neighboring provinces.

86. Plummer, 1-2. 1st Cavalry Division written orders and after-action-reports outline the 

division’s essential services restoration approach as the SWET, SWET-H, or SWET-MSO Model. 

For simplification, this monograph will refer to these approaches as the SWEAT Model. 
182

87. Chiarelli and Michaelis, 10. The division dedicated the expertise of the engineer corps 

and established a cooperative effort with the University of Baghdad to identify, fund, and work with 

local government officials, contractors. They also worked with the US Department of State and 

the US Agency for International Development (USAID) to provide the essential services critical 

to demonstrating those visible first-mile signs of progress in areas most likely to produce insurgent 

activity.

88. Fullerton and Myers, 7. According to Fullerton and Myers, the Brigade Troops Battalion 

(BTB) usually provides a Brigade Combat Team with intelligence, engineering, military police, 

administrative, and management support during required contingency missions or operations.

89. Plummer, 11.

90. Office of the Assistant Secretary of the Army (Acquisition, Logistics, & Technology) 

and the US Army Corps of Engineers, “Iraq Reconstruction Report: Focusing on Construction 

and Sustainment, 12.08.06” Arlington, VA: Strategic Communications Office, 2006. http://www.

dvidshub.net/index.php?script=pubs/pubs_show.php&id=18&name=Iraq%20Reconstruction%20

Report (accessed on January 25, 2011), 2-3.

91. Joseph A. Christoff, “Rebuilding Iraq: Status of Funding and Reconstruction Efforts,” 

Report to Congressional Committees - GAO-05-876 (July 2005), United States Government 

Accountability Office (GAO): Washington, DC, 2005, http://www.gao.gov/new.items/d05876.pdf 

(accessed on January 25, 2011), 7. This chart highlights use of the SWEAT Model throughout Iraq. 

The figure also shows that little change took place in spending during 2004 and 2005. Spending 

focused on the SWEAT-MSO categories and dwarfed security and justice spending. The report 

makes the critical note, almost foreshadowing, that without security all essential services efforts will 

ultimately fail.

92. Joseph A. Christoff, Rebuilding Iraq: Stabilization, Reconstruction, and Financing 

Challenges - GAO-06-428T, Testimony before the Committee on Foreign Relations, United States 

Senate (February 8, 2006), United States Government Accountability Office (GAO): Washington, 

DC, 2006, http://www.gao.gov/new.items/d06428t.pdf (accessed on January 25, 2011), 19.

93. Barton and Crocker, 45-55. This national survey of Iraq shows the importance of jobs and 

basic needs to the people. By the end of 2005, the survey shows a growing trend of displeasure with 

Government of Iraq (GoI) and Coalition Force (CF) performance based on the limited services and 

growing violence.

94. Barton and Crocker, 52-64. This table outlines the author’s interpretation of Iraqi services 

satisfaction at the time of Barton and Crocker’s survey. The percentages outline general percentage 

of people surveyed who met each criteria or category. Barton and Crocker show that most perceptions 

actually decreased between 2004 and 2006 because of the Coalition’s inability to deliver goods and 

services at a rate higher than Saddam’s regime and because of the Iraqi populace’s heightened 

expectations for services and support.

95. Christoff, 15-25. The results of the US Joint Warfare Analysis Center’s summer of 2006 

survey of some of the local population in Iraq will reveal that the majority of their higher priority 

needs and concerns were not being addressed or met by the US Coalition forces or the Iraqi 

government. 

96. Office of the Assistant Secretary of the Army (Acquisition, Logistics, & Technology) and 

the US Army Corps of Engineers, 6. This 2006 report shows drops in almost all essential services 

areas between 2004 and 2006. Based on enemy attacks and project delays, the real and perceived 

restoration of essential services failed to help the people of Baghdad and improve their support to 

the Iraqi Government.
183

97. Dale, 136. Graphic portrays the number of attacks in Iraq by month on Coalition Forces 

and their partners. The 1st Cavalry Division transferred authority to the 3d Infantry Division in 

February 2005 and completed redeployment in April 2005. Dale points out that after a large drop 

in late 2004, early 2005, attacks steadily increased through the “surge.” See also Figure 10 for a 

graphical representation.

98. Christoff, 6 and 15. Although the direct correlation between essential services and 

violence exists outside the scope of this monograph, the GAO’s data shows that project completion 

helped decrease violence in early 2005. Violence escalated as the security situation deteriorated and 

Coalition Forces projects began to fail due to lack of maintenance.

99. Dale, 67-70. Dale provides a comprehensive outline of the Bush Administration’s “clear, 

hold, build” approach and language that led up to continued after the “surge.” Dale found most of 

his information in the White House Fact Sheet: “Strategy for Victory – Clear, Hold, Build” dated 

March 20, 2006.

100. Bianka J. Adams, Command Report, 2009 Multi-National Division Baghdad, 1st US 

Cavalry Division (Fort Hood, TX: Division Historian Publications, 2010), http://www.ndia.org/

Divisions/Divisions/SOLIC/Documents/Command_Report_12-10-10.pdf (accessed on January 25, 

2011), 7. Often called the Baghdad Security Plan, Operation FARDH AL QANOON displayed an 

offensive nature and established security sites and operating bases in the Iraqi community. Within 

the Baghdad area of operations, the Department of State embedded civilian-heavy PRTs with 

military units at the brigade level, ePRTs, and division level, PRT-B, to assist with humanitarian aid 

and reconstruction projects. See also Dale, 73-74.

101. Author’s Note: MNC-I forms the operational-level command under MNF-I so General 

Odierno already had intimate knowledge of the area and understood the inner-workings of General 

Petraeus’ plan.

102. Adams, 8. The Security Agreement’s Articles 4 and 22 took effect in January 1, 2009 and 

established the parameters within which the US forces could conduct operations.

103. Adams, 6.

104. Adams, 6 and 14. In February 2009, MND-B was an organization of six Brigade Combat 

Teams (BCTs) including 1st and 3d Brigade Combat Teams (BCT), 4th Infantry Division; 3rd BCT, 

82nd Airborne Division; 2nd Stryker Brigade Combat Team (SBCT), 25th Infantry Division; BCT, 

1st Infantry Division; and the 2nd BCT, 1st Armored Division. The 4th Combat Aviation Brigade 

provided air support.

105. Adams, 11. The Commander’s Intent published by Major General Bolger stated that MND-B 

would “[p]rotect the people of Baghdad – that’s why we’re here. Operating by, with, and through 

our Iraqi Security partners, we isolate the enemy (AQI, VE, others as designated) intimidating the 

people. Combined offensive operations provide the sustainable security that permits continued Iraqi 

political and economic growth. As Iraqi civil capacity expands our emphasis on stability operations 

increases proportionately. Throughout, we’ll fight to see Baghdad as it is: the people, the enemy, and 

our combined forces. Success equals the Baghdad population secure, the enemy resurgence denied, 

and our partnership with the Iraqis strengthened.”

106. Adams, 8. Adams provides a quote taken from OPORD 09-01A. The unit’s overview 

of mission, intent, and end state provided italics for emphasis in the original operations order. 

The commander’s intent stated that “[s]uccess equals the Baghdad population secure, the enemy 

resurgence denied, and our partnership with the Iraqis strengthened.” The end state envisioned the 

affirmation of GoI authority, increased local government capacity and the rule of law, open and fair 

elections, equitable access to essential services, and increasing and sustaining employment.
184

107. Adams, 34 and 47. This figure shows the author’s interpretation and summary of the 1st 

Cavalry’s Campaign Plan portrayed in the 2009 Command Report.

108. Adams, 12. The brigades supported the division’s capacity building efforts through 

Commanders’ Emergency Response Program funding critical projects.

109. Adams, 40-41. Based on MNF-I guidance to place PRT-B in the lead for actions within 

Baghdad Province, Colonel Timothy Parks, MND-B Chief of Staff, adopted a no-traditional staff 

structure consisting of centers, cells, and working groups to streamline the decision making process 

and connect actions with both PRT-B and Iraqi counterparts. There were four division centers, 

Current Operations, Future Operations, G5 Plans, and Assessments supported by four cells, Iraqi 

Security Forces Cell, Targeting, Civil Capacity, and Engagements.

110. Adams, 74.

111. Adams, 71.

112. Author’s Note: Rural government structures around Baghdad, Iraq started at the local 

level with Nahias. A Nahia equates roughly to a town or city council in the United States. The 

Nahias answered to the next level of rural government, the Qada. A Qada equates roughly to a 

District or county in the United States. Each Qada reported directly to the Governorate led by the 

Governor of Baghdad. The Amanat, or literally city hall, ran the metropolitan region of Baghdad 

as an equivalent to a national ministry. Baghdad Amanat approved and managed all operations and 

projects inside the city limits.

113.Adams, 40-41.

114. Adams. Based on MNF-I guidance to place PRT-B in the lead for actions within Baghdad 

Province, Colonel Timothy Parks, MND-B Chief of Staff, adopted a no-traditional staff structure 

consisting of centers, cells, and working groups to streamline the decision making process and 

connect actions with both PRT-B and Iraqi counterparts. There were four division centers, Current 

Operations, Future Operations, G5 Plans, and Assessments supported by four cells, Iraqi Security 

Forces Cell, Targeting, Civil Capacity, and Engagements.

115. Adams. 68. The GOI and the Coalition Forces had originally agreed on the new procedure 

in October 2008, but neither side had applied it.

116. Adams. In practice, it had an unintended side effect of slowing down projects which the 

BCTs wanted to perform because most projects now required Amanat, Governorate, or Ministerial 

approval. Iraqi project verification and approval could take weeks, if not months before an authorized 

official signed the approval documents.

117. Norris Jones, “Upgrading Baghdad Essential Services.” Iraq Reconstruction Report 

(December 2006). Baghdad, Iraq: United States Army Corps of Engineers, 2006, 2. In addition 

to taking too long for military units to execute, strategic level and long duration projects typically 

required more expertise than MND-B or its subordinate brigades could provide. Large scale project 

responsibilities shifted to entities such as the Iraqi Transition Assistance Office for the Department 

of State and the US Army Corps of Engineers (USACE) for the Department of Defense. The USACE 

International Zone office took over 150 projects worth $500 million to upgrade essential services in 

Baghdad.

118. Author’s Note: As mentioned earlier, the Department of State provided ePRTs to work 

with many of the brigades who owned important areas of operations. These ePRTs worked on 

important political and economic missions alongside the combat brigades and eventually took the 

lead on operations after the Security Agreement went into effect.
185

119. Adams, 71.

120. Adams, 78.

121. Adams, 7.

122. Adams, 67.

123. Special Inspector General for Iraq Reconstruction (SIGIR), “October 2010 Quarterly 

Report to Congress.” http://www.sigir.mil/publications/quarterlyreports/index.html (accessed on 

November 20, 2010), 20-22.

124. Dale, 137.

125. SIGIR, “October 2010 Quarterly Report to Congress,” 22.

126. The SWEAT/IR Book, 5.

127. US Department of State and US Department of Defense, “United States Government 

Integrated Civilian – Military Campaign Plan (ICMCP) for Support to Afghanistan – Revision 

1,” Kabul, Afghanistan: US Embassy Office, 2011. http://ccoportal.org/file/2238/download/3208 

(accessed on February 23, 2011), 4-8.

128. Pierson, 41. According to Captain Pierson’s outline, essential services fell under the 

Infrastructure, Services, and Economy line of effort. The essential services line of effort received 

direct inputs from the security, host-nation government capacity, and coalition capacity lines of 

effort. The essential services line of effort contributed directly to the influence of the narcotics 

industry and the balance of popular support for the host nation.

129. US Department of State and US Department of Defense, “ICMCP,” 32-33. According 

to the ICMCP, the new RC South Stabilization approach and operating framework utilizes the RC 

South Headquarters at Kandahar along with three Provincial Construction Teams (PRTs), 6 District 

Stabilization Teams (DSTs), and 12 Key Terrain Districts (KTDs) to cover a large portion of the 

south and central part of the country. 

130. Regional Command - South also has names such as Region Command - South, RC South, 

or RC(S) in different Afghanistan War documents. The 10th Mountain Division assumed command 

of the Regional Command – South area of operations in November 2010.

131. Regional Command - South. Figure 15 shows how the Factor-Precedence Model can 

integrate results from local reconnaissance, needs assessment, and factor refinement with existing 

products in Regional Command -South. Practitioners can monitor execution of projects just like RC 

South already does, then the practitioner can tie his or her assessment criteria into re-evaluation of 

local needs. Fusing the existing development plan with Factor-Precedence Model capabilities can 

increase sustainability with local leaders.

132. Regional Command - South. The author created this product to consolidate many of RCSouth’s ideas and tracking products into a generic example.

133. Special Inspector General for Afghanistan Reconstruction (SIGAR), “October 2010 

Quarterly Report to Congress,” http://www.sigar.mil/pdf/quarterlyreports/Oct2010/Lores/

SIGAR4Q_2010Book.pdf (accessed on November 20, 2010), 20.

134. SIGAR, 24.

135. SIGAR, 58, 82, 97-102.

136. Islamic Republic of Afghanistan, Afghanistan National Development Strategy (2008-

2013): A Strategy for Security, Governance, Economic Growth, and Poverty Reduction (Kabul, 

Afghanistan: Afghanistan National Development Strategy Secretariat, 2009), 10-15.
186

137. SIGAR, 97.

138. Robert Gates, “Landon Lecture Series Secretary of Defense Speech,” Kansas State 

University Landon Lecture (26 November 2007). Washington, DC: Office of the Assistant Secretary of 

Defense (Public Affairs), 2007, 1. http://www.defense.gov/Speeches/Speech.aspx?SpeechID=1199 

(accessed December 7, 2010).

139. Valentina Taddeo, “US Response to Terrorism: A Strategic Analysis of the Afghanistan 

Campaign,” Journal of Strategic Security, 3 (2010): 27-38. http://scholarcommons.usf.edu/cgi/

viewcontent.cgi?article=1010&context=jss (accessed January 25, 2011), 27.

140. Michael R. Lindeburg, Civil Engineering Reference Manual for the PE Exam, 11th Edition. 

Belmont, CA: Professional Publications, Inc. (PPI), 2008, Introduction.

141. FM 3-07, 1-20. Hybrid threats use a variety of approaches to fighting. According to the 

FM, the Second Lebanon War of 2006 highlighted hybrid warfare by Hezbollah against Israel. A key 

take-away, against outside the scope of this monograph, is that the restoration of essential services 

exists during major combat, counterinsurgency, or humanitarian assistance operations; therefore, the 

Factor-Precedence model could prove useful in situations other than counterinsurgency. 

142. Samuel Griffith, Mao Tse-Tung On Guerrilla Warfare (Baltimore, MD: The Nautical & 

Aviation Publishing Company of America, 1992), 71.

143. Kalev Sepp and John Nagl provide outlines of British efforts in Malaya, the history, and 

lessons learned. See Kalev Sepp, “Best Practices in Counterinsurgency.” Military Review (MayJune 2005): 10 for a conflict review and best practices. See also John A. Nagl, Learning to Eat Soup 

With a Knife: Counterinsurgency Lessons from Malaya and Vietnam. Chicago, IL: University of 

Chicago Press, 2005 for a comprehensive book on the conflict and French lessons learned.

144. Bertrand Valeyre and Alexandre Guerin, “From Galula to Petraeus: The French Legacy in 

the US Counterinsurgency Doctrine.” Cahier de la Recherché Doctrinale (Christine Valley, France: 

Centre de Doctrine d’Emploi des Forces (CDEF), 2010), 10-12; Galula, 89. Frenchmen Bertrand 

Valeyre, Alendre Guerin, and David Galula provide great information on France’s efforts in Algeria. 

Both books provided critical lessons information concerning the conflict along with French military 

and political lessons learned. 

145. Galula, 74.

146. Galula.

147. Andrew J. Birtle, US Army Counterinsurgency and Contingency Operations Doctrine 

1942-1976. Washington, DC: Center of Military History, 2007, 148. CMH outlines the history of 

recent US Counterinsurgency operations and doctrine. Throughout the book, it refers to guerillas in 

the same way modern doctrine refers to insurgents.

148. Birtle, 14.

149. Birtle, 291 and 299.

150. Birtle, 208-209.

151. A. J. Langguth, Our Vietnam: The War, 1954-1975 (New York, NY: Simon and Schuster, 

2000), 15; Jacob Kipp, “The Human Terrain System a CORDS for the 21st Century.” Military 

Review 86, no. 5 (September-October 2006): 8-15, 11. American stability and essential services 

operations in Vietnam played a large part in modern counterinsurgency operations. CORDS and 

HES became components of an effective pacification campaign that improved late-war situations 

but failed to overcome political pressure for withdrawal.
187

152. FM 3-24, 2-13.

153. SIGAR, 97.

154. Fullerton and Myers, 4-5.

155. Kilcullen, “Countering Global Insurgency,” Small Wars Journal (NOV 04), Richmond, 

VA: Small Wars Foundation LLC, 2004. Available at http://smallwarsjournal.com/documents/

kilcullen.pdf. Accessed on 20 NOV 10, 33.

156. SWEAT Smart Book, 1-33. Figure 18 shows the NTC SWEAT Smart Book’s digital cover. 

157. SWEAT Smart Book, 3.

158. SWEAT Smart Book, 109. The SWEAT Smart Book provides several measures of 

performance that compare the specified infrastructure category with generally acceptable levels of 

performance or output. 

159. Lindberg, et al, 2-33.

160. Lindberg, et al, 33.

161. The SWEAT/IR Book, 1-8. Because the USAES has deemed the technical contents and 

several images within this book Unclassified – For Official Use Only (FOUO), the author has 

limited the use of the use of this source. This monograph contains no FOUO information. Because 

the SWEAT/IR Book provides such utility in the field, practitioners can find digital copies of this 

document online or through the USAES.

162. FM 3-07, Figure 4-2, 4-11; see also FM 3-34.170, C-1.

163. FM 3-07, Figure 4-1, 4-10.

164. Author’s Note: Proposed in late 2010, the Factor-Precedence Model walks practitioners 

through geo-cultural screening of infrastructure categories then helps establish prioritization for 

execution.

165. Author’s Note: As outlined earlier, the Factor-Precedence Model is a way to develop 

reflection and prioritization on essential services restoration within the context of existing 

environments and tools.

166. Precedence Defined: See Appendix 1. The condition of being considered more important 

than someone or something else; priority in rank. The right to precede in order, rank, or importance; 

priority.

167. FM 5-0, 1-5 and C-7. Operational variables, PMESII-PT, and civil considerations, 

ASCOPE, represent tools that allow commanders to understand and visualize the battlefield. 

168. SWEAT Smart Book, 1-52. The book dedicates considerable time to providing a 

comprehensive outline of each essential services category. Each category had detailed descriptions, 

system explanations, and reconnaissance forms for practitioners. Table 7 provides a summary of 

key elements of reach category as they integrate into the Factor-Precedence Model. For additional 

information, see the SWEAT Smart Book. The SWEAT/IR Book also goes into considerable detail 

on each category.

169. Dan A Morrison, Geo-Cultural Analysis ToolTM (GCAT). Remarks and presentation 

delivered at the US DoD Modeling and Simulation (M&S) Conference in Orlando, FL on March 

10, 2008. Champagne, IL: US Army Research & Development Center (ERDC), 2008, 26. In 2008, 

ERDC proposed a complete Geo-Cultural Analysis Tool (GCAT) to “put people back into the 

picture, put socio-culture in its place on the map.”
188

170. Jeffrey Herbst, States and Power in Africa: Comparative Lessons in Authority and Control 

(Princeton, NJ: Princeton University Press, 2000), 45.

171. Hofstede, 21.

172. Maslow, 195; Malinowski, 23.

173. The Sphere Project, Humanitarian Charter and Minimum Standards in Disaster Response. 

(Oxford, England: Oxfam Publishing, 2004), 16.

174. Maslow, 195; see also Hofstede, 21.

175. Skinner, 1-26; see also Gorkowski, 45.

176. Kilcullen, 16.

177. SWEAT Smart Book, 3-5.

178. SWEAT Smart Book.

179. Skinner, 1-26; see also Gorkowski, 45.
189

Shari’a Compliant Finance

The Overlooked Element for Developing an Effective Financial System in 

Afghanistan

by

Lieutenant Colonel Jan Willem Maas - Royal Netherlands Army

Abstract

An effective financial system is essential to economic development. US Army doctrine 

acknowledges that military forces play an important role in supporting economic stabilization 

and infrastructure development. A specific task is to support the financial system. However, 

stability operations have not always been successful. First, Western stability operations 

have constrained economic development because the cultural paradigms of the Western 

actors and the local population have not fit. Second, segments of the Muslim community 

perceive Islamic banks as more reliable than other banks. Both reasons endanger the trust 

of Muslims in the financial system, which limits bank penetration and therefore hampers 

economic development.

This monograph argues that the application of Shari’a Compliant Finance (SCF) 

increases bank penetration and thereby improves economic development during stability 

operations in Afghanistan. Research found that Western organizations mainly used Western 

financial principles to develop the financial system in Afghanistan, while neglecting 

positive effects of SCF. The best way to apply SCF in order to improve the development of 

a financial system during stability operations is by facilitating local efforts that make use 

of religious reasoning and the social environment in order to gain and maintain subjective 

confidence. In order to mitigate the risk for sustainability of SCF on the longer term, 

international organizations like the World Bank and the IMF should maintain their focus 

on how to evolve a SCF system into a system that is still Shari’a compliant but also fulfills 

internationally recognized financial standards.

To support the development of a financial system successfully, commanders need to 

understand the implications of SCF. By appreciating and applying SCF, commanders can 

increase the trust of the population in their financial system resulting in increased bank 

penetration and economic development. This leads to five lessons for military commanders. 

The first lesson is that SCF is an alternative or at least a valuable complement for the 

development of a financial system in Afghanistan. The second lesson is that commanders 

should question and challenge the Western paradigm by a Muslim paradigm in order to 

prevent that the military commander develops a deficient operational approach. The third 

lesson is that the military has to invest in basic knowledge of the Afghan society, Islam, 

and SCF. The fourth lesson is that the military should start building partnerships with other 

organizations to enable unified action. The final lesson is that the military commander 

should focus on facilitating local efforts instead of providing a solution for the development 

of the financial system in order to achieve the maximum development results.
190

Introduction

According to the President of the Kauffman Foundation, a country can only have peace 

and prosperity when its people truly own their economy.1

US Army doctrine acknowledges that military forces play an important role in 

supporting economic stabilization and infrastructure development.2 A specific task is to 

support strengthening the local economy. This includes support of the financial system.3

 To 

be successful in supporting a financial system, commanders need a complete and thorough 

understanding of the operational environment.4

 Because Islamic finance is part of an Islamic 

society, it is important that commanders understand the implications of Shari’a compliant 

finance (SCF), especially when supporting the financial system in an Islamic country like 

Afghanistan. Understanding SCF can help to establish confidence of Muslims in their 

financial system in order to increase bank penetration and thereby improve economic 

development. Bank penetration is the percentage of firms or people in a specific area that 

use banks or other financial institutions to fulfill financial services.

Until recently, the international community did not even consider Islam when developing 

the economy in Afghanistan. For example, in a report of the World Bank published in 

December 2005 the World Bank assessed the investment climate in Afghanistan.5

 The 

World Bank published the report four years after the start of the stabilization operation in 

Afghanistan.6 They acknowledged the importance of an effective financial system and even 

stated that access to finance was severely constrained for companies. However, not once 

did the World Bank refer to SCF.7

 The negligence of SCF is probably one of the reasons 

why the World Bank and others developed in Afghanistan a financial system based solely 

on Western principles. Only in 2010 and 2011 did the Afghan legislature draft an Islamic 

banking law to enable SCF.8

The literature mentions two main reasons why the development of a Western 

financial system in an Islamic country is not successful. First, Western stability operations 

constrain economic development because Western development organizations and 

the local population have different cultural paradigms.9 This occurs because a segment 

of the Muslim population perceives conventional banks as un-Islamic because of the 

application of interest.10 In addition, conventional financial products do not fulfill the 

needs of the population because they are not Shari’a compliant.11 Second, a part of the 

Muslim community has no or very limited confidence in the imposed Western financial 

system because they believe that Islamic banks are more reliable and more stable than 

other banks.12 This monograph defines this kind of confidence as subjective confidence, 

which means the way Muslims, individually or as a group, perceive their confidence in the 

financial system. This is different from objective confidence. There is objective confidence 

when banks fulfill the internationally recognized standards for financial institutions. The 

disconnect between the Western and Islamic paradigm and the perceived reliability of 

Islamic banks constrains bank penetration and therefore endangers economic development.

By neglecting SCF during planning and execution, stability operations do not take into 

account the presumed positive effects of SCF as an alternative to economic development. 

A Malaysian study showed a positive correlation between Islamic banking and economic 
191

development.13 According to other literature, the Islamic financial system facilitates 

economic development because it promotes socio-economic goals: applying SCF promotes 

social justice, equity, poverty alleviation, and human well-being. By achieving these goals, 

SCF copes with financial and social exclusion and, therefore, increases the number of 

people that can benefit from economic growth.14

This monograph will argue that the application of SCF increases bank penetration 

and thereby improves economic development during stability operations in Afghanistan. 

Although some scientists claim that SCF products are only Islamic in form but not in 

content and SCF institutions have objective confidence shortcomings, the evidence will 

show that SCF improves subjective confidence and fulfills the needs of Muslims.

To substantiate this thesis, the monograph consists of five sections. The first section uses 

Afghanistan as a case study to determine the level of effectiveness of the Afghan financial 

system. The second section defines SCF and describes the sources, principles, products, 

and standards of SCF. The third section describes the possible ways SCF can facilitate the 

development of the formal financial system as claimed in predominantly Islamic literature. 

The fourth section applies elements of SCF to the financial system of Afghanistan. The fifth 

section describes the lessons military commanders at the operational level can learn when 

they support the development of a financial system in an Islamic society.

In order to conduct successful stability tasks, commanders must take into account that 

each country has its own unique characteristics that guide economic development.15 By 

understanding the implications of SCF, military efforts to support the development of a 

financial system can improve. Therefore, this monograph creates a nuanced and culturally 

sensitive solution, which will contribute to a successful result of a stability operation in an 

Islamic country such as Afghanistan.

Afghan Financial Development Results

This subsection reviews the development of the Afghan financial system as a 

contemporary example of developing a financial system during stability operations. This 

review shows that Western organizations developed the financial system in Afghanistan 

using mainly Western principles while neglecting the positive effects of SCF.

To provide a complete overview, this subsection will first describe the confidence 

necessary for the financial system to be effective. Second, this subsection will describe the 

major organizations and the ways in which they provided support for the development of 

the financial system. This subsection will conclude with the results of the development of 

the financial system in Afghanistan as assessed by the World Bank, as well as by the central 

Bank of Afghanistan, Da Afghanistan Bank (DAB). This provides an external and internal 

assessment of the Afghan financial system.

A financial system can only be effective if there is some degree of confidence in the 

financial system.16 However, confidence has both subjective and objective elements.17 It 

is subjective because it is up to the people to judge whether the system is reliable and 

whether they are willing to invest and deposit funds in the bank. If subjective confidence 

is low, people will avoid the formal financial system and local currency.18 On the other 
192

hand, confidence has an objective element that correlates to accountability according 

to internationally recognized standards. The World Bank emphasized the importance of 

accountability and transparency for a financial system.19 An effective financial system that 

satisfies both subjective and objective confidence helps to reduce risks and lowers the costs 

of financial transactions in order to facilitate sustainable economic development.

The first organization that supported Afghanistan was the World Bank. They provided 

technical assistance for the development of the infrastructure and the capacity of the 

DAB. The World Bank also provided assistance to implement changes in the financial 

sector. They assisted in improving human resource management, accounting and auditing, 

and in developing a system to supervise commercial banks according to international 

standards. An additional task was to improve credit risk assessments in order to reduce 

risk and increase credit based lending. Finally, the World Bank assisted the DAB and the 

Afghanistan Bank Association in the development of bankers training.20 These programs 

focused on improving the efficiency and reliability of the banking system based on Western 

standards.

The second organization to offer support to Afghanistan was the International 

Monetary Fund (IMF). They provided assistance with currency reform, central bank 

modernization, and new financial and banking legislation.21 Additionally, an IMF staff team 

assisted the authorities in developing “a macroeconomic framework to guide economic 

decision-making” in order to achieve sustainable economic growth.22 In 2003, the IMF 

prepared new banking and central bank laws, new payment laws, currency laws, and 

financial services laws.23 The IMF also provided technical assistance for the organization, 

accounting, financial reporting, internal auditing, and an appropriate central bank facility.24

The IMF also based their support on Western standards.

The third organization that provided support was the United States Agency for 

International Development (USAID). They focused on four main areas within the financial 

sector: central bank oversight, retail banking, small and medium enterprise finance, and 

microfinance. USAID also provided advice on how to implement on-site examinations of 

commercial banks using trend analysis and methods to bring the accounting system in line 

with internationally recognized standards. To develop retail banking and small and medium 

enterprise finance, USAID assisted in the enactment of financial laws and regulations. To 

facilitate growth of small and medium enterprises, USAID supported the bank’s ability to 

provide loans to these enterprises. As part of microfinance, USAID programs also provided 

capital and technical assistance in order to facilitate the banking system and to develop 

Shari’a compliant loans and transactions.25

With assistance from the World Bank, IMF, and USAID, the government of the 

Islamic Republic of Afghanistan enacted the DAB Law of 2003. By implementing this law, 

Afghanistan created an autonomous central bank for Afghanistan.26 Its tasks, as formulated 

in Article 2 of DAB Law, are in line with the five internationally recognized standards 

for a proper functioning central bank. These tasks are control over the local network of 

banking services or banks, the pursuit of price stability, the facilitation of a stable system 

of payments, the ability to provide independent economic advice to the government, and 
193

the capability to ensure that commercial banks have sufficient financial funds to meet 

their obligations. According to USAID, DAB accounting and reporting in 2009 and 

2010 remains consistent with International Financial Reporting Standards, as prescribed 

by the International Accounting Standards Board. Therefore, DAB formally fulfills the 

international recognized standards for a central bank and achieves objective confidence. 

Bank penetration and subjective confidence in the financial system in Afghanistan and 

its region is inadequate. According to the Enterprise Analysis Unit of the World Bank, 

only 3.4 percent of the firms have a line of credit with a financial institution compared to 

8.6 percent in Pakistan and 10.5 percent in Uzbekistan. Among all firms in Afghanistan, 

91.6 percent use internal means to finance working capital. In Pakistan, Tajikistan and 

Uzbekistan it is respectively 86.3 percent, 90.0 percent, and 94.4 percent. Only 1 percent 

of the Afghan firms use banks to finance working capital, against 1.6 percent in Pakistan, 

1.3 percent in Tajikistan, and 3.6 percent in Uzbekistan. If a firm in Afghanistan needs a 

loan, collateral requirements equal 254 percent of the loan. That is almost twice the average 

percentage of Tajikistan. Finally, 36.6 percent of the businesses identify access to finance 

as a major constraint, while the next highest score is only 17.7 in Pakistan (see Table 1). 

Although the figures show similarities among the four nations, Afghanistan has the lowest 

level of bank penetration.

Table 1: Bank Penetration in Afghan Region

Afghanistan 

(2008)

P a k i s t a n 

(2007)

Tajikistan 

(2005)

Uzbekistan 

(2005) % of firms that have a line of credit with 

or loans from financial institution

3.4 8.6 - 10.5

% of firms using internal financed 

working capital 91.6 86.3 90.0 94.4

% of firms using banks to finance 

working capital 1.0 1.6 1.3 3.6

% of firms using supplier/customer 

credit to finance working capital 3.7 11.9 5.0 1.0

% of firms using other means to finance 

working capital 3.7 0.2 3.7 1.0

Value of collateral as % of loan

253.5 67.7 145.2 122.2

% of firms who identify finance as a 

major constraint 36.6 17.7 4.4 11.6

Source: World Bank, “Enterprise Surveys,” https://www.enterprisesurveys.org/CustomQuery/ Indicators.as

px?characteristic=size&indicator=51 (accessed 14 August 2011).

The World Bank described an inadequate level of bank penetration and subjective 

confidence in the formal financial system of Afghanistan. The local Afghan reports of the 

DAB describe a different perspective. The DAB confirms in its Strategic Plan 2009–2014 
194

the problem concerning bank penetration in Afghanistan.27 According to the DAB, there is 

still a vast number of people, potential entrepreneurs, and small enterprises excluded from 

the services of the financial system in Afghanistan. Although the DAB does not quantify 

the problem, the bank confirms that a substantial number of firms are dependent on an 

informal financial system, like internal ways to finance investments and working capital. 

This constrains the possibilities for economic growth because capital for expansion is 

limited.28 The DAB acknowledges the importance of an effective financial system and 

formulates the objectives in the strategic plan to promote possibilities for savings, access to 

credit, and the development of the necessary financial institutions.29 The DAB specifically 

mentions the importance of accountability and transparency of the financial system to give 

customers, investors, and entrepreneur’s confidence in the system.30

Although the World Bank and the Strategic Plan describe the problems concerning 

bank penetration, the annual financial report 2008–2009 of the DAB describes a slightly 

different perspective. The total amount of assets of the Afghan banking system increased 

by 73.4 percent from March 2008 until March 2009. According to the DAB, this is a sign of 

increased confidence in the Afghan financial system. The total amount of loans increased 

over the same period by 25 percent and the deposits increased by 86 percent.31 However, it 

is not clear whether there is a correlation between the increase of assets, loans, and deposits 

and increased bank penetration and confidence. First, the return on assets decreased from 

1.8 percent to 1.7 percent.32 That means that the financial system was less profitable. Based 

on efficiency, one would expect an increase in profitability when more people use the 

formal financial system. Second, the DAB does not provide any insight in the amount of 

individual accounts. This means that it is not possible to estimate whether more people or 

firms used the formal financial system. It only shows an increased value of assets, loans, 

and deposits. Third, half of the deposits are in US Dollars.33 This means that local currency 

is still not very popular and could indicate a lack of confidence in the financial system 

and limited bank penetration.34 It is therefore unlikely that there is an increase in bank 

penetration and confidence in the Afghan financial system.

Afghanistan received considerable support from very capable financial and 

development organizations to develop its financial system. However, all three organizations 

used Western principles to support the development of the Afghan financial system. This 

support led to objective confidence in the financial system, because the financial system 

fulfilled the internationally recognized financial standards. However, the support did not 

secure subjective confidence. Based on data of the World Bank and the DAB, it is justified 

to conclude that bank penetration and subjective confidence is still extremely low.

Shari’a Compliant Finance

Muslims claim SCF is a valuable alternative to conventional banking.35 Although 

the literature mentions the Igibi Bank of Babylon in 575 BC as one of the first Islamic banks, 

the modern Islamic banking sector is a rather young industry.36 Modern Islamic finance 

has existed since 1970.37 In addition, the first all-embracing Islamic bank was the Dubai 

Islamic Bank, established in 1975.38 Since then, the Islamic financial sector has grown 

enormously. According to a report by Standard and Poor’s, Islamic bank assets increased 
195

from $639 billion in 2008 to $822 billion in 2009, a total increase of 28.6 percent.39 Despite 

the Islamic claims and the growth of the industry, it is not clear what Islamic finance 

encompasses. Therefore, this section defines SCF – its sources, principles, products, and 

standards – to create an understanding of the concepts of SCF. This will enable the reader 

to understand the latter parts in this monograph.

Definition of SCF

There is no precise definition of SCF. Therefore, this monograph will delineate its 

own definition and starts with a short literature review of SCF definitions. Defining SCF 

as interest free banking is an example of a narrow definition, while describing SCF as a 

financial operation conducted by Muslims is too broad.40 However, there are definitions 

that are more concise. The first defines SCF as a financial system based on the principles 

of the Quran.

41 Although not very detailed, this definition creates a distinction between a 

conventional or Western financial system and SCF. Other scholars define SCF as “a system 

that adheres strictly to the rulings of Shari’a in the fields of finance and other dealings.”42

This definition expands it to issues other than financial products. A more comprehensive 

definition of SCF is:

A non-interest based financial institution, which complies fully with Islamic laws 

and has creative and progressive financial engineering to offer efficient and competitive 

banking, investment, trade finance, commercial, and real estate financing services.43

This definition encompasses not only the application of Islamic laws but also refers to 

non-interest based finance as a basic principle of SCF. By mentioning progressive financial 

engineering, the definition seems to recognize the essential balance between the conformity 

with Islam and the financial needs of Muslims. A final example of a definition of SCF is 

a financial system that executes finance in consonance with the ethos of Islam and which 

is governed by Shari’a principles.44 This definition perfectly describes the intent of SCF.

This monograph defines SCF as a financial system based on Islamic principles and 

values that offers Muslims a possibility to fulfill their financial needs within the limits of 

Islam. For further clarification of this definition, values are the beliefs people have about 

what is right and wrong, what is most important in life, and which control their behavior.45

The following sections describe the sources, principles, and products of SCF in order to put 

this definition into perspective.

Sources of SCF

The basis of Islam is that the individual obeys the rules of Shari’a because the 

individual has an agreement or contract with Allah. The rules describe unity and oneness 

on earth as well as in the hereafter. By obeying the rules, men establish social unity and 

cohesion. According to the Islam, all conduct contrary to Shari’a leads to disunity and 

disintegration. Final judgment before Allah is as an individual as well as a part of the 

collective.46 Therefore, there is an individual as well as a collective motivation to adhere 

to the rules of Shari’a. Although Islam has primary and secondary sources, there are also 

some major differences between the implementation of Islam because of different schools 

of thought, movements, and regional customs.
196

Islamic law has three primary sources and three secondary sources. A pyramid is an 

allegory for the primary and secondary sources. The first primary source, at the top of 

the pyramid, is the Quran. According to Muslims, this is the Holy Book, the word of 

God as conveyed to the Prophet Mohammed.47 The second layer from the top consists of 

the Hadith and the Sunna, both primary sources. The Hadith are short texts and refer to 

the words and deeds of the Prophet Mohammed.48 The Sunna explains and analyzes the 

Quran as well as the Hadith and consists of the practices and rulings deduced from the 

Quran and the Hadith.

49 The third layer of the pyramid consists of secondary sources. 

These sources are Ijtihad, Ijma, and Qiyas.Ijtihad refers to the activities of legal scholars to 

find solutions for emerging problems in a society where the Quran, the Hadith, and Sunna

do not provide a solution. Ijma and Qiyas are the ways legal scholars exercise Ijtihad.

50

Ijma refers to problem solving by consensus. Muslims believe that consensus by a group of 

legal scholars in a certain society prevents men from failures to make the right decisions. 

Qiyas provides solutions by analogy or logical inference when the other sources such as 

the Quran, the Hadith, Sunna, and Ijma do not provide a workable solution for a problem. 

The legal scholars try to determine how the Prophet Mohammed would have acted in a 

specific case.51

SCF Principles

According to Islamic law, Allah created the universe and controls it. To control life on 

earth, Allah delegated stewardship to men. However, Allah also realized that humans are 

not without faults. Therefore, Allah provided rules and guidance to men in every part of 

their life. Because of the contract between Allah and men, men must obey these rules even 

when these rules go against their personal interests, because adhering to the rules is in the 

public’s interest. Applying the rules brings unity and social cohesion because they take the 

welfare and well-being of others specifically into account.52

The pursuit of unity, cohesion, and the well-being of others is also visible in the four 

main SCF principles. The first principle is the ban on Riba, an amount of money that a 

borrower must pay to a lender for the use of money and for which the rate is determined 

beforehand. Islam considers Riba as a form of excess. According to some Muslim 

scientists, the Quran forbids Riba because it enslaves the debtor.53 Other scientists argue 

that the Quran only forbids excessive Riba. The Quran only forbids charging interest when 

it brings injustice.54 The reality is that most Muslims feel uncomfortable when charging 

or receiving interest. Secondly, money is not an asset in its own right; it is a means to 

exchange goods. Tangible assets must always back money.55 This prevents the growth of 

debt and, therefore, social injustice. The third principle is the avoidance of Gharar, failure 

to disclose information needed to make a decision. The avoidance of Gharar means that 

people must avoid every uncertainty or ambiguity when they trade.56 The fourth principle, 

Haram, refers to investments that should enhance society. The Quran prohibits consuming 

goods or services such as alcohol, pornography, gambling, and products made of pork.57

All these principles promote the social unity and cohesion within Islamic societies.
197

SCF Products

To pursue social unity, cohesion, and the well-being of others, SCF created some very 

specific SCF products. The SCF products of Mudarabah, Musharaka, and Murabaha are 

not the only SCF products but they are the most common. These SCF products also show 

how previously mentioned principles work in SCF. Mudarabah and Musharaka are two 

profit-and-loss sharing (PLS) products. Murabaha is an example of how banks can offer 

financial products despite the ban on Riba (interest). Mudarabah is a financial construction 

based on profit sharing. Within this construction, the bank provides money and the borrower 

or, more specifically, the entrepreneur does the work. The bank and the entrepreneur share 

the profit based on a pre-determined ratio. The profit sharing continues as long as there is 

a debt. When the entrepreneur has repaid the debt, the profit sharing ceases. In the event 

that the entrepreneur goes bankrupt, the bank shoulders the costs. No one compensates the 

bank for its losses.58 Musharaka is similar, although, in this construction, the bank as well 

as the entrepreneur shares the losses in proportion to their investment of finances and work. 

The bank and the entrepreneur determine the ratio in advance. Musharaka is an example 

of PLS.59Murabaha is an example how to deal with the ban on Riba in SCF. Murabaha is a 

financial construction in which the bank buys goods and services for the borrower. In this 

way, the bank does not officially lend money to the borrower; the bank makes a profit on 

the investment by marking up the prices of the goods or services. Therefore, the borrower 

has to repay more than the initial costs of the bank’s purchase.60

Standards of SCF

Three main organizations set the standards and safeguard Shari’a character of SCF. 

The first organization is the Islamic Financial Services Board (IFSB). In 2002, the IMF 

assisted in founding the IFSB. Its task is supervision and regulation of SCF. Its goal 

is to complement the work of the Basel Committee on Bank Supervision, which is the 

organization that sets the standards for internationally recognized banking standards.61 The 

second organization is the Accounting and Auditing Organization for Islamic Financial 

Institutions (AAOIFI). This organization focuses on accounting, auditing, solvency, and 

the application of Shari’a. The AAOIFI issues certifications for SCF institutions and has 

a Shari’a board that tries to unify all the rulings of the individual Shari’a boards.62 The 

AAOIFI and IFSB are overarching organizations that concentrate on setting the standards 

for SCF. However, banks do not universally apply those standards and the organizations 

have no power to enforce the standards.63 The third organization is the Shari’a Supervisory 

Board (SSB) of each individual bank. These boards consist of at least three Islamic scholars 

who direct, review, and supervise the activities of the Islamic financial institution in order to 

ensure Shari’a compliance.64 These boards can issue Fatwas to declare financial products 

are Shari’a compliant. 

This subsection described the way in which SCF conducts business within the SCF 

principles and manages the ban on Riba. This subsection also described the way in which 

the Islamic financial system ensures Shari’a compliance within the financial system. The 

SCF products are logical from an Islamic perspective and fit the SCF principles. This 
198

does not automatically mean that SCF also improves bank penetration. The following 

subsection will therefore describe how, according to Islamic literature, SCF can improve 

bank penetration.

Islamic Proposed Ways to Facilitate Bank Penetration

The function of a financial system is to reduce the risk for investors and to create 

financial possibilities for entrepreneurs, regardless of whether the financial system is based 

on religious principles.65 This subsection describes the possible ways for SCF to facilitate 

bank penetration in order to bring investors and entrepreneurs together within the financial 

system.66 According to the literature, SCF has at least four positive ways to facilitate bank 

penetration. First, SCF establishes just and equitable distribution of resources. Second, 

SCF fulfills the specific financial needs of Muslims. Third, SCF is more reliable compared 

to conventional financial systems. Finally, SCF development depends, for its development, 

less on a well-functioning rule of law than a conventional financial system.

SCF focuses on just and equitable distribution of resources. The primary focus of 

SCF is not profit maximization but to enable Muslims to conduct financial transactions in 

adherence to Shari’a.

67 SCF is a welfare system, which focuses on economic development 

in order to facilitate societal benefits such as just and equitable distribution of resources. 

The evidence for this statement is the use of PLS and the ban on Riba instead of focus on 

profit maximization like conventional financial systems.68 A study conducted in Pakistan 

confirms the welfare aspect of SCF and its contributions to economic development 

for society as a whole. The research also found that SCF contributes to a higher level 

of customer satisfaction because of these effects. Therefore, an increased satisfaction 

of customers contributes to a higher bank penetration.69 According to the United States 

Institute of Peace, this means that SCF should be more tolerant of low-income customers 

and should be prepared to take more risks to provide these customers the financial assets 

they need.70 By applying SCF, Islam creates cohesion and social unity as described in the 

Quran. According to Muslims Islam is a comprehensive and all-encompassing system that 

focuses on sustainable, ethical, and socially responsible behavior on earth as well as in the 

hereafter.71

SCF fulfills the specific financial needs of Muslims. The fact that financial institutions 

offer SCF can increase bank penetration for Muslims. There will always be Muslims who 

do not want to participate in a financial system, which is not Shari’a compliant.72 The 

application of SCF for religious reasons can be that single, important incentive to attract 

Muslims to the formal financial system in a country.73 The government of Turkey provided 

an example when they used SCF in 1983 to attract people to the formal financial system.74

Although Turkey focused on taming the effects on political Islamists, it shows that emotion 

can be a reason to use a formal banking system even in a secular state like Turkey. To 

offer SCF in order to attract Muslims to the formal financial system and increase bank 

penetration seems even more important in non-secular societies. Afghanistan is an example 

of a non-secular state. The Director General of the Financial Supervision Department of the 

Afghan Central Bank, Da Afghanistan Bank (DAB) iterates that the most important reason 

for Afghans not to participate in the formal banking system is that the financial system is 
199

not Shari’a compliant.75 Applying SCF can increase bank penetration among Muslims and 

therefore improve economic development. The application of SCF can therefore enhance 

accessibility in a larger area and for a larger group of people that would normally exclude 

themselves, from a formal non-Shari’a compliant financial system.

SCF is more reliable compared to conventional banking for three reasons. The first 

reason is that SCF is based on PLS. As mentioned previously, the function of the financial 

system is to reduce risk for investors and to create financial possibilities for entrepreneurs.76

PLS means that a depositor of money shares in the profit as well as in the losses of the 

financial institution. Therefore, the financial institution is not the only one that runs the 

risk when investing money. A SCF institution has less risk for insolvency and can be more 

reliable than a conventional financial institution.77 A prerequisite for the depositor is that 

he has access to information to make a reasonable estimate of his risk.78 Although PLS can 

definitely enhance bank penetration, PLS requires a fine balance between the risk for the 

financial institution and the depositor.79 When balance of risk is too heavily shifted to the 

depositor, the flow of money available for investments will decline. This will constrain 

economic development, especially during stability operations.

The second reason is that SCF is asset backed. This means that tangible goods always 

back money. A legal right, such as a loan is therefore not enough to back money. As a result, 

the growth of the total amount of money is limited, as well as the total amount of debt and 

inflation.80 Therefore, asset backed money has a positive effect on economic development 

and on social justice within society.81

The third reason is that SCF systems have a rigorous method of self-regulation. The 

literature refers to the SSB’s of each individual bank in conjunction with the Islamic 

paradigm concerning social behavior. These supervisory boards direct, review and 

supervise the activities of the Islamic financial institutions in order to ensure sound Shari’a

compliant finance.82 Because the paradigm of Islam is that the financial system should be 

sustainable and ethical, Muslims expect SCF to strengthen internal control of the financial 

system and therefore facilitate sustainability and reliability of the SCF system.83

SCF depends less on a well-functioning rule of law than a conventional financial system. 

Research conducted in low-income countries, stated that there is a positive correlation 

between presence of rule of law and development of financial institutions. The rule of law 

protects the rights of people and therefore limits the costs of doing business. The availability 

of rule of law therefore enhances the efficiency of the financial system.84 However, other 

research found that Islamic banks depend less on the quality of institutions that facilitate 

rule of law.85 It highlights a different influence of the rule of law on Islamic banks. The 

main reason for the limited dependency on rule of law is the strict application of Shari’a

law. This prevents people’s dependence solely on the formal judicial system to protect their 

rights. Muslim scholars or clerks settle disputes.86 Therefore, Islamic banks do not depend 

as much as conventional financial institutions on the availability of a well-functioning rule 

of law. This should have a positive influence on the level of bank penetration in developing 

countries where rule of law is often lacking or insufficient.
200

Application of SCF in Afghanistan

So far, this monograph has described the current effectiveness of the Afghan financial 

system. The analysis of the development of the Afghan financial system showed that the 

World Bank, IMF and USAID mainly applied Western financial principles and neglected 

SCF as an alternative or complementary system to facilitate bank penetration. The literature 

provided examples of the positive effects of SCF to facilitate bank penetration. The current 

section focuses on the effectiveness of the application of SCF for the specific situation in 

Afghanistan. The question is whether the application of SCF could have improved bank 

penetration in Afghanistan.

The first subsection analyzes whether the application of SCF would attract enough 

Muslims to make a difference in facilitating bank penetration. Because SCF is inseparably 

linked to Shari’a, the second subsection analyzes the reasons for Muslims to select SCF. 

The third subsection analyzes whether SCF is reliable in order to increase bank penetration 

in Afghanistan. The fourth subsection will do the same for sustainability. The fifth 

subsection analyzes whether applying SCF will actually improve the development of the 

financial system because SCF depends less on conventional financial institutions as on the 

availability of a well-functioning rule of law. This section will end with a conclusion.

Quantitative Preference for SCF

According to Islamic law, applying Islamic rules brings unity and social cohesion 

because it creates welfare and well-being for others. 87 This implies that there should be a 

relatively large number of Muslims who prefer SCF over a conventional financial system 

in order to adhere to the contract between Allah and men. Therefore, religious reasons 

should be one of the most important reasons to choose SCF. This subsection analyzes the 

percentage of Muslims that choose to use SCF to fulfill their financial needs.

The monograph uses the results of the analysis to determine the percentage of Muslims 

in Afghanistan that would prefer SCF because there is no specific data for Afghanistan. In 

addition, every research has its own focus. It is also difficult to exclude external factors that 

influence the choice of Muslims who prefer SCF. These external factors can be poverty, 

availability of infrastructure, knowledge of SCF, or differences between secular and nonsecular societies.

To estimate the potential size of the group of Muslims that prefers SCF in Afghanistan, 

this subsection uses research conducted in Central Java and Yogyakarta, as part of the 

Republic of Indonesia, Syrian Arab Republic (Syria), West Bank and Gaza Strip as part 

of the Palestinian territories, Pakistan, and Yemen. In order to extrapolate the results to 

Afghanistan, all countries have a similar percentage of Muslims in their population as 

Afghanistan. The percentage of Muslims ranges between 92 percent in Syria and 99.7 

percent in Afghanistan.88

Research conducted by The Indonesia Bank and the University of Semarang in 2000 

in Central Java and Yogyakarta showed that 48.3 percent of the Muslim population would 

choose SCF because they perceived interest as forbidden within Islamic Law.89 In July 

2008, the World Bank conducted a microfinance market assessment in Syria and found that 
201

43.2 percent of the population only wanted to use SCF because they perceived conventional 

banking as incompatible with Islamic law.90 It is difficult to determine how the lack of 

knowledge of financial services influences choice, because research also pointed out that 

20.9 percent were not aware of the possibilities to acquire loans from a formal financial 

system like a bank.91 In May 2007, the World Bank conducted a survey on the West Bank 

and in Gaza Strip.92 Research showed that 55 percent of the entrepreneurs on the West 

Bank and 61 percent in Gaza Strip would choose SCF if they had had a choice.93 In 2010, 

research in Pakistan found that 52.6 percent of the population preferred SCF as their way to 

fulfill financial services. At the same time awareness of different SCF products ranged from 

13.5 percent to 66.7 percent.94 The conclusion was that SCF has an enormous potential for 

further development. However, SCF institutions have to improve awareness among their 

customers.95 Research conducted in Yemen estimated that 40 percent of the population in 

Yemen preferred SCF, even if it were more expensive than conventional financial services.

96 However, the expectation is that, based on research in Syria and Pakistan, awareness of 

SCF among the population of Yemen is relatively low.

Based on the aforementioned research (see Table 2), between 40 and 61 percent of 

the population of the countries surveyed prefer SCF if they have a choice. It is therefore 

reasonable to conclude that, based on extrapolation, at least 50 percent of the Muslims in 

Afghanistan should have a strong preference for SCF. At the same time, research pointed 

out that awareness of SCF products is in some cases low. Therefore, the percentage of 

a preference for SCF can increase when financial institutions inform people about the 

possibilities of SCF.

When 50 percent of the people prefer SCF, it is reasonable to conclude that a substantial 

part of the population chooses SCF. In addition, this percentage could be even higher if the 

population has enough knowledge and information about SCF to make a choice. However, 

the percentage of Muslims choosing SCF does not give any insight into the actual reasons 

for choosing SCF. The next subsection will analyze whether religion is an important 

selection criterion or whether there are other reasons to choose SCF.

Table 2: Quantitative Preference for SCF

Java Syria W e s t 

Bank

G a z a 

Strip

Pakistan Yemen

Percentage 

of Muslims 

p r e f e r r i n g 

SCF

48.3 43.2 55 61 52.6 40

Source: See footnotes in the text.

Qualitative Preference for SCF

It is also important to know why Muslims choose SCF. As explained earlier, Islamic 

literature links the characteristics of SCF to Islam and states that it promotes unity and 

social cohesion; SCF fulfills the needs of the people and, therefore, facilitates bank 

penetration. This subsection analyzes the reasons why Muslims choose SCF. The analysis 

uses international research conducted in Kuwait, Libya, Jordan, Bangladesh, Malaysia, and 

Pakistan.
202

The most frequently mentioned reason in the literature to choose SCF is the fact that 

the conventional financial system is un-Islamic because of the application of interest. This 

refers to the ban on Riba as explained in this monograph.97 The reference to the ban on 

interest is a misperception because the statement neglects the interpretation possibilities 

within SCF as conducted by the SSB of each individual bank. If the SSB does not 

interpret the interest as excessive, they can issue a fatwa to declare a financial product 

Shari’a compliant. Although it is not a broad interpretation of Shari’a, it is a legitimate 

interpretation.98

Local circumstances can differ and each research has its own focus. However, there are 

some similarities for the reasons why Muslims choose SCF. Research in Kuwait found that 

reliability of the financial institutions and the diversity of services were the most important 

reasons to choose a financial institution. SCF principles and products were only fifth on the 

list of the selection criteria. The research also stated that the population of Kuwait is multibank users. They use the financial institution that best fulfills their needs. Religion is not an 

important selection criterion in Kuwait. 99 It is important to mention that Kuwait deviates 

from the rest of the countries because the average income of Kuwaitis is considerably 

higher.

A survey conducted in 2007 and 2008 in Libya showed that the most important 

reason to choose SCF was that entrepreneurs perceived more encouragement for business 

expansion and the willingness of SCF institutions to share risk with them. Interest free 

banking provided less motivation for Libyan entrepreneurs.100 This research indicates an 

opposite effect compared to the Kuwait research. It also seems to indicate that perception 

of SCF is more important than facts. Not statistical evidence, but personal opinions of the 

entrepreneurs were the most important source of the research.

Research conducted in Jordan found four main reasons for choosing SCF. The first 

reason was the profitability of the bank. Although this can refer to PLS between banks and 

depositors, it can also refer to reliability and sustainability. The research does not clarify this 

issue. The second reason was the influence of friends and relatives. The third reason was 

religion and the fourth reason was the image and reputation of the financial institution.101 It 

is not clear whether the fourth reason refers to the marketing image of a financial institution, 

the religious image, or the reliability and sustainability of the institution. The research also 

does not prioritize the reasons, but there is more emphasis on religion and social aspects 

such as peer influence.102

Research in Bangladesh found three main reasons why people in Bangladesh choose 

SCF. The first and most important reason was that the bank follows the SCF principles as 

described in this monograph. The second reason was that a bank should be at a convenient 

location for the customer. The third reason was the influence of family and friends.103 This 

research provides a similar perspective as the research conducted in Jordan. Religion is 

an important reason and family and friends influence others when choosing a financial 

institution.

A study conducted in Pakistan in 2010 analyzed bank customers’ behavior. Research 

found four main reasons why people chose SCF. The first reason was adherence to Islamic 
203

principles. The second reason was the influence of family and friends. The third reason was 

the profitability of the bank and the last reason was easy access to the bank.104 This research 

supports the results in Jordan and Bangladesh. Religion and the adherence to the Islamic 

principles are the most important reasons to choose SCF. The next important reason is the 

influence of family and friends. Profitability is the third, and convenience last.

The studies show that most of the arguments are based on subjective confidence of 

Muslims in the SCF system, because facts are hardly mentioned or taken into consideration 

to determine the preferences. The studies also confirm the importance of religion and social 

influences in the way in which Muslims choose their financial institution. Because most 

of the studies focused on perception and not on facts, the results show the importance 

of subjective confidence that people have in a system. Religion and social influence 

are important factors for selection. Because only SCF can provide financial services in 

accordance with Shari’a, SCF is an important way to fulfill the needs of Muslims. This 

knowledge creates opportunities to attract Muslims towards the formal financial system in 

Afghanistan.

Reliability of SCF

Reliability of SCF is the perception of people to trust SCF because the system behaves 

and works in the way people expect it to behave.105 Perception facilitates subjective 

confidence. Reliability has a major influence on the success of SCF. An example is the 

success of the Hawala system, a system based on honor and trust. In the absence of a formal 

financial system, money exchange dealers provide a well-organized, reliable, convenient, 

safe, and cost-effective means of making international and domestic payments.106 Because 

the Afghans lacked a formal banking system for a very long time, they relied solely on this 

informal system for their financial needs.107

In the first place, reliability is primarily a subjective value judgment of the financial 

system, based on an individual’s thoughts and observations. Reliability judgment is 

therefore closely linked to the two previous subsections. When at least 50 percent of the 

Muslims prefer SCF, and religious reasons and peer influence are the most important 

reasons to select SCF, it is an indicator that Muslims perceive SCF as reliable. It does not 

mean that bankruptcy of the Kabul Bank because of corruption did not damage trust in the 

financial system in Afghanistan.108 However, bankruptcy and corruption are not restricted 

to Islam.

The second reason why Afghans perceive SCF as reliable refers to the growing demand 

for SCF.109 Although this is an implied conclusion, growing demand implies the perception 

that the system will act and behave as customers expect. The DAB, as well as the Afghan 

government, recognized this trend, enacted an Islamic Banking Law in 2010, and prepared 

the financial system to offer SCF. In addition, the reliability of SCF is stronger in nonsecular societies because of the tight link between state, society, and religion.110 Research 

also found that smaller firms with less business experience, smaller assets and employees, 

fewer owners, and less outstanding debts, are more willing to use SCF to fulfill their 

financial needs.111
204

The factor that could constrain reliability is the existence of the SSB.112 Because each 

financial institution has its own religious board, there is no uniformity in its financial 

products and control mechanisms.113 Because the interpretation of Shari’a differs, it 

increases uncertainty and therefore decreases the reliability of SCF products and control 

mechanisms at the macro level.114 Sometimes financial institutions do not even accept 

each other’s SCF products. This could further constrain objective confidence because the 

financial institutions do not completely fulfill the internationally recognized standards for 

banks anymore. At the same time, a SSB can increase reliability. Especially in Afghanistan, 

where the formal financial system was destroyed, a Fatwa of the SSB can persuade people 

to participate in SCF and strengthen bank penetration. Therefore, SCF can transform a 

disadvantage into an advantage in Afghanistan.

To conclude, reliability is an expression of subjective confidence and is important 

for increasing bank penetration. The experience with the Hawala system, the growing 

demand for SCF, the religious nature of Afghan society, and the smaller firms that require 

finance and feel attracted to SCF all support the conclusion that applying SCF will increase 

subjective confidence and therefore will increase bank penetration, although the influence 

of the different Islamic interpretations could constrain reliability. The question whether 

this also restricts the sustainability of SCF in Afghanistan will be the subject of the next 

subsection.

Sustainability of SCF

Sustainability of SCF in Afghanistan is the ability to continue the system over a longer 

period of time.115 To estimate the sustainability of an Afghan SCF system, this subsection 

describes the Afghan consequences for the application of PLS and asset backed finances. 

This subsection also describes the specific challenges in Afghanistan that constrain the 

sustainability of an SCF system.

PLS requires a fine balance of risk between the lender and the financial institution. 

However, when SCF applies PLS in a strict Islamic manner, borrowers are only interested 

in PLS when the risk of the enterprise is high because that creates the need to mitigate the 

negative financial effects of risk. If the borrower has a positive expectation, the conventional 

financial system that has fixed interest rates is more profitable for the borrower.116 This 

requires exchange of information among borrower, financial institution, and lender in 

order to prevent Gharar.

117 The lender can only estimate risk and willingness to invest 

when information is available to conduct the financial analysis. Although PLS can have its 

positive effects, in the specific case of Afghanistan it is difficult to exchange information. 

First, because information exchange is not part of the normal procedures of smaller firms 

and they lack the knowledge how to exchange information. Second, Afghanistan lacks 

the infrastructure in the remote areas to exchange information in a timely and organized 

manner. As a result, there is risk-sharing but dismal information exchange.

Asset backed finance is problematic during a stability operation, but especially in 

Afghanistan because people simply lack the assets to back up their loans. This negates the 

positive effects of asset-backed finance as explained earlier in this monograph, but also 

increases the risk for financial institutions and lenders. This is one of the reasons why the 

collateral for loans is 253.5 percent as depicted in Table 1.
205

The challenges to apply PLS and asset-backed finance are reasons that the SCF system 

creates financial products that are Shari’a compliant in form, but are less Shari’a compliant 

in content. An example is when a depositor participates in a PLS construction and the bank 

provides the depositor a fixed return on investment instead of a return based on the profit 

of the activities of the entrepreneur. Banks sometimes do this to compete with conventional 

banks that provide a fixed interest rate. The bank provides a product that is Shari’a

compliant in form but not in content by defining the return on investment as compensation 

and not as interest. This is a method of financial engineering that mimics conventional 

financial products without violating the formal SCF regulations like Riba.

118 The SSB of 

each financial institution determines whether a financial product fulfills the requirements 

of SCF.119 It all depends on how to define the return on investment. Although the literature 

mentions this as a disadvantage of SCF, it is a practical solution for the Afghans to apply 

SCF. Therefore, the best compromise is to engineer financial products in such a way that 

they fulfill the SCF religious requirements and fulfill the required financial function and 

balance of risk.120

The challenges to sustain a SCF system in Afghanistan are a consequence of infrastructure 

that years of war destroyed and continuity of insecurity. Therefore, financial institutions 

will have to invest in security as well as in infrastructure to enable them to develop their 

financial system outside the major cities. The current financial system is highly centralized 

and 75 percent of all loans arise in Kabul.121 Therefore, providing financial services is 

expensive outside Kabul because population density is low, infrastructure is poor, and loans 

are small.122 In addition, Afghanistan lacks qualified professionals that have knowledge 

of Shari’a, finance, and economics. This means that financial institutions have additional 

expenses to hire expensive expatriate staff that has the capabilities and knowledge needed 

to operate the financial system.123

To conclude, the best compromise between religion and functionality is to create a SCF 

system that establishes legitimacy based on religion, but uses conventional finance to be 

functional. This means that financial engineering within SCF is not a negative characteristic, 

but a practical compromise to facilitate bank penetration and develop economic growth in 

Afghanistan.

Rule of Law

As previously described, SCF depends less on conventional levels of rule of law 

because of the strict application of Shari’a law. Therefore, people do not depend on the 

conventional judicial system but adhere to the verdicts of Islamic scholars and clerks to 

settle disputes.124 Additionally, the long-term positive results of the Hawala system in areas 

where there was no formal rule of law implies that SCF can survive and grow under such 

circumstances. However, depending on Shari’a for the implementation of SCF has both 

short term and long-term effects.

The short-term effect is positive for bank penetration and the economic development of 

an Islamic region. Using the Islamic system will facilitate bank penetration because it gives 

people the possibility to protect their property rights, which is a prerequisite for business. 

Properties rights are important, especially in low-income countries. Effective property 
206

rights limit uncertainty and makes doing business more efficient and less expensive.125

However, depending on local justice will decrease uniform rights in Afghanistan because 

the interpretation of Shari’a differs per region or school of thought. Nevertheless, it will 

facilitate subjective confidence in the regions.

The long-term effect is that it will be extremely difficult to create a uniform Afghan 

financial system that adheres to the international recognized standards for finance because 

interpretation and application of rules and regulations will differ per region. However, the 

IMF can prevent this problem by continuing and intensifying its support and cooperation 

with the IFSB to supervise and regulate SCF in Afghanistan. This should not be difficult 

because the IMF is already supporting the IFSB.126

Applying SCF can facilitate Afghan bank penetration because it does not need the same 

level of rule of law as a conventional financial system. Therefore, subjective confidence in 

the SCF system will increase. The only long-term point of concern is that there should be a 

plan for evolving into a system that adheres to the internationally recognized standards of 

finance and, therefore, establishing objective confidence.

Bank Penetration

The application of SCF can facilitate bank penetration in Afghanistan by improving 

subjective confidence without having to violate objective confidence. Currently, bank 

penetration is low in Afghanistan. The international development community missed 

an opportunity to attract at least 50 percent of the Muslims in Afghanistan to the formal 

financial system by making the population aware of SCF. By developing a financial system 

that based on a Western financial paradigm, the Western organizations neglected the 

preferences of the local population as well as the possibilities of SCF to facilitate bank 

penetration.

The analysis also found that religion and social influences are the most important reasons 

why people choose SCF as the preferred way to fulfill financial needs. Although most of 

the studies focused on perception and not on facts, the results indicate the importance 

of subjective confidence that people have in a financial system. In addition, the fact that 

Afghanistan is relatively poor and has an Islamic society helps to attract people to SCF and, 

therefore, facilitates bank penetration in Afghanistan.

Literature implies financial engineering as a negative characteristic of SCF. However, 

the analysis in this monograph found that financial engineering could be a practical 

solution for the situation in Afghanistan. Establishing legitimacy based on religion and 

using conventional finance creates a functional system that fulfills profitability and, 

therefore, sustainability. SCF is a way to establish a practical compromise to facilitate bank 

penetration and develop economic growth in Afghanistan.

Applying SCF can facilitate Afghan bank penetration because it uses local Islamic 

judicial systems to settle disputes and protect property rights. The effect is also that it 

facilitates subjective confidence in SCF. SCF is local and people are familiar with the 

system. The only point of concern is that in the longer term Afghanistan needs a plan of 

how to evolve into a system that adheres to the internationally recognized standards of 

finance to establish objective confidence.
207

Significance for the Military Commander

Operational art promotes unified action and supports the commander in achieving the 

strategic objective by integrating the elements of national power as well as the efforts of 

multinational partners. Operational art is commander centric and enables the commander 

to link the ends, ways, and means in order to achieve the desired military end state.127

Therefore, the commander designs an operational approach that describes the broad 

actions the force must achieve.128 To develop an operational approach the commander must 

understand the strategic direction and the operational environment, and the commander 

must define the problem.129 As stated in the introduction of this monograph, military forces 

play an important role in supporting economic stabilization and infrastructure development 

and the support for the development of a financial system.130 However, besides some 

security and logistical tasks, there is no evidence that the military provided any substantial 

support for the development of the financial system in Afghanistan.131 Previous discussion 

showed that SCF could facilitate bank penetration by improving subjective confidence 

without compromising on objective confidence in order to develop the financial system 

as part of the economic development of Afghanistan. This section describes five lessons 

the military commander at the operational level can learn from this knowledge to assist in 

achieving the military end state.

Lessons Learned

The first lesson is that this monograph found that SCF is an alternative or at least a 

valuable complement to the development of a financial system in Afghanistan. Commanders 

should consider this when planning, preparing, executing, and assessing a stability operation 

in a country with a Muslim majority. This leads to four addition lessons.

The second lesson is that the commander should challenge and compare the Western 

definition of the operational environment, the problem and the operational approach 

with a Muslim paradigm. Although the military commander is in a supporting role when 

developing a financial system, commanders should realize that a Western paradigm could 

hinder their analysis of the operational environment and development of an operational 

approach. Previous subsections have shown that the social, economic, and financial 

elements of the operational environments in Afghanistan are different from a Western 

environment. For example, Muslims focus more on the hereafter than non-Muslims do, 

Muslims consider just and equitable distribution of resources as important functions of 

their economic system, and Muslims cannot invest in Haram goods and services. Although 

previous subsections showed that the function of a financial system is to reduce the risk for 

investors and to create financial possibilities for entrepreneurs, regardless of whether the 

financial system is based on religious principles, the operational approach supporting SCF 

system can be different from supporting a Western financial system.132 Different paradigms 

will influence the perspective of an operational environment and the operational approach 

achieving the military end state. Challenging our Western paradigm prevents the military 

commander from pursuing the wrong military tasks in time, space and purpose.

The third lesson is that the military must invest in basic knowledge of Islam, SCF, 

and Afghan society in order to effectively support the development of a financial system 
208

in Afghanistan. This goes further than cultural awareness. The monograph described the 

sources, principles, products, and standards of SCF, and described positive Islamic ways to 

facilitate bank penetration. The previous sections showed that Islam and the SCF system 

are different from our Western, primarily Christian, society and financial system. These 

differences require that the military obtain additional knowledge in order to prepare, plan, 

execute, and assess the support of an SCF system during stability operations in Afghanistan. 

This knowledge enables the military commander to mitigate weaknesses and threats; it 

also enables the commander to use the strengths and opportunities of the SCF system. 

An example is the use of religious reasoning and social influences to increase subjective 

confidence in the SCF system in order to facilitate bank penetration. A conventional 

Western approach would probably have focused on rationale, to convince the population. 

Previous subsections showed that Muslims have different considerations deciding which 

financial system to choose.

The fourth lesson is that the military should start building partnerships with other 

organizations that could facilitate the development of a financial system. The military can 

build partnerships with interagency organizations such as USAID. USAID has considerable 

experience in providing microfinance in Afghanistan. Additionally, USAID not only 

provides financial and local Afghan information, but also can integrate and synchronize its 

activities as an interagency organization with the military. An example is USAID providing 

microfinance based on SCF principles, standards, and products to local entrepreneurs and 

integrating the Commander’s Emergency Response Program Funds into SCF. This also 

means spending the funds in accordance with SCF principles.

A second group with whom to build a partnership is an international organization such 

as the IMF. The IMF has a wealth of expertise and experience. The military could use this 

information to improve its own effectiveness. An example of cooperation with the IMF is 

the use of knowledge they have in regard to their support of the IFSB.

A third group with whom to build partnerships are the local Islamic scholars and 

clerks. Local scholars and clerks can support the military commander’s understanding of 

the operational environment and provide information to develop an operational approach. 

Their knowledge can provide insight into local circumstances because, as described 

earlier, Islam is not a monolith. SCF can differ per region, per school of thought, or even 

because of different local interpretation. Previous subsections also showed the importance 

of religious arguments in building subjective confidence. Local scholars and clerks can 

facilitate the improvement of subjective confidence in the SCF system because they can 

explain and convince the local Muslim population by using religious reasoning that fits 

local circumstances.

The fifth and final lesson is that the military commander should focus on facilitating 

local efforts instead of providing a solution for the development of the local financial system. 

The World Bank, the IMF, and USAID provided mainly top-down support to the financial 

system. However, religious arguments and social influences are the most important reasons 

to choose SCF. Facilitating local Muslim efforts better supports subjective confidence than 

providing them a Western based system. A bottom-up approach seems to be more promising 
209

compared to previous efforts by the World Bank, IMF and USAID. Although there are some 

shortcomings in SCF principles, products and standards, SCF is able to attract a substantial 

percentage of Muslims to the formal financial system. Therefore, during preparing, 

planning, executing and assessing a stability operation, the military commander should not 

only focus on the disadvantages of SCF, but also on how to combine the positive effects 

of SCF with conventional finance in order to achieve a maximum development effect on 

the financial system. Examples of this combination are the SCF products that are Islamic 

in form and conventional in content. The military commander should not judge a financial 

product when it fulfills the needs of Muslims and fits into the international financial system. 

Another example is to enable the local population to use Shari’a to develop their financial 

system or to settle their disputes, especially in Afghanistan, where the informal Hawala

system replaced a destroyed financial system. Bank penetration can benefit from SCF.

Summary

SCF can facilitate bank penetration in order to develop the financial system in 

Afghanistan. However, using SCF provides the military commander five lessons. The first 

lesson is that SCF is an alternative or at least a valuable complement for the development 

of a financial system in Afghanistan. The second lesson is that the military commander 

must challenge and compare the Western paradigm with a Muslim paradigm in order to 

prevent to develop a deficient operational approach. The third lesson is that the military 

has to invest in basic knowledge of the Afghan society, Islam, and SCF in order to mitigate 

weaknesses and threats and to use the strengths and opportunities of the SCF system. The 

fourth lesson is that the military should start building partnerships with other organizations 

to enable unified action. The final lesson is that the military commander should focus on 

facilitating local efforts instead of providing a solution for the development of the financial 

system in order to achieve the maximum development results.

Conclusion

This monograph challenged the generally accepted way of developing the financial 

system in Afghanistan. SCF improves the development of a financial system during stability 

operations by increasing subjective confidence in the financial system and therefore 

increasing bank penetration in Afghanistan.

Development of the Afghan financial system focused on Western financial principles 

and neglected SCF to facilitate the development of the financial system. As a result, 

the World Bank, IMF and USAID, as main contributors, established the internationally 

recognized standards for a financial system in Afghanistan. However, based on World Bank 

and DAB data, bank penetration was inadequate. These organizations managed to achieve 

objective confidence, but failed to establish subjective confidence in the financial system 

in Afghanistan.

The second part of the monograph defined SCF as a financial system based on Islamic 

principles and values that offers Muslims a possibility to fulfill their financial needs within 

the limits of Islam. This part also described the sources, principles, products and standards 

of SCF which research used to analyze whether SCF could have been an alternative for 
210

the development of the financial system in Afghanistan. Based on the assessment of the 

available information, research found that an estimated 50 percent of the Afghan population 

would choose SCF if they had a choice and that religion and social influence are the most 

important reasons for SCF selection.

Reliability of SCF is closely linked to subjective confidence: the perception of people 

to trust SCF because the system behaves and works in the way people expect it to behave. 

Although research did not find data that could objectively validate the reliability of SCF, 

the number of Muslims preferring SCF and the growing demand for SCF provided the basis 

for the conclusion that reliability of SCF is high among Muslims. However, the existence 

of an SSB could constrain objective confidence while at the same time an SSB can also 

pursue subjective confidence because they have the legitimacy in a Muslim society to 

determine financial products as Shari’a compliant.

Sustainability of the SCF system is problematic in the Afghan situation, especially 

when applied a strict manner. It was therefore remarkable to discover that there is some 

level of adaptability in SCF systems because Muslims do not always apply PLS, asset 

backed finance, and other SCF products in a strict manner. Financial engineering is a way 

to fulfill Islamic needs and requirements, while simultaneously establishing sustainable 

financial products. The best compromise between religion and functionality is to have an 

SCF system that uses religion to establish legitimacy but uses conventional finance to be 

functional. Therefore, the disadvantage of SCF is mitigated by creating SCF products that 

are Shari’a compliant in form but not necessarily in content.

A lack of rule of law is not always problematic for the development of SCF because it 

uses the local Islamic judicial system of scholars and clerks to settle disputes and protect 

property rights. Using the local system even facilitates subjective confidence in the financial 

system. The only point of concern is that in the longer term there Afghanistan needs a plan 

to evolve into a system that adheres to the internationally recognized standards of finance 

and therefore establishes objective confidence.

The third part of the monograph described the lessons for a military commander when 

tasked to support the development of a financial system. Research found five main lessons. 

The first and foremost lesson is that SCF is an alternative or a valuable complement to a 

conventional financial system in Afghanistan. The military commander should not limit 

himself to analyzing and acting only in accordance with a Western paradigm. The force 

also needs additional knowledge about Islam and local Afghan financial customs. The 

military should invest in partnerships with interagency, international, and local Afghan 

organizations and entities such as Islamic scholars and clerks. The last and most important 

lesson is that the military should facilitate local efforts instead of imposing a solution. 

When the military supports and encourages locals, they can increase subjective confidence 

and improve bank penetration.

To conclude, the best way to apply SCF in order to improve the development of a 

financial system in Afghanistan during stability operations is by facilitating local efforts, 

which facilitates subjective confidence and therefore increases bank penetration. In order 

to mitigate the risk for sustainability in the longer term, the World Bank and especially 
211

the IMF should maintain their focus on how to evolve an SCF system into a system that is 

still Shari’a compliant but also fulfills all internationally recognized financial standards. 

This is not a major challenge because the IMF is already engaged in providing support to 

the IFSB, and maybe this is a first step to enable the local population to truly own their 

economy.
212

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221

Conclusion

by

Dan G. Cox

Nothing that contains great promise comes free of peril, and the notion of expeditionary 

economics is no exception. The essays in this volume, written by US Army and foreign 

officers, explore the specific promises and perils that lie ahead. This honest exploration 

of the practice of expeditionary economics is in keeping with Carl Schramm’s and the 

Kaufmann Foundation’s initial promise to explore fully the concept of expeditionary 

economics. Unfortunately, Carl Schramm left unceremoniously and abruptly in 2011, the 

Kaufmann Foundation declared that expeditionary economics had won the day, and there 

was no longer a need for the Kaufmann Foundation to devote resources to a time proven 

concept with momentum of its own.1

While Carl Schramm likely meant what he said at the Kaufmann Foundation’s initial 

conference—that expeditionary economics was a new concept and that, despite writing the 

initial Foreign Affairs article outlining a notional definition, he felt the work of refining 

the definition and practice of expeditionary economics fell on those interested souls in the 

audience—it was less clear that the Kaufmann Foundation shared his vision. One of the 

first indications that Schramm’s vision was being contested was the announcement that the 

Kaufmann Foundation would publish a Field Manual on Expeditionary Economics. 

Either the Kaufmann Foundation did not understand Army culture at all or they were 

signaling that Expeditionary Economics would be foisted upon the Army from on high. The 

Army produces numerous field manuals on every military topic ranging from leadership to 

planning and operations. Dubbing the new Expeditionary Economics tome a field manual 

raised eyebrows and a few hackles. 

If this collected work serves no other purpose, it serves to provide that unbiased, 

academic exploration of the concept and practical application of Expeditionary 

Economics. Each author approached this topic individually and conducted deep research 

which produced vast variance in conclusions regarding the viability of the concept and its 

application. Hopefully, Carl Schramm will find a copy of this someday and realize that the 

academic examination of his embryonic concept did take place.

Overarching Conclusions

The chapters contained within this edited work are diverse, ranging from case 

studies of Stability Economics providing an integral part of the solution to the Shining 

Path problem in Peru to an examination of the doctrinal and strategic implications of the 

Expeditionary Economics movement. Also, each author ended up drawing widely different 

conclusions about the prospect of Stability Economics as a viable and practical US Army 

endeavor. No single author fully embraced or dismissed Stability Economics, but there 

was great variance in how far each embraced the notion or cast it aside. This made drawing 

overarching conclusions from all five works difficult but not impossible.

All of the authors acknowledged the importance of Stability Economics to modern 

warfare. Regardless of whether or not the American military is engaging in a major combat 

operation, counterinsurgency campaign, or nation-building, all of the authors contained 
222

within this volume agree that economic factors play a key role. However, they found the 

execution of economic warfare to be lacking. 

This is important as more publications come out referencing the weaponization of 

money and as post-conflict reviews of the use of the Commander’s Emergency Relief 

Program (CERP) funds occur. Lessons learned from the recent Afghanistan and Iraq 

campaigns should not be overemphasized as representative of all efforts on the part 

of the American military to use economics in war, but neither should these lessons be 

marginalized, or worse, lost. 

Major Marc Pelini posits that there is a growing foundation in recent executive 

and Department of Defense (DoD) writings placing a greater burden on the US military 

to carry out stability economics as part of larger stability operations. The 2010 National 

Security Strategy and the DoD’s National Defense Strategy both layout a larger anticipated 

role for stability operations in the future. The US military will increasingly be tasked with 

performing such operations, and while the 2010 Quadrennial Defense Review indicates 

that the Army’s Civil Affairs branch will be tasked with supporting economic development 

efforts with partnering nations, this is indicative of only one aspect of Stability Economics 

with which the US Army will have to deal. 

Pelini concludes that robust economic development can only occur in an environment 

of stable security, good governance, and the rule of law. These are the foundations he sees 

the US Army being most able to affect in the early stages of Stability Operations. However, 

he finds that an uncoordinated effort between the Civilian Response Corps (CRC), USAID, 

Provisional Reconstruction Teams (PRTs), and other international aid agencies creates 

confusion that often occurs before the prerequisites of security, good governance, and rule 

of law are established. 

Pelini closely examines the US Army’s use of Commander’s Emergency Relief 

Program (CERP) funds and finds that while much of the use of these funds was ineffectual, 

there were some successes. For Pelini, the problem is that none of the economic lessons 

learned are being formalized into doctrine or really even saved in any systematic form at 

all. 

In the final analysis, Pelini, like several of the other authors, sees the need to introduce 

not only new training and doctrine dealing with Stability Economics but a new force 

structure. Pelini is the most aggressive, suggesting an expansion of Civil Affairs capabilities 

largely through reorganizing the existing Heavy Combat Brigade Team (HCBT) structure. 

As will become evident throughout this chapter, Civil Affairs is the most often referred to 

Army branch in Stability Economics discussions.

One Army practice that needs re-evaluating is the Sewer, Water, Electronic, Academics, 

and Transportation (SWEAT) construct. The assumption going into Afghanistan and Iraq 

regarding services and economics was sound: basic services are a battleground between 

insurgents and counterinsurgents. The one who could provide the most service the quickest 

was likely to win more support from the local populace. However, it is absolutely true 

that adherence to the SWEAT concept constrained operational and strategic thinking and 

forced a pre-conceived notion onto an environment and human domain that perhaps needed 

something completely different. 
223

So Anthony Barbina’s analysis and contribution becomes extremely important, 

especially at the operational and tactical level, as he finds SWEAT to be lacking in both 

the Afghanistan and Iraq counterinsurgency campaigns. Major Barbina proposes a very 

fine-tuned analytical device, the Factor-Precedence Model, to not only offer that there 

are nineteen broad infrastructure categories the US Army should consider building or 

rebuilding in a counterinsurgency fight, but also that there are regional factors, perhaps 

even local factors, that shape the order preference in which the US Army should tackle these 

infrastructure problems. This is one of the most important insights echoed by several of the 

other authors. Cultural factors play a big role in the desires of the people and, therefore, 

on what type of economic development is most appropriate and will be most effective in a 

country, region, or locality.

Building on this, Lieutenant Colonel J. Willem Maas argues that opportunities were lost 

in Afghanistan when Western military and international agency efforts, like those initiated 

by the World Bank, hammered a western style banking system into a fundamentally Islamic 

populace. Maas argued convincingly that the application of Shari’a Compliant Finance 

(SCF) has increased bank and financial penetration in the Islamic world and would have 

helped to improve economic development in the Afghanistan counterinsurgency campaign. 

There are many constraints SCF places on lending, but Maas argues that the overall benefit 

of lending penetration far outweighs the risks associated with SCF. Further, Maas suggests 

that Western lenders could meld some Western practices to SCF to create a more palatable 

hybrid that would accelerate economic development even further. In the final analysis, both 

Barbina and Maas warn that the US military and its interagency partners must not only 

collaborate together more efficiently but take time to understand local economic practices 

and desires before engaging in any Stability Economics endeavor in order to achieve full 

and effective unity of action.

Major Thomas Archer-Burton warns that millions of dollars in CERP funds and 

interagency aid has been wasted in Iraq and Afghanistan. Mirroring Major Barbina, ArcherBurton warns that CERP funds and other investments have been used largely to build 

infrastructure regardless of the local need. Many schools were constructed in Iraq that 

were later blown up by insurgents without a single student attending. Locals were often not 

consulted prior to a school being built. Archer-Burton correctly argues that Carl Schramm 

intended Expeditionary Economics to be entrepreneurial in nature. He sees four major 

problems with such a proposition. First, outside organizations, be they military or civilian 

in nature, will be much more adept at dictating changes, e.g. controlling the economy 

from the Keynesian commanding heights. Engendering the entrepreneurial spirit will be 

nearly impossible for any organization, but particularly the US Army as it has neither the 

expertise nor resources to do this while it fights a war or counterinsurgency. Archer-Burton 

notes that the US Army expended over ten billion dollars on infrastructure development 

but only a few million to engender an entrepreneurial spirit in either Iraq or Afghanistan. 

As a side note, such expenditures often undermine local economic development and lead 

to inflationary trends.

The second major problem is that money dispersed is rarely given with strings attached, 

strings that would help an entrepreneurial spirit to grow. This means there is no incentive 
224

to drive an entrepreneurial shift in economic culture and the results in Iraq show that no 

such culture has been engendered. Further, even successful projects enacted by Provincial 

Reconstruction Teams (PRTs) can lead to a culture of dependency rather than development. 

Currently, scholars are speculating on the ramifications to the Afghan economy that a full 

Coalition exit will cause. 

Archer-Burton notes that when the military correctly focuses on winning short-term 

loyalty from the people, they miss engendering the long-term economic development that 

many see as at least part of the long-term solution to the strategic military problem. Too 

often projects are hastily constructed, funds are corruptly diverted, and no one notices or 

cares as long as the key leaders and organizations in a commander’s area of operations are 

quiescent during their tour of duty. Archer-Burton has a strong point here that cannot be 

understated. However, sometimes short-term loyalty buying is necessary. The trick is fitting 

those short-term economic actions in time, space, and purpose with a larger campaign to 

develop the economy of a locality, region, or state.

Finally, Archer-Burton argues that the militarization of aid and economic development 

is sure to bring the ire of international organizations who already engage in this activity. 

Not only will organizations like the United Nations and, specifically, the United Nations 

Development Program (UNDP) feel that increasing military aid is an indictment of their 

past performance but other organizations whose profit or non-profit mandate revolves 

around international development will feel that their very existence is threatened. This is 

an insightful point which, to our knowledge, has not been posited previously. 

Major James Connally produced some interesting findings from his detailed examination 

of the Peruvian government’s efforts against the Shining Path insurgency. Like many of 

the other authors in this book, Connally found that economic development only works 

when a state or external actor understands the local economic culture. However, Connally 

provides three specific aspects of the human economic domain, which must be understood 

before successful economic development can occur. First, one must understand that if the 

poor are excluded, if relative deprivation is allowed to expand, revolt is the most likely 

outcome. Second, one has to work with or around local customs that allow for extralegal 

economic transactions or black markets. Third, one cannot hope for reform all at once. If 

change occurs rapidly, it will create too much shock to the economic system, resulting in 

sometimes dire unintended consequences. At the very least, quick reform is unlikely to 

stick or create a lasting entrepreneurial market and culture. 

Connally also found that while the Peruvian military correctly deduced that economic 

concerns produced security concerns, they, despite the best intentions, were not savvy 

enough to bring about lasting economic change. It was not until the President Fujimori 

administration that a new and successful path toward economic development was carved. 

Despite severe economic crisis, President Fujimori resisted the temptation of outside aid, 

opting for the far more painful path of severing subsidies and many entitlements in order to 

allow market forces to take over. Short term pain led to long-term gain and ultimately was 

integral in undermining the Shining Path’s raison d’être and leading to this downfall of this 

insurgency. Connally emphasizes that the rule of law and orderly markets are the key to 

long-term economic development.
225

Expeditionary Economics is a relatively new concept that sprang out of the Kaufmann 

Foundation and has reverberated through academia. While not specifically cited by name 

in any national security document, the broader concept of Stability Economics is absolutely 

referred to as an important aspect of stability operations. So, for better or worse, the US 

military and, most likely, the US Army will be involved with this endeavor for some time to 

come. We do not mean to imply that the US military has never been involved in economic 

development in the past, but the explicit emphasis and rising list of tasks associated with a 

new and higher level of involvement is unique to this point in American history.

The good news is that all of the authors in this volume found utility in at least some 

aspects of military involvement in economic development. It has been shown to lessen 

violence and, in at least one case, undermine an insurgency. If the Marshall Plan is any guide, 

it can also turn bitter enemies into lasting allies but executing successful expeditionary 

economics is fraught with peril.

It should be clear to the reader at this point that the US Army is not organized to 

deal with this task effectively. For example, an inability to establish a micro-loan program 

similar to what Muhammed Yunis established in Bangladesh is a shortcoming. CERP funds 

can only be given as grants and, as such, can lead to graft or localized inflation. The US 

Army is predisposed to view money as a weapon and in many cases this is an effective 

way to use money but this leads to short-sightedness and an overemphasis on gaining 

loyalty from people rather than producing lasting development. US Army leaders are often 

not educated properly to accomplish long-term development in the first place. There is 

a pressing need to coordinate US Army leaders with expertise from civilian interagency 

partners and international lending and development organizations. There is not even a 

process to effectively identify and deploy those with economic expertise in a Stability 

Economics operation.

For all of the promise Expeditionary Economics held and the increasing emphasis on 

Stability Operations, little has been done to examine the US Army’s capabilities or the 

implications of foisting this new task on a budget constrained organization. This collection 

of works represents an honest attempt to approach and research this topic. It is our hope 

that other studies will follow.
226

Note

1. The editors of this volume had a written agreement granting the Kaufmann Foundation 

permission to print this book under their own press. In a phone call almost a year after the agreement, 

it was related to the editors that the Kaufmann Foundation would no longer publish works on 

expeditionary economics as the concept had been proven and had a life of its own.
227

Entrepreneurial Expeditionary Economics and the United States Military

Right Task, Wrong Tool?

by

Major Thomas J. Archer-Burton RHG/D - British Army

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Shari’a Compliant Finance

The Overlooked Element for Developing an Effective Financial System in 

Afghanistan

by

Lieutenant Colonel Jan Willem Maas - Royal Netherlands Army

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