The Problem of Credible Commitment in Reconstruction

Abstract

Reconstruction involves military occupation with the aim of rebuilding and reforming both formal and informal institutions along liberal democratic lines. We contend that successful reconstructions require mechanisms which make reforms credible over the long-run. In the absence of a signal of sustained credible commitment, institutional reforms will not be trusted by the populace resulting in the failure of the broader reconstruction. The incentive, information and epistemic aspects of the credible commitment problem are analyzed. We also consider potential solutions to the problem of credible commitment. Absent such solutions, attempts to "export" institutions via military occupation should be either limited in their scope or curtailed entirely.

Keywords: credible commitment, institutions, military occupation, reconstruction, reform

JEL Classification: B52, D74, P41