by Chris Coyne, F.A. Harper Professor of Economics at the Mercatus Center at George Mason University
Investors in the Kwality Kites Corporation gather to listen to the CEO’s ‘year in review’ presentation.
“In 2010,” begins the CEO, “we coordinated plans to deliver kites while supporting sustainable operations”
An investor raises her hand: “Can you tell us what you mean by ‘coordinated plans’ and ‘sustainable operations’ and what they have to do with the bottom line?”
“Of course” the CEO replies. “Here is a glossy picture of a smiling child flying one of our kites.”
“That is indeed a high quality photograph with a fine sheen” the investor responds, “but I am wondering how this relates to my investment.”
“In 2010,” the CEO continues, “we improved our understanding of our dynamic business environment, established and staffed various units, assisted in a professionalization program, and assessed our efforts.”
Another investor interjects, “What is the cost of these achievements? What is the value added? What was the outcome of these assessments?”
“These assessments” the CEO replies “are now being used to inform and guide our future efforts to address various issues.”
The investors protest almost in unison: “can you provide us with ANY specifics? We are all concerned about the profitability of the company.”
“Can you really measure the value of a child smiling?” replies the CEO.
I admit this is an absurd parody. That is, unless you’re the Office of the Coordinator for Reconstruction and Stabilization (S/CRS), charged with implementing aid and other operations of the U.S. State Department in war zones like Iraq and Afghanistan. S/CRS recently released its “Conflict Prevention and Stabilization Operations: 2010 Year in Review” report.
The report provides no clear benchmarks for assessment let alone a basic discussion of the annual budget or expenditures. There is no discussion of why activities were chosen, how much was spent, or even the slightest effort to discuss the value added.
The report does provide a few actual numbers. We are told that the S/CRS oversees $442 million associated with “1207 programs” intended to respond to “destabilizing events,” In 2010, $90 million was approved for these projects. The ‘assessment’ concludes that “existing projects will take several years to complete” and that “previously funded programs continue to have an impact.” We learn that the Civilian Response Corps was deployed to 28 posts in 2010.
With no actual effort to assess the reported ‘highlights,’ we must rely on the pictures provided to distract the reader from the lack of content. This includes a half page picture of a young boy flying a kite in Afghanistan and numerous employee profiles including pictures with locals. Also included is a before and after picture of a dirt road which has since been paved. Still no discussion of cost or value added.
There is a major difference between my parody and the work of the S/CRS. If my story were true, the investors would lose their money. But ineffective efforts of the S/CRS will cost resources and human lives. If the S/CRS is unable to provide rudimentary reporting and transparency, how confident can we be that they can stabilize and reconstruct entire societies? Answering this question is too important to be distracted by smiling children…even if they are flying kites.