As for industrial policy, well, I agree with you. The EU is way too liberal in some aspect, and we could do with more regional help (we do help them modernize, I just think we ought to do more). But still, why would be bomb and break apart Yougoslavia for cheap labor when we could just have a work permit system? That theory doesn't make any sense.
Bombing a country to smithereens allows Western companies to get their hands on reconstruction contracts. The activities of KBR and Halliburton in Iraq is a perfect example. Plus, dismembering a country makes it more susceptible to political and economic manipulation and pressure.
Russian anti-Western sources' claims that the West plans to dismember Russia aren't very illogical - the West would profit more from having several puppet states in the place of Russia instead of having to deal with a united Russia. Unfortunately for the West, the horrible totalitarian dick-tator Putin objects.
You are really close for why west does shit it does.
Generally it's not only construction. There are a lot of thing, from loans the country need to take, to think like private businesses coming and buying out destroyed firms, and other things for low money than selling it. To "positive" things like moving factories to the country because of low work cost.
There is a standard procedure that almost every country that was bombard and invaded by west does. And most is coming of west firms to milk it more.
There is a very good documentary show explaining all this and giving examples of things that happend in the past on internet, will try to find it.