Aid And The Unraveling Of Pakistan.(Point of View)

Democracy suffered a string of setbacks in 2007, many thanks to oil. Gushing oil revenues helped Vladimir Putin consolidate authoritarian rule in Russia, Hugo ChA vez expand populism in Venezuela and Mahmoud Ahmadinejad confront the West. All the while, an analogous force was at work in Pakistan. For more than 50 years, Pakistan has reaped its own unearned manna, which has filled its coffers and kept its fragile state afloat. In this case, however, the money didnat come from the ground, but from massive military and other forms of aid, largely from the United States, China and Saudi Arabia. Yet while the source may be different, the impact of all this cash on Pakistan has been just as destructive as oil wealth elsewhere: bloating the military and creating a culture of violent instability, in which assassinations like that of Benazir Bhutto are sadly inevitable.

Itas impossible to understand Pakistanas current woes without examining the massive volume of aid itas amassed over the past half centuryaand that aidas deeply corrosive effects. Since its inception, Pakistan has strived desperately to counterbalance India, cultivating ties with any state willing to help it. This has never been hard: in the 1950s, Washington contributed generously in exchange for Pakistanas anti-Soviet military stance. Then, beginning in the 1960s, China, which also saw India as an enemy, came calling. Still more money flowed in from rich Middle Eastern governments, especially Saudi Arabiaas.

The 1980s brought the Afghan war against the Soviets, with Pakistan as the main conduit for supplies and support to the mujahedin; the United States alone chipped in $5.3 billion during this period. The CIA and Saudi intelligence also poured money and sophisticated technology into Pakistanas ISI, or Inter-Services Intelligence agency, helping turn it into the most notorious and destabilizing actor in the country. Altogether, Pakistan accumulated a whopping $58 billion in foreign aid between 1950 and 1999, allowing it to become one of the biggest military spenders in the world. After 9/11, Washingtonas generosity redoubled; itas since given Pakistan more than $10 billion in assistance.

The consequences have been devastating, for reasons similar to those at work in the so-called natural-resource curse. Extensive research shows that when governments luck into unearned cash (which economists call arentsa) from oil or other resources, the healthy links that bind them to their citizens are often severed. Freed from relying much on taxes, governments spend the money arbitrarily. Citizens, left untaxed, feel less motivation to monitor things carefully. The result is corruption, misrule and a host of other ills.

Rents paid for natural resources are bad enough. But astrategic rentsaaearned by a country for its role in the foreign ...