The Impact of Foreign Assistance on Child Welfare and Healthcare Reform in Romania, 1990-2004 a Cautionary Tale
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ABSTRACT Title of Dissertation: Curative Politics and Institutional Legacies: The Impact of Foreign Assistance on Child Welfare and Healthcare Reform in Romania, 1990-2004 A Cautionary Tale Eleanor Kennelly Gaetan Doctor of Philosophy, 2005 Dissertation Directed By: Professor Karol Soltan, Government and Politics Department Western democracies, especially the United States, increasingly utilize foreign assistance to influence the policies of developing nations (“curative politics”) despite extensive literature that this assistance is often ineffective. Cross-national data on the impact of bilateral and multilateral aid are cautionary, but these studies put the interaction between donors and recipient governments in a black box, obscuring empirical dynamics that condition success—or failure—in reform outcomes. Using a “controlled comparison” of two cases in which international donors have tried to steer reform in Romania between 1990 and 2004, this paper asks: How does foreign assistance influence the process of indigenous reform? By selecting two cases (child welfare and healthcare reform) in the same country, during the same period, macro-economic and political factors can be controlled, allowing an analysis that highlights critical differences in domestic interests, institutions, and international engagement. The dissertation concludes that foreign assistance is beneficial when credible international commitments spur difficult, complex change. However, the rational tendency of organized interests to undermine reform—especially if the extraction of rents is allowed by partial reform—is a strong countervailing current. Foreign assistance, too often fixated on teleological end-states and normative goals, is inefficient when: 1) Reform recommendations rely on national legislation, with little attention to intra- governmental bargaining, especially regarding budgets; 2) Reform plans fail to anticipate short-term “winners” and ignore financial incentives to subvert reform; and 3) Donors exaggerate the break between past and present, missing opportunities to better understand contemporary constraints as a function of historical legacies. Although the ideology of state socialism was defeated in Romania in 1989, post- communist reform left bureaucratic coordination in place, especially in the provision of public services. With norms such as the reliance on soft-budget constraints maintained, and without competition or independent monitoring to enforce accountability, outside attempts to help reorganize health services failed. Performance-based conditionality tied to credible international threats led child welfare reform beyond stalemate, although deep change in the form of employment cuts or financial decentralization was resisted. Curative Politics and Institutional Legacies: The Impact of Foreign Assistance on Child Welfare and Healthcare Reform in Romania, 1990-2004 A Cautionary Tale By Eleanor Kennelly Gaetan Dissertation submitted to the Faculty of the Graduate School of the University of Maryland, College Park, in partial fulfillment of the requirements for the degree of Doctor of Philosophy 2005 Advisory Committee: Professor Karol Soltan, Chair Professor Virginia Haufler Professor Bartlomiej Kaminski Professor John Lampe Professor Clifford Zinnes © Copyright by Eleanor Kennelly Gaetan 2005 Preface One hot Romanian morning in summer 2004, my friend Annie and I brought our nine children to the biggest, nicest public swimming pool in Bucharest. She wanted to enroll her four children in lessons; mine were already installed. We stood at the pool’s gate reading the rules regarding class size, payment, pool hours, and pre- enrollment requirements. For each rule Annie read aloud, I explained how the pool community really worked. “Two-week classes are limited to ten students per one-hour class,” she recited. There are around twenty children per class; most parents stay and watch, so it’s safe, I explained. “60,000 lei [$2 USD] per session. Payment required if student misses a class.” We pay 100,000 lei [$3.25] but never pay if we miss a class, I corrected. “Classes: 14:00-15:00. Pool maintenance: 15:00-16:00.” Not really, I said. The teachers use maintenance time as class time. That way they can teach more children. If you’re late for the 2:00 session, you stay for the 3:00, which is good for us because we’re late a lot. “Medical certificates required for each session.” Never, I contradicted again. It’s too time consuming and expensive. The teachers don’t ask for them, but they won’t let anyone who is coughing get in the pool. By the end of our exchange, Annie was really annoyed. “This is what I hate about Romania. No one follows the rules. It’s confusing and perverse,” she grumbled. Annie’s husband was an American law enforcement advisor to the Romanian government. I had heard him make similar remarks about the Romanian legal environment. In that instant, I saw how remarkably relevant my dissertation research is to real life. Within the ideal framework of pool regulations, the primary players, parents and teachers, negotiate agreements that are mutually beneficial. In exchange for more money than they are supposed to get, the teachers offer a more flexible schedule and don’t penalize students for absence. By not requiring medical certificates, transaction costs are reduced for parents, representing a savings of money and time. Parents have no financial incentive to push sick children to swim—what parent would do that anyway? The exchange is premised on significant discretion for individual teachers—who collude to offer similar pricing and pool-time arrangements—and low enforcement by pool administrators or Ministry of Sport inspectors. In terms of health and safety, the summer pool community is largely self-policed. Teachers are drawn from elite national squads, so they take pride in maintaining an attractive pool, sharing life- ii guarding responsibilities, and providing excellent instruction. As a parent, I could only assume they also knew how to manage the chlorine. Whether teachers pass along a sufficient part of their earnings to administrators who keep the water flowing, parents have no idea. The facility’s larger financial posture is beyond us and probably beyond the teachers’ understanding too. What was important was that the summer swimming lesson arrangement had achieved equilibrium. Neither parents nor teachers had any reason to abandon agreements—except Annie, for whom the pool’s reliance on informal practices suggested inadequate attention to proper health and safety controls. Similarly, as I will explore, foreign donors are often more fixated on what is wrong, technically and in terms of law abidingness, in many public policy sectors than the central government is itself. But that might be because foreign advisors are unencumbered, whereas government actors are tied to all the people already at the pool—making money, socializing, learning, and functioning within ongoing, living institutions. The interaction between well-meaning foreign advisors focused on end-states and government agents embedded in domestic relationships driven by chronic scarcity is what I am interested in exploring in this dissertation. *** For much of the time I was conducting field research on this topic (2001-2003), I was working at the U.S. Agency for International Development (USAID) Mission in Romania, first as a program development advisor, then as the senior democracy advisor. In the first position, I had to work on a five-year plan for U.S. Government assistance to Romania. In the second, I managed programs in the democracy portfolio, including USAID’s largest program in the region of support to local government. This experience convinced me that there was precious little learning on the dynamics of institutional change driving the expenditure of foreign assistance dollars. Rather, the Mission set up a framework of admirable goals—Increase Effectiveness of Local Government Service Provision; Increase Involvement of Civil Society in Local Decision Making—toward which you could only hope your field programs were heading. The origins of the intellectual inquiry that became this dissertation lie in an attempt to understand the real-world, empirical mechanisms of governance, which could help explain why the best-laid plans elaborated in multilateral and bilateral conference rooms so often appeared to take a different course in real time. I intentionally selected case studies outside the area of my professional responsibility in order to maintain a line between work and research. However, the phenomenon revealed in a closer look at child welfare and healthcare held true in the programs I oversaw for the U.S. Government—namely, a disconnect between agreements achieved between donors and central government versus program results implemented by sub-national, especially local, organizations; reform goals blocked by organizations of interest that gained authority and rent in the first stages of change; the inability of public entities to maintain hard budget constraints; and rational attempts, by organizations and iii individuals, to secure resources through the exploitation of public assets in ways that dated back to the communist era. In systems of governance far more than in public opinion or preferences, the old system was dying hard. *** My two case studies focus on important policy regimes. The health of a population is an essential aspect of any nation’s human capital; citizens are deeply concerned, with good reason, about the healthcare