It is an irony of U.S. foreign policy that those most responsible for crafting strategy to help countries jump-start their economies have the least experience in the private sector. The net result has been an embrace of false conventional wisdom and expensive failure. The U.S. Agency for International Development, for example, oversees a budget of $41 billion, much of which it pledges to finance self-reliance.

To do this, successive USAID leaders trumpet their efforts to empower small and family-owned businesses. Visiting Zambia earlier this month, USAID Administrator Samantha Power spoke about jump-starting small and medium-sized businesses. The organization trumpets its microfinance program in Lebanon. Between 2004 and 2009, USAID provided $300 million in microloans in Iraq to jump-start its private sector. In Iraq and Lebanon, that was money down the drain, even if USAID continues its flow. Few if any of the private sector success stories in either country have roots in American assistance.