The Fund for the Study of Spontaneous Orders, which is administered by the Atlas Economic Research Foundation, awarded Coyne its Hayek Prize in 2007 for: ...a series of related articles on the influence of institutional arrangements on entrepreneurship and international development; and on weak and failed states and the problem of nation building.

The central argument is that continued efforts to export democracy through military occupation and reconstruction are more likely to fail than to succeed because of an array of constraints facing occupiers and policymakers.

In the book, Coyne contends that failure is due to the inability of foreign governments to centrally plan the complex array of institutions which underpin liberal democracy.

Coyne provides a new vision of U.S. foreign policy including principled nonintervention and a commitment to free trade in goods, ideas and cultural products.

Doing Bad by Doing Good argues that epistemic constraints and perverse political incentives contribute to the ongoing failure of state-led efforts to alleviate suffering.

Coyne and Hall call the pattern of domestic adoption of tactics applied abroad, due to limited constraints, "the boomerang effect."

They consider a variety of rich cases that include the rise of state surveillance, the militarization of domestic law enforcement, the expanding use of drones, and torture in U.S. prisons.

They show that the U.S. government has purposefully provided partial or misleading information about the actual threats to the security of U.S. persons while contributing to a broader culture of militarism.

Towards the end of the book, they offer potential institutional reforms that would limit the extent to which propaganda can distort the ability of the citizenry to form informed opinions.