The Middle East is presented as the intended subject of a proposed forecasting system designed to make dispersed knowledge useful to U.S. policymakers. In the book’s account, the region matters not as the setting for a narrated episode but as the focus of a debate over how intelligence might be gathered: rather than concentrating authority in a single bureaucracy, analysts and regional specialists could pool judgments through markets and other forms of aggregation.

Intelligence, Fragmentation, and Information

The proposal emerges from a broader critique of how intelligence agencies handled information. Congressional critics argued that agencies had failed to share information and had produced localized snapshots rather than a coherent picture of threats. Senator Richard Shelby faulted the FBI’s decentralized structure for leaving information in largely independent fiefdoms. The book frames the underlying problem as one of connecting local knowledge: decentralization can encourage independence and specialization, but information found in one part of a system may never reach the rest.

The author’s answer is not simply to replace decentralized agencies with a central command. Linking agency databases, for example, could improve information flow while leaving the agencies autonomous; even two years after September 11, the government reportedly lacked one unified watch list drawing on information across the intelligence community. The relevant distinction is between centralization and aggregation: the former concentrates decision-making, while the latter makes separate judgments collectively useful.

FutureMAP and the Regional Market

FutureMAP, funded by the Defense Advanced Research Projects Agency, was an abortive plan to apply decision markets to intelligence questions about the Middle East and elsewhere. One proposed component was a small internal market, potentially involving twenty or thirty intelligence analysts and a limited number of outside experts. Participants could trade contracts based on expectations about future events, drawing on classified information and other intelligence unavailable to the general public.

The internal market was intended to reduce the influence of bureaucratic politics on forecasts. Analysts from different agencies would have a reason to state what they thought most likely, rather than tailoring conclusions to please a supervisor, an agency, or the White House. The proposed mechanism therefore aimed to preserve specialized knowledge while allowing judgments from separate organizations to combine into a shared forecast.

The second component, the Policy Analysis Market, or PAM, drew intense criticism from politicians in the summer of 2003. Its central idea was to use a market focused on the Middle East to produce intelligence that might otherwise be missed. Public controversy centered on the prospect of betting on events such as the assassination of Yasser Arafat, but the book stresses that most proposed wagers concerned less sensational matters: Jordan’s future economic growth or the strength of Syria’s military.

PAM was not principally intended to forecast what Hamas would do the following week or to prevent another September 11. Its stated purpose was to improve assessments of Middle Eastern countries’ economic health, civil stability, and military readiness, and to clarify what those conditions might mean for U.S. interests. The people expected to trade—policy analysts, prospective regional experts, and businesspeople and academics from the Middle East—might collectively know things no single analyst could assemble alone.

Promise, Limits, and Aftermath

The proposal had design problems as well as political ones. If a market correctly predicted a coup in Jordan and the U.S. government intervened to stop it, the prediction would become false, potentially weakening incentives to forecast accurately. A functioning market would need to account for anticipated U.S. action, perhaps by making wagers conditional on intervention or by allowing traders to incorporate that possibility into prices. A fully liquid market might also face bubbles and attempts at manipulation. The book’s argument is not that markets work perfectly, but that their possible imperfections do not rule out their usefulness.

In fall 2003, NetExchange, the company responsible for setting up PAM, announced that a revised version would open to the public in 2004 without government involvement. The company said the new market would forecast broader economic, social, and military trends in the region, rather than terrorist incidents. This plan offered a chance to test the proposed approach against actual outcomes instead of rejecting it solely on the basis of its most provocative imagined use.

The book also anticipates that the U.S. intelligence community may return to internal prediction markets limited to analysts and experts. Such markets would treat the Middle East as a field of complex, changing conditions to be assessed through aggregated judgments, not as a subject reducible to a single prediction. The regional focus thus supports the chapter’s larger claim: better intelligence may depend less on giving one authority control of every piece of information than on building reliable ways to combine what many informed people know.