"In a way, American global military intervention, in general, and in Syria, in particular, tends to encourage foreign governments and groups ally with it to engage in risky behavior whose costs end-up being paid by American soldiers and taxpayers, and could therefore be considered a case of “moral hazard,” not unlike the way that bailing out financial institutions encourages risky lending in the future since those taking the risks end-up operating under the assumption that they will not have to pay the full costs of future losses. Or to put it differently, insulating a certain foreign player from future risk is a “moral hazard;” the same player would behave differently than if it is fully exposed to the risk. Examples abound: Georgia provoking a conflict with Russia (expecting the U.S. to come to its aid); Pakistan supporting radical Islamists (expecting the U.S. to pay the costs of fighting terrorism); Israel building-up settlements in the West Bank (expecting Washington to protect it against international denunciations)."
Posted on: Mon, 16 Sep 2013 14:52:18 +0000
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