In April 2003, two US Army sergeants in Baghdad stumbled upon a hidden stash containing $650 million in uncirculated US $100 bills, likely stockpiled by senior Iraqi officials. This lucky find became the genesis for the Commander’s Emergency Relief Program (CERP), which provided billions of dollars to tactical units in Iraq to meet urgent humanitarian relief and reconstruction needs at the local level. Within four years, this accidentally funded program had enabled over eighteen thousand projects in twenty broad categories ranging from condolence payments to hospital repair to entrepreneurial micro-grants. Due to its popularity with ground commanders, Congress reinforced the program by allocating additional funding for Iraq as well as expanding the program to Afghanistan.

Prior to CERP, the US Army did not have a formal mechanism for placing military development funds directly into soldiers’ hands. The program thus fundamentally transformed the way the military viewed and employed money; with CERP, money became a “weapons system,” and stacks of cash were “ammunition.” This new tactic fulfilled an important need in modern warfare—to achieve stability by means other than combat. However, CERP turned out to not be the “magic bullet” the military hoped it would be. Enabled by the broad latitude afforded to commanders and an “engineering mindset,” the program quickly drifted away from short-term relief projects toward larger infrastructure projects. Further, many commanders began to measure success by the amount of money spent under the logic that if “big” is good then “bigger” is better.

By the end of 2007, large CERP projects (with costs exceeding $500,000) made up just 3 percent of all projects but comprised over 40 percent of total CERP funding allocations. These figures included expenditures arguably falling outside of the program’s original intent, such as $4.2 million spent to build a hotel at Baghdad International Airport. In total, DoD allocated $4.1 billion in CERP funds to Iraq and $2.3 billion to Afghanistan. Overall, the money spent did not translate into enduring tactical or strategic outcomes.

Fifteen years after CERP’s beginning, a US-advised offensive has defeated ISIS in Iraq, liberating the city of Mosul but leaving much of it in ruins. A recent Iraqi plan to rebuild Mosul would take years and cost $100 billion (half of the total cost of the Marshall Plan when adjusted for inflation). As the US military looks to address this and future security challenges worldwide, it needs a deliberate approach to employing money and other forms of military development aid within current and former combat zones. However, instead of an “emergency” program, both conventional and advisory units require a deliberate method to consolidate tactical gains, complete with clear objectives and evaluation criteria. This is where “tactical economics”—the use of military development aid to achieve windows of relative advantage over the enemy—can play a vital role.

Describing the “How” in Consolidating Gains

Informed by lessons from the Global War on Terrorism, the Army recently published a new operations field manual (FM 3-0, Operations). This doctrinal update emphasizes the importance “consolidating gains,” the process of making military objectives enduring. After defeating the Iraqi military in 2003, the United States suffered a far-reaching failure to consolidate gains. Subsequently, it saw hard-fought military gains slip away as a determined insurgency materialized.

Instead a pursuing a top-down Marshall Plan approach, DoD needs a means of conducting “in-conflict development” to translate short-term gains into longer-term outcomes. Military development aid such as CERP can be a powerful weapon in doing this at all stages of a conflict. The Sons of Iraq program provides an example in how CERP contracts facilitated security cooperation by Sunni tribes and correlated with a large decrease in violence across Anbar province.

To be sure, there are risks of deploying aid in the form of economic programs, but when used effectively, “tactical economics” can be a powerful weapon with which to achieve short-term, local effects. This is particularly true in situations where kinetic operations are limited for legal or moral reasons. Although the Army’s primary mission is not to wield economic influence, it does have the ability to rapidly place resources such as food, building materials, and other forms of military development aid at the point of greatest impact. Numerous studies have examined the effect of such aid during conflict in various countries, including Iraq, Afghanistan, and the Philippines. We have distilled these lessons into three core points.

1. Money can be an effective weapon for consolidating gains.

As the US experience in Iraq and Afghanistan has demonstrated, reconstruction spending alone cannot conclude a conflict. However, military development aid does provide a vital tool that can increase local stability and consolidate gains through non-kinetic means. Recent empirical research has documented the fact that military aid can have violence-reducing effects. Researchers with the Empirical Studies of Conflict (ESOC) have estimated that every additional dollar of per capita CERP spending in Iraq during 2004–2009, was correlated with1.59 fewer violent incidents per 100,000 residents over six months.  Compared to an average rate of 58.6 violent incidents per 100,000 people per six-month period, this result indicates a relatively small but measurable impact.

This finding is consistent with a study of Afghanistan CERP spending during 2011–2013, which found that each dollar spent on small (less than $50,000) CERP projects per capita was associated with eight fewer violent incidents per month. This was a significant reduction from the prior average of 13.4 violent incidents per month. Similarly, one of this article’s authors found that at the Afghan district level during 2008–2013, every CERP dollar spent per Afghan citizen per month on agricultural projects, such as seeds and irrigation ditches, was associated with approximately six fewer violent incidents per 100,000 people per quarter. This means that an infantry company responsible for three average-size Afghan districts could see a decrease of two attacks per month (a 16 percent reduction from an average of 11.7 violent incidents per month) through use of CERP.

Additionally, a 2016 RAND report found that CERP projects were also effective in achieving other potential stability measures beyond violence, including “softer” outcomes, such as building local rapport and enhancing local governance. While these studies cannot definitively prove a causal link between spending and violence reduction, they provide compelling evidence that military development aid can assist with consolidation of gains through violence reduction.

2. Type, size, and context of spending matters.

Just as soldiers must select the right weapon system to engage each enemy, commanders must tailor use of development aid to achieve the desired effect. Development projects can deliver vastly different effects under different conditions. For example, constructing an electric power plant may work for a relatively developed region experiencing little conflict, but the same project may actually fuel conflict amid an insurgency in a state with a weak government. During the first half of the GWOT, there was a widespread assumption that providing education to all children would help speed stabilization. However, building schools and educating girls in Afghanistan actually increased conflict as the Taliban then sought to de-legitimize the government. This is an example of “opposed development,” as defined by strategist and former advisor to Gen. David Petraeus, David Kilcullen.

Empirical research has shown that small military development projects are generally more effective than large projects. A team of researchers from Stanford University’s Empirical Studies of Conflict Project found that the US military’s economic reconstruction efforts were most effective when they were small, well-secured, and informed by community needs.16 The authors discovered that CERP spending was six times more effective in reducing violence when it was used for small (less than $50,000) rather than large projects. In fact, the vast majority of large non-CERP reconstruction spending over a three-year period (almost $1 billion) had no statistically significant violence-reducing effect.

Humanitarian relief given directly to the people, small business grants, and conditional cash transfers have empirically documented abilities to reduce violence. This is due to military units more closely meeting local needs and keeping the projects low profile. Often it is better to not have a visible US signature on development aid in order to prevent targeting by enemy forces. It is critical to remember that the amount of money spent is not a proxy for success. According to the US inspectors general for Iraq and Afghanistan (SIGIR and SIGAR), US forces likely wasted billions of dollars on massive reconstruction projects in those countries.

Even when applied in accordance with the needs of the population, local spending only appears to achieve results above a minimum threshold of security. In 2011, a team of researchers from Harvard and MIT studied the Afghan government’s spending efforts through the Afghan government’s National Solidarity Program (NSP), a World Bank–funded, community-driven development program that undertook small-scale projects. Using a randomized experiment, the researchers found the spending did not reduce conflict in the most violent areas; rather, aid was only effective in areas in which coalition troops maintained a presence. While the study did not involve military aid, it does suggest that simply spending aid money is not sufficient to produce security, but requires a minimum threshold of security to improve stability. Therefore, tactical economic programs should be viewed as a complement to, not a replacement for, combat forces.

3. Tactical effects of military development aid are difficult to measure.

Tactical units consistently seek to understand the impact of their operations, but have found that measuring the effects of economic programs oriented on improving stability is challenging. Conducting monitoring and evaluation for development programs is an inherently difficult task. Even international development organizations such as the World Bank and USAID—which routinely conduct development projects and are staffed with PhD-level economists—continually struggle to measure impact. Collecting and analyzing data is no easy feat in any developing country but is especially difficult on a battlefield during the chaos of combat operations.

Consequently, the US military has often defaulted to measuring activities that are easy to quantify, not ones that are necessarily important. Tactical units can readily measure dollars spent or the number of schools built, but such metrics do not necessarily adequately measure desired outcomes. This approach is analogous to measuring tactical success by number of rounds fired from a weapon rather than the effect on the enemy force.

While tactical economics has documented results in reducing local violence, it is extremely difficult to measure with precision. The high level of expertise required to do so is usually in short supply. However, these challenges should not deter the attempt, since better evaluations can enable more effective tactical employment of military development aid.

Economic “Weapons” Can Apply to a Range of Potential Future Conflicts

Why does this discussion matter? The US military’s charter is to maintain readiness for the next conflict, which may involve near-peer threats. Even conflicts fought against conventional forces present the need to consolidate gains after large-scale kinetic operations end. As FM 3-0 highlights, a failure to do so in a timely, effective manner can erode positions of relative advantage and cause us to lose opportunities to further exploit tactical successes. The object is not to simply rebuild but to win, meaning to bring a conflict to a successful conclusion through transfer of control to a stable, legitimate (and preferably local) authority.

It is possible to imagine a number of scenarios in which the US military would find a need to stabilize regions following large-scale conventional warfare, including a post-conflict North Korea or a clash with Russia in eastern Europe. Consolidating gains would involve making accomplishment of military objectives enduring to prevent relapse of control of the operational area into enemy hands, or a slide into insurgency. A range of tasks will be necessary based on the specific scenario, including managing internally displaced persons, establishing the rule of law, providing humanitarian assistance, and rebuilding infrastructure. Tactical economic programs provide valuable tools with which to accomplish these tasks.

How can the US military harness the power of tactical economics as a tool to consolidate gains? Updated doctrine, improved leader education, and stronger relationships with civilian researchers would provide a starting point, but there is no one right answer for employing tactical economics effectively across varied operating environment. Tactical units will need to experiment and evaluate what works in a specific context. But they will need a starting point, and as Lt. Gen. H.R. McMaster has pointed out, echoing historian Sir Michael Howard, it is important to not be “so far off the mark” that you can’t adjust once the demands of a specific combat problem reveal themselves.” With better starting assumptions and an upgraded evaluation plan, the US military can harness the power of economics to win conflicts during future decisive action operations.


Maj. Jonathan Bate is an infantry officer with twelve years of service and three combat deployments to southern and eastern Afghanistan and a fellow with the Modern War Institute. He previously served as an economics instructor in the Department of Social Sciences at the United States Military Academy and holds a Master in Public Policy from the Harvard Kennedy School of Government.
Capt. Duncan Walker is an instructor of economics in the Department of Social Sciences at the United States Military Academy. He is an infantry officer with nine years of service and two combat deployments to eastern Afghanistan. He holds a Master in Public Policy from Georgetown University’s McCourt School of Public Policy.


The views expressed in this article are those of the authors and do not reflect the official policy or position of the Department of the Army, Department of Defense, or the US government.