The U.S. commander in Afghanistan (general David Petraeus) caused quite a commotion recently when he chewed out a room full of Afghan government officials, including members of the presidential staff, for denouncing another instance of the "dead goat scam" as an effort to extort cash from U.S. forces, or halt operations against the Taliban. The Afghan officials were complaining that Afghan villagers claimed a recent battle had resulted in Afghan women and children being killed and wounded by U.S. forces. But the American forces had ample proof that no such injuries occurred. Patraeus had seen such claims fall apart many times before, and knew it was just another example of the corruption that contributed so much to Afghanistan's woes. What got the Afghan officials worked up this time was the accusation (by Petraeus) that the local civilians had injured their own children to gain more cash compensation for injuries caused by NATO troops. Although Petraeus did not mention it, the burns may have been the result of a common form of punishment in rural Afghanistan, putting the hand of an unruly child in boiling water. Foreign medical teams often encounter this kind of injury, and other types of savage punishments, and sometimes the parents casually admitted the cause. It was, after all, part of the culture.
American troops have been encountering the dead goat scam for years. Works like this. Any time a smart bomb gets dropped in an isolated location (which describes most of Afghanistan), and there is any chance of civilian casualties, the locals immediately make a fuss about seeking out who was hurt or killed. The village elders insist that outsiders stay away during this trying time. Even the foreign soldiers and Afghan police are held off (after the search for Taliban bodies, documents and equipment is completed). Being good Moslems, they bury the dead before sunset of the same day. The next day, the elders will claim as many civilian dead as they think they can get away with. The additional graves get a dead goat or other animal, so the proper stench permeates the mound of earth. Digging up graves is also against Islamic law, so the elders know the foreign troops have to take their word for it. The elders also know that the foreign troops, depending on nationality, will pay $1,000-$5,000 compensation per dead civilian. Not only is there a big payday, but the Taliban appreciate the bad publicity directed at the foreigners, and usually show their appreciation by cutting this village or valley some slack in the future.
This scam works because there aren't many public records in Afghanistan. The only ones who know exactly who lives in a village are the people there, and the elders speak for everyone. Investigators have a hard time interrogating individuals, because the elders, and everyone there, has a vested interest in not being found out.
Some of the elders get greedy. For example, despite an intensive investigation into a bombing two years ago in Azizabad (outside Herat), the villagers got paid for over 90 dead. Investigators, piecing together what information they could, were certain that there were only 15 dead civilians (plus Taliban). But you can't touch the graves, and even questioning the veracity of the claims gets you howls of indignation.
In Iraq, there were records, and most of the action was in densely populated areas. The investigations were prompt, and the Iraqis were not as bold and aggressive as the Afghans in keeping officials out. Iraq has a 5,000 year tradition of central government and officials who cannot be chased away. Afghanistan has none of that, at least out in the countryside. The local Afghan police are not enthusiastic about getting to the truth, since denying the villagers a payday will mean the police will be blamed, and the villagers will be eager to even the score down the line. If the police play along, they can expect a reward, from the village elders, for their trouble.
The scam benefits others as well. The Islamic media, and many news outlets in the West, like the idea that a lot more civilians are being killed. For the Westerners, "if it bleeds it leads", and there's a bonus if you want to get in some shots about how poorly the war is being run. Of course, if you interview the American troops involved, you get closer to the truth. But that's not a newsworthy story, and you don't really want to call the soldiers liars, so it's best to just stay away from them. Go for the story, not for the truth.