The Competition to Provide Services---Phase II

A generation ago, George Stigler conditioned us all to think of the government as a participant in a competitive market for services. You see this no more clearly than in “revolutionary situations”--guys in bandoliers running day-care centers in the mountains, while trying to blow the brains out of ministers in the capital. Or, last week, as Hezbollah undertook the rebuilding of Lebanon.

But that is only part of the story. For Phase I, Bruce Wallace caught the full implications last week in the LA Times:

AITA SHAAB, Lebanon — To enter southern Lebanon these days, you drive down roads where traffic is directed by young men in gray Hezbollah civil defense corps T-shirts and past bulldozers from the Holy War Reconstruction Co.

Days after guns fell silent, Hezbollah has emerged as the lead player in the cleanup of towns and villages in southern Lebanon. It has the volunteers, owns the equipment and has spent years burnishing its image as the champion of ordinary people, from poor tobacco farmers to doctors and lawyers, who see Hezbollah as much more than a militia.

Men fighting Israeli troops a few days ago are working alongside the Lebanese Red Cross to pull bodies from the rubble.

Nowhere across this blasted, pitted landscape is there any sign of the Lebanese government, or its authority.

"There is no government here," said an agitated Abdul Muhsen Husseini, president of the Union of Municipalities in the Tyre region — the man who is supposed to be in charge — as he handled requests from a stream of petitioners asking for money to buy medicine and what to do with the dead.

"We asked the government in Beirut to accompany the returning people to their villages, to repair water and prepare the roads," he said. "They said to me, 'God willing, we will come.' And they didn't come." . . .

In Beirut, the Cabinet issued a statement Wednesday saying it would "prevent the establishment of any authority outside the state" in southern Lebanon, and it pledged to restrict to the government the right to bear arms.

But on the ground in southern Lebanon, it is Hezbollah, emerging from a month of ferocious fighting with its health, education and civil services apparently intact, that calls the shots. . . .

[Hezbollah’s effort presents] a serious challenge to the central government in Beirut and the Bush administration, which is scrambling to launch its own rebuilding effort and deny Hezbollah a public relations dividend.. . .

In his office in Tyre, Husseini, the regional government official, begrudgingly credited Hezbollah and its Shiite allies in the Amal militia.

"At least they are on the ground helping," he said. "If you call them at midnight, they come out to help. They are the government."

So in competiton between “the government” and Hezbollah, seems to win the first round on points. But today we have Phase II—more competition. Here is Zeina Karam, for the Associated Press (in the New York Sun):

Arab League foreign ministers convened for an emergency meeting in Cairo to discuss a plan to create a fund to rebuild Lebanon.The meeting ended with no plan, but foreign ministers said a social and economic council would convene to discuss how to fund the rebuilding.

Diplomats said Arabs want to counter the flood of money that is believed to be coming to Hezbollah from Iran to finance reconstruction projects. An estimated 15,000 apartments were destroyed and 140 bridges hit by Israeli bombardment in Lebanon, along with power and desalination plants and other key infrastructure.

"This is a war over the hearts and mind of the Lebanese, which Arabs should not lose to the Iranians this time," a senior Arab League official said, speaking on condition of anonymity because he is not authorized to talk to the press.

Takes me back to a wonderful old Soviet-era cartoon, where the savage in the jungle tells his buddy:

“I’ve got an idea. First we threaten to go communist and the Americans send us advisers. Then we threaten to go capitalist and the Russians send advisers. Then we eat ‘em.”