MASARYKOVA UNIVERZITA V BRNĚ
Fakulta sociálních studií Katedra mezinárodních vztahů a evropských studií
Development Assistance and the Politics of Exclusion: Millenium Challenge Revisited
Karla Koutková, UČO 78777 Bakalářská práce
Vedoucí práce: PhDr. Pavel Pšeja, PhD Obor: MVES-ŽUR Imatrikulační ročník: 2002
V Annandale-on-Hudson, NY, a Brně, 2005
Svou bakalářskou práci jsem vypracovala samostatně na základě uvedené literatury, v rámci studijního pobytu na Bard College, Annandale-on-Hudson, NY, USA. Za cenné připomínky, stejně jako vhled do praktických aspektů zahraniční politiky, bezpečnosti a rozvojové pomoci, vděčím Jamesu P. Kettererovi, PhD, řediteli Centra pro mezinárodní rozvoj (CID, SUNY).
1 Abstrakt: Rozvojová pomoc vyspělých států dosáhla po půlstoletí svého vývoje pouze skromných výsledků v boji s chudobou a v plnění svých vytyčených cílů. Akademické myšlení o rozvoji spolu s reálnou zahraniční politikou na tento fakt, stejně jako na měnící se geopolitické podmínky, reaguje dvojí proměnou. Nejprve upouští od podpory ekonomického růstu jako předpokladu demokratizace a socioekonomického rozvoje a převrací tento kauzalitní vztah tak, že napříště má podpora a šíření demokratizace vést k ekonomickému růstu. Za druhé, myšlenka pomoci zacílené na vládní struktury a elity (top-down přístup), uvolňuje místo nižším jednotkám a občanské společnosti jako prvotním recipientům fondů (bottom-up přístup). Iniciativa Spojených států, Millenium Challenge Account (MCA), ukazuje ještě na jeden trend v rámci oficiální rozvojové pomoci: přístup odměny za výkon. Předkládaná práce hledá teoretické a zahraničněpolitické prameny této iniciativy, aby ukázala, že se MCA po epistemologické stránce, přes deklarovaný důraz na demokratizaci, řadí svým lineárním universalismem spíše k top-down modernizačním přístupům k rozvojové pomoci. Jak je argumentováno dále, v ontologické rovině pak vidí MCA jako dědice studenoválečného bezpečnostního diskursu do té míry, do jaké chápe šíření demokracie jako adekvátní prostředek v boji proti vnímanému externímu ohrožení. Třetí argument – exkluze – se pak vrací k MCA jako k jednomu z výrazů historického momentu současné zahraniční politiky USA, v níž se důraz na národní bezpečnost snoubí s neo- liberálním imperativem šíření ideje volného obchodu.
Abstract: During five decades of its existence, development assistance has not succeeded in eliminating world’s poverty and overcoming the widening inequality gap between the haves and have-nots. Failures to deliver socioeconomic development and changing geopolitical conditions resulted in a double shift in development thinking and policies. First, the idea of mutually reinforcing goods with economic growth resulting in the process of democratization and development was reversed with democratization as a precursor to economic growth. Second, in development thinking, bottom-up vision of development replaced previous top-down, elite centric approaches. The Millenium Challenge Account (MCA), a novel development assistance initiative of the US, envisions yet another major shift. The government sets out to encourage economic growth in a limited number of developing countries that meet the ‘Ruling justly,’ ‘Investing in People,’ and ‘Economic Freedom’ criteria as a condition for allocation of development funding. The thesis explores the academic and foreign policy roots of the MCA and argues that despite its claimed emphasis on democracy, the epistemological concept of the MCA stems rather from linear, top-down approaches pioneered by Modernization school. On the ontological level, the MCA’s underlying assumption of democracy as an antidote to terrorism is seen as a legacy of previous Cold War development initiatives. Finally, pieces of the development mosaic are put back together and the case for MCA’s politics of exclusion is being made.
2
CONTENTS:
Introduction and outline of chapters 4
1. Chapter One: Theories of Development Assistance 9 1. 1. Modernization 10 1.2. Dependency 13 1.3. Transitology 13 1. 4. Civil Society 16 1.5. Development Thinking and the MCA 18
2. Chapter Two: Genealogy of U.S. Development Assistance 20 2.1. Cold War Politics: Foreign Aid as a Means to Fight Communism 21 2. 1.1. Point Four vs. Marshall Plan: Diverging views of development 22 2.1.2. Basic Human Needs Approach: ‘Human Side of Development’ 25 2.2. Post-Cold War Politics: Democracy as an Antidote to Terrorism 27 2.2.1. Democracy Promotion in the 1990s 29 2.2.1. Post-9/11 Era: Democracy and Security 31
3. Chapter Three: MCA and the Politics of Exclusion 33 3.1. Selection Criteria: Freedom vs. Exclusion 34 3.2. Institutionalized surveillance and the Objectified ‘Other’ 36 3.3. National Security and Excluded States 37
Conclusion 38
Bibliography 41
3
“Foreign aid, as a set of productive representational practices, made possible new techniques within an overall economy of power in North- South relations. It put in place permanent mechanisms by which the ‘Third World’ could be monitored, classified and placed under continual surveillance.” (Roxanne L. Doty, 1996: 128)
“Countries that live by these three broad standards—ruling justly, investing in their people, and encouraging economic freedom—will receive more aid from America. And, more importantly, over time, they will really no longer need it, because nations with sound laws and policies will attract more foreign investment. They will earn more trade revenues. And they will find that all these sources of capital will be invested more effectively and productively to create more jobs for their people. (…)[I] challenge other nations, and the development banks, to adopt this approach as well.” (George W. Bush, NSS 2002)
INTRODUCTION AND OUTLINE OF CHAPTERS
th On March 14 , 2002, President George Bush, during a speech at the Inter- American Development Bank, called for “a new compact for global development, defined by new accountability for both rich and poor nations alike.” (Bush 2002) He said that greater contributions from developed nations should be linked to greater responsibility from developing nations. (Bush 2002) During this speech, Bush also declared that the “advance[ment] of development is a central commitment of American foreign policy.” (Windsor 2003: 145) As a programmatic realization of this new compact for global development, President Bush proposed the Millennium Challenge Account (MCA), designed to “reduce poverty by significantly increasing the economic growth trajectory of recipient countries.” (Windsor 2003: 145) The MCA was passed as the Millenium Challenge Act
4 of 2003 and began operation in fiscal year (FY) 2004. (MCA) As a reaction to the UN’s Millenium Development Goals (MDGs), this act proposed an increased level of development funding that would be allocated through its programs. President Bush proposed a 50% rise in development assistance by fiscal year 2006, resulting in a net increase of $5 billion dollars. (Radelet 2003b) One of the novelties that this initiative proposes is the way funding is allocated through specific criteria and methodology used to determine countries’ eligibility. The MCA relies on sixteen indicators of policy performance within countries that fall into three broader policy categories – ‘Ruling Justly’, ‘Encouraging Economic Freedom’, and ‘Investing in People’. (MCA) All eligible countries must achieve a better than median performance on more than half of the indicators in each of the three designated assessment categories. Additionally, a candidate recipient must score above the median on the corruption indicator. (MCA) Furthermore, according to the original Act, a country is only eligible for assistance if its per capita income does not exceed $1,415. In 2005, the 1 pool of the eligible countries was enlarged with lower middle income countries 2 3 (LMICs) whose income ranges between $1,415 and $2,975. (CGD 2005) The sixteen eligibility indicators (see Chart 1 below) of the MCA seem to put an unprecedented emphasis on democratic practices as pre-requisites for aid. The MCA has been quoted as being a “democracy dividend” that will work to support countries struggling to provide increased social and economic growth under weak democratic systems. (Windsor 2003: 145)
1 The administration originally proposed a rapid expansion of the group of eligible candidates to compete for MCA funding during the program’s first three years (FY 2004 -FY 2006). In FY 2004, countries with per capita incomes below $1,435, which were also eligible to borrow from the World Bank’s International Development Association (IDA) were eligible for the MCA. There were 74 countries, including all but 7 of the 81 IDA-eligibles. In FY 2005, the IDA-eligibility criterion was dropped and 13 countries were added to the group. In FY 2006, the group will be expanded to include a group of 115 lower middle income
2countries between $1,435 and $2,975. (CGD 2005) These countries will compete separately from the countries with per capita incomes below $1,435, meaning that distinct median scores will be calculated for this group, which they must surpass to qualify.
3(CGD 2005) Adding this group of countries raised significant concerns. First, by adding these countries, less funding will be available for the poorest countries. Second, this new group has larger alternative sources of financing available to it, and third, there is a risk hat the allocation of MCA funds be allocated based on political and strategic criteria rather than the announced MCA criteria. (Radelet 2003b: 27)
5 Indicator Source/Arbiter I Ruling justly 1 Control of corruption World Bank Institute 2 Rule of law World Bank Institute 3 Voice and accountability World Bank Institute 4 Government effectiveness World Bank Institute 5 Civil liberties Freedom House 6 Political rights Freedom House II Investing in people 7 Immunization rate: DPT and measles WHO/World Bank 8 Primary education completion rate World Bank 9 Public primary education spending/GDP World Bank 10 Public expenditure on health/GDP World Bank III Economic freedom 11 Country credit rating Institutional investor 12 Inflation IMF 13 Regulatory quality World Bank Institute 14 Budget deficit /GDP IMF/World Bank 15 Trade policy Heritage Foundation 16 Days to start a business World Bank
Chart 1: Eligibility criteria of the MCA. (Sources: Radelet 2003b, Soederberg 2004)
While previous initiatives and more traditional agencies (e.g. the USAID) have 4 often been criticized for a multiplicity of goals and unclear priorities (Radelet 2003b, Kolbe 2003, Carothers 1999), perhaps one of the key distinctions of the MCA is the narrow focus of its program objectives to specifically provide support for economic growth, as well as its limited geographical reach to provide aid to a relatively small number of low income countries that have already taken initiatives to design development policies. (MCA) “Aid can be more effective if it is focused on nations with governments that are committed to establishing policies and institutions conducive to economic growth and poverty reduction.” (Radelet 2003b) According to policy analysts in support of the MCA’s performance-based approach, it appears natural that countries that already place a high premium on
4 One of the most criticized elements of American foreign aid is the broad approach programs have taken to development goals. Programs are notorious for having numerous goals that result in poorly coordinated efforts to implement a wide range of programs that do not serve the same ends. USAID is said to be a prime example of this overload, with 33 different goals and 75 priority areas of aid. (Radelet 2003b)
6 development would in turn yield successful programmatic results from additional developmental support from outside donors. Following this logic, countries which are either corrupt or lack an infrastructure that values development initiatives would result in minimal success from developmental aid, with large portions of funding being funneled off into government officials’ pockets. (Radelet 2003a) 5 On the other hand, main critics of Millenium Challenge address the issue of a certain type of exclusion, both in terms of lack of consensus on the sixteen selectivity criteria among the donor and recipient countries, and in terms of the limited number of countries the MCA engages with. Fundamentally, the MCA does not propose a clear rationale for aiding countries that perhaps are in the most need of assistance: those countries that perform lowest in the categories of ‘Ruling Justly’, ‘Investing in People’, and ‘Economic freedom.’ The MCA is designed primarily as an incentive and reward for countries that already show a median level of democratic performance. The idea of country selectivity – in which aid is focused on a select group of countries with good policies and institutions – has gained currency in aid programs in recent years. (Radelet 2003a) This idea is based to a large extent on the research of World Bank economists Craig Burnside, David Dollar, and Paul Collierwho show that aid has a positive relationship with growth in countries with good policies and institutions and little 6 or no effect in others . Collier and Dollar 2002, and World Bank 1998) The research on the relationship between aid and economic growth, however, is hardly unanimous in its conclusions. Some studies find a positive relationship between aid and growth, others 7 find no relationship at all, while still others find that aid has a negative impact on growth In light of the MCA’s explicit focus on strengthening economic growth while awarding the best performing countries, it seems appropriate to attempt to trace the cornerstones of this current developmental initiative. This question gets to the core of addressing the issue of exclusion where certain types of knowledge and political outcomes are encouraged while others are being excluded from the developmental
5 For a recent debate on MCA, see Radelet (2003), Kolbe (2003), Brainard (2003), for a critical, historical-
6materialist position, cf. Soederberg (2004). See Burnside, Craig and David Dollar (2000). Aid, Policies, and Growth, American Economic Review, vol. 90, no. 4, pp. 847-868, or Collier, Paul and David Dollar (2002): Aid allocation and poverty
7reduction, European Economic Review, vol. 46, no. 8, pp. 1475-1500. See Mosley, Paul, John Hudson and Sara Horrell (1987): Aid, the Public Sector and the Market in Less Developed Countries, Economic Journal, vol. 97, No. 387, pp. 616-41.
7 discourse. Chapter one will do so in that it will examine four major theories of development assistance and the double shift they outlined: first, a move from a causality relationship between economic growth and democracy, where one replaced the other, and second, the issue of allocation methodology and the interplay between top-down and bottom-up approaches to development aid. Examining the interplay between these four approaches will be an essential first step in order to trace the intellectual roots of contemporary development assistance, such as the MCA. While some authors, including Thomas Carothers (1999) argue that academic thinking, foreign policy and development aid practice are separate realms, I will contend otherwise – in line with the epistemological level of post-developmental 8 thinking – that knowledge and power are inseparable and that knowledge helps create a discourse in which the reality of the ‘underdeveloped’ is formed and where development aid practice operates. (Escobar in Esteva 1995) Chapter two will link this debate and the subsequent assessment of the MCA within the discourse of development thinking with the actual development policies implemented by the U.S. government since the World War II. For purposes of this work, we will contrast several moments in the Cold War and post-Cold War development assistance: the beginning of the development era outlined by Harry Truman, evolution of the Basic Human Needs approach in 1970s, and the Clinton era with the post-Cold War politics concentrated on democracy promotion. In an epoch of U.S. foreign policy which defines itself by largely pre-emptive responses to terrorist attacks of September 2001, (NSS 2002), idealistic zeal over democracy promotion from the Clinton era meets the Cold War rhetoric of democratization as a means to fight Communism, hereafter as a means to prevent terrorism. Third legacy, the one of the Basic Human Needs steps in where disenchantment over failure in Vietnam and limited financial means brought about
8 Post-developmental thinking, indebted to French post-structuralism, is interested in a discourse where ‘development’ operates and in the ways the actors, identities and modes of reality are modeled by the development ‘science’. Its prime methodological tool is a discoursive analysis. While epistemological post- developmentalism focuses only on the analysis and genealogy of the developmental discourse (Gronemeyer, Escobar and others in Esteva 1995), standpoint post-developmentalism has a normative ‘project’ in that it envisions certain actors – such as social movements deemed to return agency back to the hands of the ‘underdeveloped’ subject. (Illich, Esteva and others in Esteva 1995).
8 9 policies focusing on poverty as a criterion for Aid . As will be argued, ideologues of these policies have made up for what one could see as the U.S. development assistance heritage shaping current initiatives, such as the MCA. Chapter three will subsequently add a third dimension and the last argument of this thesis which puts pieces of the MCA discourse back together and assesses them as a whole. Having elaborated on academic and security underpinnings of current development initiative, it will hold that certain selection criteria, such as ‘Encouraging economic freedom’ (i.e. adherence to a certain ideology based on free trade and market openness) as the underlying imperative of the MCA not only helps to make the world “safer and better” (Bush, NSS 2002) for the United States, but also creates an environment of exclusion where a central authority is being put aside from the objectified ‘others’ in order to hierarchize, measure, and control the outer world.
1. CHAPTER ONE: THEORIES OF DEVELOPMENT ASSISTANCE
“Theory does not express, translate or serve to apply practice. It is practice.” (Foucault in Bouchard 1977: 208)
Scholarly work on development has to a large degree shaped the developmental discourse and actual foreign policy outcomes. (Peet 1999, Escobar 1995) Apart from providing substantiated rationales on which development aid projects have been implemented, it also serves as an intellectual pool where ideas about development emerge and meet socioeconomic reality of the ‘underdeveloped.’ (Escobar, Esteva) As some development aid practitioners suggest (Carothers 1999), there is a linear path in the development of development thinking, a ‘learning curve’ (Carothers 1999) which enables development assistance practitioners to learn from previous mistakes and adhere to new ideas. However, as some dissenters argue (Roberts 2004: 118), development thinking and subsequent policies have not always followed this learning curve, they have rather performed a minuet, (Roberts 2004) in that despite their failure to deliver what they
9 MCA, by its defining characteristic of a performance-based approach, does not explicitly focus on fighting poverty where it is most needed. In its ‘Investing in people’ criteria, however, it takes after the Basic Human Needs Approach in that it addresses the issues of primary education access, immunization rate and public health expenditures. (Cf. CGD 2005, Radelet 2003b)
9 envisioned as ‘development,’ old causal relationships persisted and continue to shape new initiatives. As will be argued in the following chapter, four schools of thought have had a significant influence on development aid thinking since they envisioned different paths and allocation strategies leading to development. As I outline in Chart 2, emphasis on economic growth as a precursor to democracy development is common to the Modernization School and its critique, Dependency School, while the latter schools reverse this causal relationship and see democracy assistance as stimulating subsequent economic growth. While Modernization and Transitology share a top-down approach towards the allocation of aid, Dependency and Civil Society attempt for empowerment on the local level. Having presented the Modernization, Dependency, Transitology and Civil Society schools, I will then intend to trace intellectuals roots of the MCA initiative, contending that the emphasis on West-based values, unilateral prescription of desired policies and a top-down approach link MCA with the epistemological conception of Modernization school, while on its ontological level, in terms of emphasis on democracy and good governance, ‘younger’ approaches of development could claim their heritage.
Top-down Bottom-up
Economic Development Modernization Dependency
Democracy Assistance Transitology Civil Society
Chart 2 – Four schools of development assistance.
1. 1. MODERNIZATION
“‘[B]ackwardness’ of the Third World was an ‘original’ backwardness, a primeval backwardness that had once been universal and could be overcome by the transmission of capital and know-how from the industrial West” (Leys 1996: 110)
10 10 Modernization theory attempts to explain Third World countries’ levels of development and growth in relation to modernized countries. It “spelt out the implications for the geography of a global system divided into centers of modern progress and peripheries of traditional backwardness, with the center showing the periphery its future.” (Peet 1999: 165) This theory of modernization presupposed the existence of a continuum between Westernized capitalist countries and so called underdeveloped Third World countries. It was believed that all economic and social development lay on a single timeline, with different countries and areas of the world lying at different points. Western Europe and Northern America lay at the end of the timeline with capitalism and democracy as the final evolution in the process of modernization. The Third World had been posited as deficient and the US as capable of transforming deficient nations through the exportation of their own historical process of cultural and political evolution. This gave the U.S. strategic agency and power. (Latham 2000: 5) As a theory it said that economic development could produce the conditions for democratization, meaning that countries plagued by undemocratic regimes, specifically authoritarian ones, could be transformed through economic development. In addition to providing optimism for economic development and democratization, modernization provided a scientific rationale for American foreign aid, which increased its legitimacy 11 by providing quantifiable and concrete measures of development . (Lipset 1960) If average per capita income was an indicator of levels of democracy, then programs aimed at an end goal of democracy promotion could target programs at increasing per capita income. In this way, economic development was rationalized as precursor for
10 Modernization school gained wide acclaim in the 1950s and remained influential for two following decades. It became the basis for U.S. policies on economic development in the Third World. Within this theory, development could be achieved through the infusion of Western capital and technology. For key writings of modernization cf. Rostow (1960), Lipset (1960). More on modernization school and its critiques 11cf. Peet (1999), Lewellen (1995), Leys (1996). The landmark of modernization school, Seymour Lipset’s Political Man, postulated that democracy could be achieved if economic development was pursued in a country. This was a substantive rationale for American foreign aid. If average per capita income was an indicator of levels of democracy, then programs aimed at an end goal of democracy promotion could target programs at increasing per capita income. In this way, economic development was rationalized as precursor for democratization and economic development became rationalized through modernization theory as an advantageous explanation grounding U.S. political interests. (Lipset 1960, Latham 2000: 65-72)
11 democratization and economic development became rationalized through modernization theory as an advantageous explanation grounding U.S. political interests. (Lipset 1960) Another important function of modernization theory was its ability to explain a global process of change and the way in which the United States could act in order to influence a specific evolution of that change. “Modernization [theory] reinforced the connections between U.S. strategic concerns and assumptions about America’s role as a moral, benevolent world leader (…). [It] also framed an appealing identity for America as a progressive nation assisting others in their fight against poverty, oppression, and debilitating fatalism”. (Latham 2000: 67) It served to unite Americans under a specific worldview giving Americans a collective cultural character in relation to other countries. It gave Americans an identity of power and recognized the way in which their power could be used abroad to promote change reflected in their own image. (Latham 2000: 68) This process of cultural identity formation rooted in theory began to fuse American values and the U.S. strategic political interests. Modernization theory gained momentum as a rationale for foreign aid because it was successfully able to make this fusion. Modernization was also successful because its objectives were easily incorporated 12 into political rhetoric . It was not until the Kennedy’s administration, however, that modernization theory gained real momentum. By the time Kennedy took office, it was often proclaimed that modernization would improve the United States’ capabilities of being victorious in the Cold War. (Latham 2000: 7) The Kennedy administration made an important movement towards incorporating theory into policy. Many preeminent scholars of modernization left their positions in the academy to work for the 13 government . With scholars moving in and out of politics, it becomes obvious that scholarly work, such as modernization theory, played an important role in the evolution of policies.
12 As we shall see later, this was evidenced by Harry Truman who announced his fair deal policy during his inaugural address. In 1949, when Truman was inaugurated, Modernization theory was just on the cusp of
13gaining mainstream acceptance as a way of understanding Third World development. (Latham 2000: 68) Many scholars made the transition from academia to politics: Walt Whitman Rostow left his position at MIT to take on a job as a White House national security adviser; Lincoln Gordon chose to leave Harvard University for a position on Kennedy’s Latin America Tas Force; and, Lucian Pye, another professor of MIT, served as an adviser to USAID. (Latham 2000: 7)
12 1.2. DEPENDENCY
14 Dependency theory , heavily influenced by Marxist thought, approached the relationship between economic development and democratization in the opposite way than modernization did. Whereas modernization presupposed a universal timeline of development, dependency refuted the claim of the inevitability of economic development 15 leading to capitalist democracy . Coming from Latin America, dependency theory was premised on the idea that the development of economies at the center was dependent on the exploitation and underdevelopment of countries at the periphery. (Leys 1996: 113) In modernization, it was thought that both capital and technology originating from highly modernized nations would be transferred to the metropolitan centers of Latin America, in turn producing a breakdown of the feudal to the capitalist system as such resources trickled down from the urban centers to the rural countryside. (Munck 1984: 9) Dependency theory refuted this conception, stating instead that the capitalist system artificially imposed on Latin America creates underdevelopment, not development. Instead of a trickle down effect from urban to rural, “the poverty of the countryside is reinforced by its relationship to the city and the outside world.” (Munck 1984: 9) It is important to note that while dependency emerged as a contradictory theory to modernization, simultaneously, in development policy the old system was being replaced with a new ‘basic human needs’ approach. Both development theory and development policy in the 1970s were in reaction to shortcomings and failures of their respective counterparts from earlier decades. (Leys 1996: 115)
1.3. TRANSITOLOGY
14 For Dependency school manifesto explaining the departure from modernization school, cf. Valenzuela and Valenzuela (1978), Dos Santos (1970). For other key dependencista thinking, cf. authors within ECLA such as Raul Prebisch (1950), reviews in Smith in Kohli (1986), Evans in Deyo (1986). Ronaldo Munck (1984) sees the following points of departure between dependency and modernization theories: ‘nature of 15society,’ ‘nature of progress,’ ‘nature of ruling class,’ and ‘development.’ (Munck 1984) However, it is important to note that dependency theory did not outright eliminate the possibility of economic development leading to democratization, but rather suggested that the specific form of dependant development, as was taking place under modernization, would not form the economic foundations for democratic transitions. For economic growth to lead to democratization, dependency theory insisted that independent domestic development had to occur. (Leys 1996: 114-115)
13 Modernization theory presented a clear theoretical explanation for the emergence of democracy. Modernization said that democratization would occur as a result of economic development. Dependency theory refuted this claim, but presented no new explanation of how democratization evolved, sending theories of democratization into an academic abyss. This presented a major crisis in the developmental paradigm that rested on the positive outcomes of economic growth. In addition, the third wave of democratization presented serious challenges to the notion of economic preconditions for democracy because many countries transitioned without previously reaching high 16 economic growth . 17 As a result, transitology , a new elite centric vision of democratization emerged. This framework contended that the rise of democracy was less dependent on structural variables, such as economic growth, and more dependent on the capabilities of political elites. (Diamond 218) This granted significant power to political actors, minimizing the previous emphasis on economic development, which had produced only moderate results. 18 The process of regime transition has been placed at the center of analysis in regards to the emergence and consolidation of democracies which emphasized the actual process of change rather than peripheral conditions such as economic development, which were central to modernization theory. Supporters of this school suggested that “democracy is 19 created rather than born as the natural result of a transition” . (McFaul 2002: 214) As transitology made democratization universally accessible, democratization became a strong foundation on which to rest development ideology. Economic development as pre-condition, and thus a basis for development, was largely negated by
16 This is not to say, however, that there were no cases of democratic transition that did support the idea of sequencing, placing economic development before democratization. Chile was the most notable example. Military leaders under the authoritarian regime pursued economic reform before the subsequent rise of democratic governance. However, Chile is by and large seen as the exception and most cases in fact
17challenged economic sequencing argument. (Encarnacion 2003: 46) Transitology is an ‘actor-center’ theory of democratization that focuses on the power of political elites and their interaction in crafting a democratic transition, giving agency to individuals rather than popular mobilization. Fathers of the intellectual tradition of transitology school are Diamond (xxx), Kholi (1986), Bermeo (1997), Johnson in Deyo (1987), Haggard and Webb (1984), O’Donnel and Schmitter (1986). For
18more on transitology and development assistance, cf. Anderson (1999), McFaul (2002). The most widely accepted of definition of ‘transition’ describes it as a “period of time between the breakdown of one regime and the emergence of the next, either democratic or not.” (O’Donnell and
19Schmitter 1986: 12) This is an important element of transitology because it provides optimism about the prospects for democratization, which had been lacking during the 1970s with the advent of dependency theory. (McFaul 2002: 214-217)
14 transitology’s universalist approach to democracy, and presented a pivotal moment in the reconstruction of fundamental rationales for development programs. It is during this time that we began to see the advent of programs aimed at democracy assistance. (McFaul 2002: 216) There is an important connection to note between transitology’s elite centric focus and the subsequent elite centric approach of democracy aid. USAID provided initial democracy assistance directly to government in a top down structure. Both transitology and top down assistance assumed that too much popular mobilization and too much pressure from below can spoil the chances for democracy. (Bermeo 1997: 305) The most common indication that a transition is underway is the advent of liberalization, in which members of the authoritarian regime begin to provide more rights to individuals, albeit in varying degrees. The way in which liberalization occurs, and the initial effects it has, become forth telling as to the way the rest of the transition will 20 unfold . (O’Donnell and Schmitter 1986: 6-7) 21 The type of transition a country undergoes in turn dictates what type of democracy that country will experience. This is important because it proposes a rationalized order to the process of democratization. Because of this, transitology was easily justifiable as a rational basis for U.S. assistance. The linear explanation that transitology presents says that each type of transition produces a subsequent government 22 with generalized characteristics. Transitology says that breakdown A will lead to transition B, which will result in government C. (Bermeo 1997: 302)
20 The way the transition unfolds in turn suggest the prospects for the type of democracy and the success therein such a government will have. This process from regime collapse to democratization rests at the
21heart of the theoretical composition of transitology. (O’Donnell and Schmitter 1986: 13) Four types of transitions were outlined: from above, from below, pacted transitions, and transitions 22through external imposition. (O’Donnell and Schmitter 1986: 26-58) Transitions from above are expected to create gradual and stable change. These transitions are the longest and result in highly compromised violators, in large part due to the remnants of the old regime in the new government. In contrast, transitions from below are the fastest. However, they can be the most unstable having the highest prospects for resulting in the rise of another dictatorship rather than a democratic government. Third type, pacted transition, is supposed to be the most effective and safest way to ensure democracy. There are, however, problems with democratic governments resulting from pacted transitions. In such transitions, it is often difficult to purge the old regime because the old regime is a partner PLUS they marginalize social movements, which in the long run has a negative effect on democracy. (Kholi 1986, Bermeo 1997, O’Donnell and Schmitter 1986)
15 As transitology served to ground development ideology in democratization it is easy to see the ways in which programmatic implementation reflected such theorizing. Transitology held an elite centric vision of democratization that gave agency to political actors and institutional structures. The United States’ top down approach focusing democracy assistance on political elites and institutional reform fit well with transitology’s elite centric focus. The US was more interested in promoting change through political elites because there was a fear that promoting change through popular mobilization was more likely to result in leftist revolution. Therefore, during the Cold War, when elite centric action was considered safer, transitology provided a theoretical justification for such action. As a legacy of the conceptual framework surrounding the MCA, Transitology was seminal in two ways: first, it provided a rationale for grounding democratization as a precursor to economic growth and development. Second, by nature it was a top down theory which reinforced U.S. programs of top down democracy assistance during the 1980s.
1. 4. CIVIL SOCIETY
As a theory of democratization, transitology effectively negated the possible role of civil society in fostering political change, or transition from authoritarian regimes to democratic ones, by contending that regimes fell, not because of opposition to governance, but as a result of failures of the regime itself. (Kholi 1986: 15-18) This view diminished the role of collective action in creating fusions that may have lead to the fall of authoritarian regimes. Transitology disallowed the possibility of collective action or social movements as political actors, and rather hinged all democratic possibilities on the potential of political elites. This was an effective theory during the first decade of democracy assistance, but as top down approaches of elite centric action proved to produce only moderate development results, their was a movement to reconceptualize the process of democratization and the ways in which democracy assistance could be exercised to promote change.
16 23 As civil society emerged as a different approach to democratization , early critiques appeared, contending not that the theory of transitology was necessarily wrong, but that the theory did not take into account the possible origins of influences on political 24 elites . This indicates that transitology did not account for the possibility of pressures exerted on political elites by the working class that could have influenced elites’ political decisions and actions. During the 1980s a number of important factors coalesced bringing about a new interest in civil society as a viable means of promoting and sustaining democracy. Most notably perhaps were the dissident and oppositional resistance movements that emerged in Eastern Europe in the late 1980s. Civil society came to be conceptualized as “nonviolent but powerful, nonpartisan yet pro-democratic.” (Carothers 1999: 207) Some 25 reasons for this paradigmatic shift were, however, less academic . Second, a decrease in the aid budget made civil society a more viable means to achieve democracy promotion because, civil society programs operated on smaller budgets. All of these factors together were influential in promoting a strong interest in American foreign assistance and democracy promotion towards the support of civil society. (Carothers 1999) 26 Civil society is an important case where it is particularly hard to determine whether U.S. policy was first influenced by scholarly work that brought about policies that supported it, or, if the political landscape changed in such a way that practitioners turned towards academic theory as a result of already changing political patterns, While this distinction is unclear, it is obvious that as the geopolitical landscape changed, so did the theoretical focus on democratization. As civil society became more prominent in supporting democratic transitions, so did the literature explaining its significance.
23 For discussion on civil society and democratic assistance see Carothers (1999), Ottaway and Chung, Anderson, Carothers. World Bank analysts Woolcock and Narayan (2000) write about social capital as a grounding for development aid policies, which actually resulted in paradigmatic shift and a ‘civil society
24revolution’ inside the World Bank Collective actors have played pivotal roles in the transition process. (Berins and Mahoney xxx) And in Peru, Argentina, and Spain “union-led protest were crucial in destabilizing authoritarianism and opening
25the way for democratization.” (Anderson 1999: 287) During the Clinton administration, an influx of aid personnel moving from the NGO sector into positions
26at USAID, acting as acatalyst to a new focus on supporting NGOs as part of democracy promotion. By definition, civil society is hereafter referred to as “sphere of social interaction distinct from the economy and state, characterized by voluntary association.” (Putnam 1992: 12)
17 Therefore, civil society seems to be a case where a particularly strong interactive relationship exists with politics and theory mutually reinforcing one another. However, the Civil Society’ impact on current ODA initiatives remains unclear. As is the new trends set by the MCA make clear, empowerment, participation and other buzzwords of the late 1990s have slowly been shut out of the development discourse in order to pave the way for more coercive means and return to top down elite centric approaches.
1.5. DEVELOPMENT THINKING AND THE MCA
As has been argued, Modernization theory was successful and influential in that it united American values and perceptions of national identity with U.S. strategic interests, particularly as related to the Cold War and the defeat of Communism. Since modernization theory prescribed a universal timeline of development, of which the U.S. lay at the ending stage, by nature modernization supported a vision in which Communism could not thrive if all nations were to develop to their fullest capacity. Modernization theory also gave the U.S. much agency and power, because it envisioned development through a U.S. directed effort of infuse Third World countries with a Western history of development. (Leys 1996: 110-115, Latham 2000: 95-112) By the end of 1960s, when Modernization became conceptually rejected, evolution of new paradigm – Dependency – offered to transfer agency back to the hands of the developing subject. As was later suggested, though, the system of import substitutions did not prove to be substantially viable and relieving the situation in the “underdeveloped” areas of Global South. While Dependency attempted to be a major intellectual antidote to Modernization, it used its rhetoric and emphasis on economic development modeled by the West. In the light of a failure to deliver the promise of economic development that would consequently lead to democratization in the Third World, development paradigm underwent a major shift: ‘economic development’ and ‘democracy’ were reversed in the causal relationship. New paradigms replaced them with democracy-building efforts, first
18 through supporting strong and democratic elite in its state-centric, top-down approach, then through civil society engagement and its participatory, bottom-up characteristic. Looking at the MCA from the perspective of these approaches while attempting to trace its theoretical roots, we can find points of agreement with most of the West- dominated schools of development. While modernization in its purely technical sense of capital investments and technical assistance has been refused as incompetent in delivering development, its underlying premise of linearity in development along a single, U.S.-pioneered path persisted and guides development initiatives in the new millennium. Modernization envisioned a linear path to development, following the path of the United States and leading from a capitalist free-market economy towards a glowingly liberal, democratic government. (Latham 2000: 101) In a similar manner, the underlying assumption of the MCA has it that the USA itself is authorized to decide on what kind of development is desired. While an emphasis on democratic government is pushed through under the ‘Ruling justly’ heading, comprising six criteria of ‘Control of corruption’, ‘Rule of law’, ‘Voice and accountability’, ‘Government effectiveness’, Civil liberties’ and ‘Political rights’, the same applies to the ‘Economic freedom’ rankings. While some might argue that ‘democracy’ is being assigned an unprecedented position within the country selection criteria, the required IMF’s passing grade on inflation and budget deficit, as well as World Bank’s supervision of ‘Days to start a business’ criterion and Heritage Foundation’s ‘Trade policy’ make it impossible for a country with ‘good governance’ intentions to choose an alternative path of economic development. More significantly, in spite of the claimed adherence toward the outlined criteria, the right reserved to MCA officials to make private considerations and to allocate the funds on grounds not specified in the compact, makes MCA a Modernization enterprise in that it allows the administrative to fight its strategic enemies through the allocation of development funding. As will be discussed later, pre-emptive development (Soederberg 2004) of the modernization era where promotion of neo-liberal economy was believed to constrain communism, has been replaced with pre-emptive development of post-9/11 era where promotion of democracy (and neo-liberal economy) is believed to constrain terrorism. (NSS 2002)
19 Even though we can see some of the MCA selective criteria as being inspired by bottom-up approaches of Dependency and Civil Society, such as the ‘Investing in People’ criteria which might well be inherited from J.F. Kennedy’s Basic Human Needs Approach guided by Dependency theorists, the glaring disparity between what is being preached and how it is being achieved (i.e. between the ends and the means) does not comply with the proclaimed ideals of ‘empowerment’ and ‘participatory development’. Furthermore, as Soederberg (2004: 67) points out, civil society is slowly being shut out of development issues as the government along with the MCA initiative moves to grant more contracts to private companies instead of non-profit organizations. While a counter-argument would have it that it is the underdeveloped countries themselves who submit project proposals and who decide to be evaluated by the MCA’s Board, it is, however, the prescribed ‘economic freedom’ that guides the Board’s decision upon which countries are graded and selected for funding. In its top-down approach, modernization theorists as well as the MCA initiative deny agency to the developing object in that they prescribe a certain path of development. The argument that Modernization school could be seen – on its epistemological level -considered the intellectual father of the MCA initiative will be further supported in the following chapter outlining three moments in the genealogy of the U.S. postwar development assistance.
2. CHAPTER TWO: GENEALOGY OF U.S. DEVELOPMENT ASSISTANCE
Having placed the MCA initiative within an academic debate on development assistance, it is now essential to show the contextual embededness of development assistance initiatives within the broader discourse of strategic interests of the United States. Thus, the aim of the following chapter is to outline three decisive moments in post-war U.S. foreign policy in order to contextualize the current initiative, and to support the argument of mutually reinforcing dynamic between development thinking and policy making in relation to shaping the actual development assistance projects. It will be argued that the MCA responds to similar imagined security threats as the US were facing
20 27 throughout the Cold War era and faces them with a legacy of development assistance as a means to challenge perceived danger, emphasis on poverty alleviation and human needs as a self-conscious means to partially relieve the widening inequality gap, and zealous promotion of democracy and liberty as universal moral values. (NSS 2002)
2.1. COLD WAR POLITICS: FOREIGN AID AS A MEANS TO FIGHT COMMUNISM
First of all, it is important to note that from the late 1940s through the early 1970s, American foreign assistance and development objectives were based on supporting U.S. geopolitical and strategic interests through a paradigm of economic development in which they reflected the guiding assumptions of modernization theory. Three major 28 concerns directed U.S. assistance during this time: the expansion of world trade by deepening U.S. markets abroad, perceived security threats and interests based on Cold War politics of strengthening anti-communist governments, and to a lesser extent the promotion of political democracy. (Packenham 1973: 63-68, Carothers 1999: 31, 72) Each U.S. interest was intricately connected with an economic rationale for achieving the given goal. In the first case, it was thought that deepening U.S. markets abroad would result from an increase in industrial activity and a more effective utilization of resources and labor in other nations. Economic growth in the Third World would lead 29 to domestic growth of the economy in the United States . (Packenham 1973: 36) Second, in light of the Cold War, the US had strong interests in strengthening anti-communist governments abroad. It was widely accepted that poverty fostered an environment in which Communism could thrive. (Packenham 1973: 40) Therefore, it was necessary to develop resources, infrastructure, and capital within a country in order to ensure security and independence resulting in a realization of U.S. security goals. Third, it was
27 This is not to say that the nature of imagined threat is the same. While containing and deterring Communism meant dealing with a comprehensible state-based enemy, the phenomenon of terrorist threat
28remains incomprehensible to state-centric thinking in that it does not reside in any particular nation-state. All of these geopolitical and strategic interests of the US were strongly based on the conception that economic development became the core rationale for American foreign assistance policies and
29development strategies. (Packenham 1973: 68) The Truman Doctrine and the Marshall Plan are U.S. policies built strongly on this rationale/belief.
21 commonly believed that economic development provided the foundation for the 30 emergence of democratic governance . (Lipset 1960) Programmatically, economic development and hence U.S. geostrategic interests were thought to be achieved most successfully through the infusion of technical 31 assistance , capital investment, and infrastructure development from the First World into developing countries, or countries in Europe recovering from the aftermath of WWII. Technical assistance and capital investment as economic development strategies in their operational and programmatic form were often manifested as projects of infrastructure 32 development . This economic paradigm of development made the basic assumption that raising the national per-capita income in a country would result in the trickle-down of benefits from the wealthiest citizens to the poor majority. This was motivated by U.S. interest of expanding markets, increasing security, and to a lesser degree promoting democracy insofar as democracy appeared conducive to fighting Communism.
2. 1.1. POINT FOUR VS . MARSHALL PLAN : DIVERGING VIEWS OF DEVELOPMENT
“[W]e must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. (…) I believe that we should make available to peace-loving peoples the benefits of our stores of technical knowledge in order to help them realize their aspirations for a better life. And, in cooperation with other nations, we should foster capital investment in areas needing development (…) with the cooperation of business, private capital, agriculture, and labor in this country, this program can greatly increase the industrial activity in other nations
30 While fostering democracy was not a primary goal for the US during the Cold war, the idea that economic growth and political democracy could develop side by side did have at least an ideological
31impact on U.S. policy, particularly during the Kennedy administration and the Alliance for Progress. Clifton Wharton defines technical assistance as “sharing of scientific and technical knowledge and skills among peoples of different nations – helping each other adapt and use such knowledge and skills to achieve greater productivity and better utilization of resources in order to increase incomes and establish higher
32levels of living. (1958: 110) For example, in 1954 the United States contributed to bilateral development programs in Latin America providing aid in areas such as health and sanitation, education, agriculture, public administration, industry, mining and labor, and transportation, among others, totaling more than $22 million. Bilateral programs funded by the US in Latin America were often coupled with development loans from the Export-Import Bank. These loans focused primarily on the building of “railroads, highways, electric power plants, irrigation workds, city water and sewage disposal systems, telecommunications, [and] storage facilities,” with the purpose of supporting economic development and hence U.S. interests that flowed from such growth. (Wharton 1958: 119)
22 and can raise substantially their standards of living. (…) Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modern scientific and technical knowledge.” (Harry Truman, Inaugural Address)
It was a matter of course for Truman that the US – along with other industrialized nations – was at the top of the social evolutionary scale. For many scholars, the age of development began on 20 January, 1949, when Harry S. Truman for the first time declared, in his inauguration speech, the Southern hemisphere as ‘underdeveloped’ areas’. (Harry Truman, Inaugural Address) In summer of that same year President Truman addressed the Congress about his program of foreign assistance. The fourth point of Truman’s address became known as the Point Four Program , which focused U.S. foreign assistance to Third World countries on the infusion of modern technology and capital. As one of its main focuses, the Point Four Program mandated the authorization of “a worldwide expansion of technical advisory missions in such field as health, education, and industrial development.” In his address, Truman emphasized that both poverty and economic underdevelopment in the Third World presented serious obstacles to the entire world. He claimed that the introduction of modernization, through technical industrialization and the infusion of Western forms of government, had transformed the Third World making it a formidable palette to mold into the international community. Most importantly, Truman identified economic development as the linchpin of Third World advancement towards democratic ideals, and concluded that without a strong economic basis for growth “they” (being either the people of the Third World, or the Third World itself) would fall prey to a corrupted form of progress governed by absolute power rather than democracy. (Harry Truman) On top of the modernization school’s rationales, it was strategically advantageous to promote economic growth as the primary focus of development over democracy because as Communism became an increasing threat it was necessary to build anti-communist allies, many of which were not democratic. The focus on stimulating economic growth through private investment meant a necessary development of conditions amiable to investors’ needs. This included “a commitment to capitalist development; the curbing of nationalism; and the control of the Left, the working class, and the peasantry.” (Escobar 1995: 33) While Europe enjoyed
23 33 relatively unfettered access to U.S. foreign aid through the Marshall plan , aid flowing to the Third World was tempered by a notion that the conditions for investment had first to be laid. Where the well-being of the European economy was seen as a necessary good for the entire world, the well-being of African, Latin American, or Third World economies was seen, in comparison, as a limited and conditional good for the world at large. (Escobar 1995: 33) In the years just after World War II economic reconstruction in Europe proportionally proved (through the outflow of U.S. aid) to be a more pressing U.S. interest than economic development in the Third World. In addition to the emphasis on security issues, the Mutual Security Act (MSA) was passed in 1951, which became the basis of American foreign aid until the introduction of Foreign Assistance Act (FAA) ten years later. The rationale of the MSA was to “maintain the security and promote the foreign policy of the United States by authorizing military, economic, and technical assistance to friendly countries. (...) [T]o develop their resources in the interest of their security and independence and the national interests of the United States”. (Packenham 1973: 48) While technical assistance and capital investment remained the dominant ideology of economic development, the rationale for such development shifted to an emphasis on security interests during this period of time. In terms of democracy promotion, during this period, as would emerge again in later years of the Cold War, the U.S. was more interested in supporting anti- communist allies than promoting democratic governance. (Carothers 1999: 12-34) This was further evidenced in 1961 when the FAA was passed and United States Agency for International Development (USAID) was created to take over the administration of American foreign aid. In the same year, President Kennedy inaugurated the Alliance for Progress. (Packenham 1973: 59) Conceived of as a cooperative effort between the United States and Latin America, to develop the economic and social capacity of countries in Latin America through democratic ideals, one of the fundamental tenants of the Alliance for Progress was its emphasis on the promotion of constitutional
33 In 1953, under the Point Four Program, the entire Third World received a minimal $150 million in U.S. aid compared to a total of $13 billion already allocated to Europe through the Marshall Plan. While Europe received direct capital from the U.S. government, the Third World was expected to pursue “private capital” (Escobar 1995: 33)
24 34 democracy . However, the Alliance itself only stipulated objectives aimed at economic and social growth. Kennedy believed that growth in the economic and social sector would translate into favourable political developments, meaning that economic growth would lay the foundation for the rise of the democratic governments rather than Communist or 35 Aurthoritarian regimes in developing countries . (Packenham 1973: 70)
2.1.2. BASIC HUMAN NEEDS APPROACH : ‘H UMAN SIDE OF DEVELOPMENT ’ After two decades of a U.S. foreign policy programmatically focused on economic development in the Third World, the overall landscape of economic growth was disheartening. In 1968, countries at the center were wealthier in comparison to peripheral countries than they had been at the beginning of the development era in 1947. (Black 2002: 68) With income distribution widening comparatively among developed and developing countries, the economic gap went from a ratio of 6.5:1 to a staggering 16:1 in terms of per capita income between countries in the First and Third World. (Caufield 1996: 90) Not only had the wealth of countries cross regionally widened, but the wealth of individuals within developing countries also diverged significantly. Proportionally, the economic gap between rich and poor was substantially higher in developing countries than in industrialized ones. In the United States, for example, in 1968 the richest portion of the population had per capita incomes five times greater than that of the poorest segment. In developing countries, however, the gap was much larger with a per capita income disparity between rich and poor of fifteen to thirty times. (Caufield 1996: 90) Thus, to 1968, U.S. policies of economic development, measured in concrete numbers of per capita income, reflected a twofold negative trend in which developing countries were becoming poorer in relation to industrialized nations, and the poorest individual within developing countries were becoming proportionally poorer to the wealthier citizens of their own countries. These statistical markers of income distribution were one among many substantive indicators signifying the shortcomings that economic development had
34 Goals such as ‘personal liberty’, ‘representative democracy’, strengthening of democratic institutions’
35were identified in the Preamble of the Alliance’s Charter. (Packenham 1973: 70) From the outset of the Alliance, democratic growth in Latin America appeared tenuous, with six military coups during 1962 and 1963. (Packenham 1973: 71)
25 espoused at its outset. Not only had economic development failed to meet its most basic goals of increasing economic growth, but it also failed to meet its more ideologically 36 implied goals of democratization . These notable shortcomings of economic development, together with the disillusionment over the failures in Vietnam and tentative growth of economy at home, brought into question the viability of a continued U.S. foreign policy based on such foundations. Therefore, in the early 1970s, in order to address these shortcomings of economic development a new strategy emerged – the basic 37 human needs approach . (Stewart 1989) The premise of the basic needs approach was that all people should have the ability to obtain necessary basic social goods. This appeared a fitting answer since the shortcomings of economic development thus far had created an increasingly impoverished population in the Third World unable to access these so called basic needs as a result of their poverty. Within this new approach development aimed to provide sufficient food to the poorest populations, adequate housing, sufficient medical care, and universal education, all goals left unmet by the previous approach to development. (Lewellen 1995: 104, Carothers 1999: 28) However, these programs tended to allot funds directly to governments rather than to private sector institutions wit the belief that governments were better equipped to meet the needs of the greatest number of people 38 most efficiently . Among the most fervent proponents of this novel approach was Robert McNamara, who believed that international security would best be served by achieving a basic living standard for all peoples around the world. (Caufield 1996: 96) Therefore, he proposed to directly increase the productivity of the poor and through doing so spread the benefits of economic growth more evenly across the population. (Caufield 1996: 97-99)
36 From 1957 to 1970, in only thirteen years, thirty-three African countries gained independence that subsequently transformed into authoritarian regimes either immediately following independence, or shortly thereafter. As decolonization swept Africa the largest number of authoritarian governments in history was
37proliferated. By definition, ‘basic human needs approach’ came to be understood as “the need to ensure that everyone has access to enough basic goods and services to maintain a le of living above a basic minimum, as a prime
38objective of economic development.” (Stewart 1989: 348) As part of U.S. foreign policy, land reforms in specific became an important focus of USAID during this period of time. As an example of such a program, USAID funded one such program in the Philippines, coordinating the transfer of more than 275,518 hectares of land, issuing more than 222,187 land transfer certificates. (Kervliet 1974: 287)
26 While new ideological approaches to American foreign assistance emerged in the 1970s, American foreign policy fell on hard times. By and large the 1970s reflect a time of uncertainty in American foreign policy. (Maynes and Ullman 1980: 5) In a sixteen year period between 1961 and 1977, U.S. development aid decreased by thirty-eight percent in real value, decreasing American influence in other countries. (Maynes and 39 Ullman 1980: 6) Furthermore, the 1970s became known as “a decade of executive- congressional conflict in foreign policy.” (Destler 1981: 167)Throughout the 1970s, congress increased restrictions on foreign aid while simultaneously requiring that specific aid programs be implemented. By the time Carter took office, there were specifically curtailed aid restrictions on over thirty countries. Bans on aid resulted from broad range human rights abuses, failures to make payments of dues to the UN, amassing nuclear weapons, to harboring terrorists, among other thing. There were also restrictions on what aid could be distributed for – no programs that supported police forces or abortions. (Destler 1981: 168-190) The question then becomes, how does the approach of basic human needs fit into this decade characterized by a deficit in American foreign assistance? The basic human needs approach emerged as a dual reaction to the failures of economic development abroad, as well as the economic and political crisis that resulted from the backlash of the Vietnam War and an U.S. adoption of relative disengagement in foreign affairs. Economic development of 1950s and 1960s failed to produce its espoused goals, causing policy makers to reevaluate their economic policies and turn to a new approach of basic human needs. (Maynes 1980: 23)
2.2. POST-COLD WAR POLITICS: DEMOCRACY AS AN ANTIDOTE TO TERRORISM
39 The House of Representatives cut all funding to USAID in the mid-1970s as a result of congressional displeasure with the Vietnam War, as well as President Nixon’s significant allotment of U.S. aid to Southeast Asia. (Fox 22) In part cutting the aid budget was justified through criticism that stated, USAID was “transferring resources ‘from the poor people in America to rich people in developing countries.” (Fox 22) Eventually, funding for USAID was reinstated under the premise that the Agency would modify its programs to directly meet the needs of the poor. Congress’ mandate to redirect aid to meet basic human needs also served to limit USAID’s capacity to implement programs not directly related to this goal. This gave Congress greater oversight in the allocation and implementation of U.S. assistance, an important move in light of confessional dissatisfaction and disillusionment with the executive branch. (Fox 22)
27 The decade that resulted in the fall of the Berlin Wall represented a time in which economic development and democracy assistance shared a transitional space in American foreign assistance. Transition to a paradigm of U.S. foreign assistance based on the 40 promotion of democracy was closely linked to the Reagan administration’s policies (Fischer 1997), driven by hard-line Cold War security interests, making the promotion of democracy a conditional interest. (Fischer 1997: 487-488, Carothers 1999: 33, 37) Throughout his presidency, Reagan dedicated much energy to the promotion of democracy as an ideology in what he saw as the war of ideas between the US and the Soviets. While Reagan was a realist in policy implementation, his war of ideas was rhetorically rooted in an idealist approach to the promotion of democracy. This indicated an important shift towards the Reagan administrations eventual claim that the attainment of democracy was necessary in order to achieve other goals such as economic development and peace. (Carothers 1991: 92) While Kennedy had promoted the idea of democracy through the Alliance for Progress, but only as a favorable result through economic development, what Reagan was proposing was democratic development irrespective of economic development as an end it itself. Therefore, the early years of U.S. democracy promotion were largely rhetorical, while policies of democracy assistance were still bound by hard-line Cold War interests. Democracy was promoted as an explicit function of “military-oriented anti-Communist policy.” (Carothers 1999: 92) At this stage, the U.S. initial approach to democracy assistance was top down and aimed at reforming state institutions through direct support to governments. The US had and interest in promoting a “tightly controlled, gradual process of democratic reform and to bolster besieged anticommunist governments friendly to the United States.” (Carothers 1999: 63) At the end of the 1980s, three main areas of development assistance emerged that guided democracy assistance to a new post-Cold War era: top-down reform of state institutions, judicial reform and legislative assistance, and electoral aid. (Carothers 1999: 79-85)
40 In the early 1980s, Reagan focused much of his foreign policy on renewing U.S. relations with anti- Communist governments in Latin America, providing them with significant military aid. (Fischer 1997: 487)
28 2.2.1. DEMOCRACY PROMOTION IN THE 1990 S
With the absence of Communism a new idealism regarding democracy emerged and the U.S. began fervently supporting its spread. This entailed new justifications linking democracy promotion to the U.S. interests. In President Clinton’s 1994 State of the Union Address, he defined the promotion of democracy as a concern of U.S. security and economic development stating that “ultimately, the best strategy to ensure our security and to build a durable peace is to support the advance of democracy elsewhere. Democracies don’t attack each other, they make better trading partners and partners in diplomacy.” (Clinton qtd. in Grant and Nijman 1998: 147) In light of the post-Cold War era, the Clinton administration had two compelling rationales for international aid – “crisis preventions” and “competing in the global economy.” (Grant and Nijman 1998: 147-148) Crisis prevention meant threats to U.S. security caused by a deterioration of politics abroad resulting in violence from a destabilization in political order. The second rationale, of competing in the global economy, was based on the idea that it is necessary to foster productive markets abroad in order to maximize opportunities to trade American goods as a means through which to secure economic prosperity for the United States. (Grant and Nijman 1998: 147) Both of these rationales or U.S. foreign assistance hinged on substantive U.S. interests, grounding U.S. aid for democratic assistance in new strategic goals, which was crucial in justifying aid in the post-Cold War era. It was believed that while the idea of promoting democracy flew logically from domestic U.S. interests, democracies provided support and security to one another in the global system by solving conflicts through peaceful means. (Grant and Nijman 1998: 148-149) This rationale of “preventive diplomacy” was important in justifying aid as a viable U.S. interest at a time when questions were being raised about the viability of USAID and the need for a U.S. foreign aid program. (Hoy 1998: 35) Additionally, neoliberal policy assumed that democracy was the most conducive form of governance to promote market reforms, because democracy could increase “government accountability and transparency, [promote] the rule of law, and [foster] respect for citizens’ rights and other limits on government power.” (Carothers 1999: 58) Therefore, U.S. promotion of neoliberal policies was dependent in large part on first
29 fostering a conducive political environment for such policies to thrive – a political environment of democracy. This marks a substantive change in ideology from the preceding decades of economic development, in which the common rationale for aid indicated a causal relationship between economic development providing the foundations for democratization. Thus, new areas of budget investment emerged. While throughout the Cold War political elites in control of U.S. foreign assistance, by and large, were vehemently against the promotion of development through community organization, believing that bottom up efforts would fuel Communist revolutions, jeopardizing U.S. security interests (Ottaway and Chung 1999: 7), after the fall of the Soviet Union civil society and local advocacy networks became viable means through which to promote U.S. interests abroad. In addition, financial constraints helped contribute to the rise of civil society aid. During the Clinton years, the foreign aid budget underwent serious funding cuts. In 1995 41 Congress substantially cut budgets to both bilateral and multilateral aid . (Hoy 1998: 40) Funding had once been allocated directly to governments to implement institutional reform, but this method had proven costly and largely ineffective. With decreasing budgets, funding allocated to smaller scale civil society organizations seemed a more cost effective way to maximize minimal resources to produce the most substantial effect in supporting democracy abroad. While the priority of previous top down approaches has been the judicial reform, with the bottom up approach judicial reform has shifted to a focus on the rule of law. Rule of law entails the promotion of “laws that are publicly known, clear and applied equally to everyone; respect for political and civil liberties, especially due process in criminal matters; and the subordination of government power to legal authority.” (Carothers 1999: 164) In the bottom up approach, rule of law is advanced most 42 predominantly through “increasing legal access and advocacy .” (Carothers 1999) One of the reasons that rule of law has gained so much leverage and popularity among U.S. policy makers in the 1990s, has been its perceived connection to the process of market reform. There is a strong economic interest in the promotion of the rule of law.
41 42 bilateral aid by 22%, multilateral by 30%. (Hoy 1998: 40) This is channeled through technical assistance (training sessions) and direct funding of advocacy NGOs that focus most predominantly on utilizing legal frameworks to advance socioeconomic goals. (Carothers)
30 It is thought among aid professionals, that rule of law is necessary for a full transition to a market economy – foreign investors must believe that they can get justice in local courts, contracts must be taken seriously, property laws must be enforceable, and so on. (Carothers 1999: 164) Therefore, as economic growth is still a considerable interest in U.S. foreign policy, rule of law holds specific importance in meeting these U.S. foreign policy interests. (Grant and Nijman 1998: 148) One of the MCA’s selective criteria (Ruling justly) can be seen as an evidence of a legacy thereof. As democracy aid became a core priority of U.S. foreign assistance starting in the 1990s, the promotion of civil society emerged as a means through which to support the transition to and consolidation of new democracies. Engaging civil society, NGOs, and civic advocacy organizations, giving agency to the people rather than exclusively to political elites, had been a major transformation in U.S. policy following the end of the Cold War. Whereas economic development was once presented as the rationalization for U.S. foreign assistance and the attainment of other development goals, democracy now stood in its place. The promotion of democracy abroad was successfully articulated as a foundation for U.S. assistance policy, as a means to achieving other ends such as security and the expansion and deepening of markets abroad.
2.2.1. POST -9/11 ERA : DEMOCRACY AND SECURITY The democracy promotion enthusiasm of the 1990s partially ended with the terrorist attacks of September 2001. However, while a development ontology based on democracy as a precursor to economic growth has not resulted in the desired outcomes, developmental goals based on democracy became further entrenched in American foreign policy. (Carothers 1999) This being said, new geopolitical interests and security threats have redefined the ideological implications of the concept of democracy aid. While the emphasis on free market promotion persisted from the earlier eras, democracy assistance gained a new meaning of a new historical context, based on the assumption that undemocratic, ‘failed’ states provide a shelter for terrorism to thrive. (NSS 2002) The strategic interplay between democracy assistance and free trade promotion thus makes the MCA a novel enterprise, which, however, is bound to its academic and political legacies.
31 The MCA background paper published in February of 2005 states that, “the goal of the MCA is to reduce poverty by significantly increasing the economic growth trajectory of recipient countries. This requires and emphasis on investments that raise the productive potential of a country’s citizens and firms and help integrate its economy into the global product of capital markets.” (Implementing the Millenium Challenge Account) The MCA declaration of its developmental goal of economic growth comes fifty- four years after President Truman presented his Point Four program during his Inaugural Address declaring that, “in cooperation with other nations, we should foster capital investment in areas needing development. (…) With the cooperation of business, private capital, agriculture, and labor in this country, this program can greatly increase the industrial activity in other nations and can raise substantially their standards of living.(…) Greater production is the key to prosperity and peace.” (Truman: Inaugural Address) Truman’s Point Four program and the MCA both declare economic growth as the key to realizing successful goals of development. Both initiatives rest on the assumption of mutually reinforcing goods, that says growth in one sector will promote growth in subsequent areas (i.e. economic growth will lead to improved living conditions and thus, a better quality of life). The difference resides in the way each envisions a causal relationship of development. While the previous initiatives were based on the idea that economic growth would lead to increased development and a higher overall quality of life that would subsequently result in the emergence of a democratic system. The MCA assumes that the foundations of an already democratic government will provide the basis for more productive sustained economic development and hence better standards of living. The continuity between the different approaches resides in the idea that the successful implementation of programs that support economic growth is the key factor in leading to long-term developmental success which results in higher standards of living and increased quality of life. The ways this thinking implicitly supports exclusion inherent to current development initiatives will be described in the following chapter.
32 3. CHAPTER THREE: MCA AND THE POLITICS OF EXCLUSION
“Each society has its regime of truth, its ‘general politics’ of truth: that is, the types of discourse which it accepts and makes function as true; the mechanisms and instances which enable one to distinguish true and false statements, the means by which each is sanctioned; the techniques and procedures accorded value in the acquisition of truth; the status of those charged with saying what count as true.” (Foucault in Gordon 1980: 133)
“The concept of ‘free trade’ arose as a moral principle even before it became a pillar of economics.” (Bush, NSS 2002)
As we have seen in previous chapters, the MCA has brought nothing new in that it envisaged development as a linear path to ideals that the US perceive as desirable and universally applicable. (NSS 2002) While doing so, it has continued to exercise a certain type of exclusion, the constitutive arena of which has been shaped by three concepts seminal to Michel Foucault’s analysis of disciplinary power: ‘hierarchized surveillance’, normalized judgment, and their predisposition: the regime of truth. (Foucault 1979) In order to follow the pattern of this work, we now have to question the underlying assumptions the MCA is based on (i.e. Foucault’s ‘regime of truth’), as well as their scientificity and objective values, mainly the ‘freedom’ of market. Who is the arbiter, privileged to objectify, monitor and impose a judgment (i.e. an MCA passing grade) on the ‘others’? And who is the objectified, excluded ‘other’? And what is the nature of exclusion this regime sets forth? As we have seen, the growing intensity with which the US has sought to promote the fact that U.S. values and rules are the most desirable and just in the world are most 43 virulently articulated by the current administration’s ideologues and expressed in its key foreign policy documents. (NSS 2002, Soederberg 2004: 280) In the words of President Bush, this strategy is “based on a distinctly American internationalism that reflects the union of our values and our national interest. The aim of this strategy is to help make the world not just safer but better. Our goals on the part of the progress are clear: political and economic freedom, peaceful relations with other sates, and respect for human dignity.” (NSS 2002)
43 Think-tanks, such as the Heritage Foundation, the MCA’s guarantor, or the Project for New American Century. (Soederberg 2004: 279-280)
33 To accomplish these goals and current foreign policy objectives, the administration’s Millenium Challenge Act employs a set of indicators designed by experts on assessing democracy and liberalization of the economy. “Modernity’s regime of truth is based on scientific method. What makes knowledge legitimate (and powerful) in the modern world is not tradition or divine authority but a particular scientific mode of validation.” (Foucault in Gordon 1980: 145) What counts as true is what scientific research can demonstrate. (Edkins 2000: 96) This is a particular mode of knowing: “calculable, generalizable, objective and objectifying.” (Edkins 2000: 96) In order to uncover the arbitrary nature of truth represented through the MCA selective criteria, we have already sought the intellectual parents of this project as well as the institutions competent to monitor, control and evaluate countries’ performance. It is essential now to look at the guiding principles of this novel development initiative which are being naturalized by the scholar thinking, and practices of the ODA, thus imposing a linear, top down vision of development, while excluding opposing principles and modes of reality.
3.1. SELECTION CRITERIA: FREEDOM VS. EXCLUSION
“Free trade and free markets have proven their ability to lift whole societies out of poverty – so the United States will work with individual nations, entire regions, and the entire global trading community to build a world that trades in freedom and therefore grows in prosperity.” (NSS 2002)
The Millenium Challenge is not the first, not even the sole institution to push for opening of markets. Official development institutions, including the MCA, have so far preached the fictitious doctrine of ‘free’ markets. (Seabrook 2003: 64) Identical initiatives have sprung under the neoliberal ideology already in the 1980s (the Washington Consensus), when the IMF became the enforcer of the integration of all countries into the global economy, “increasing debt and dependency.” (Seabrook 2003: 67) In parallel, negotiations of the General Agreement on Tariffs and Trade became institutionalized in the World Trade Organization (WTO) in 1995. This was supposed to
34 set up a rules-based system for implementing global compliance with ‘free trade’. Poor countries would have to open themselves up to the rich countries for agricultural imports and industrial manufactures, as well as to the service sector, not only in finance and banking but also electricity, water and power, telecommunications and the ‘cultural products’ of media conglomerates. It was through these institutions, that the neo-liberal regime of truth came to be enforced, thus paving the way for conditionalities and criteria set forth by further development initiatives, such as the MCA. (Soederberg 2004: 362) While ‘freedom’ in the economic sphere unambiguously advantaged the global North, there is no evidence of clear relationship between open markets and poverty reduction. (Knack 2004, Stiglitz 2002, Seabrook 2003) To give an example, poor farmers in the South cannot compete with the United States or European Union, whose governments pay vast subsidies to their own food producers. (Seabrook 2003: 64) Regime through which ‘free markets’ are naturalized as inherently valuable and promotion-worthy is thus being created in favor of those whose wealth was accumulated in conditions of severe state protection (e.g. Great Britain, Japan), and who can now profit on the opening of markets abroad. While money moves freely around the world and some commodities may move too (subject to quotas and tariffs), human beings (or ‘labor’, as they appear in the economic calculus) are severely controlled – as panic over ‘economic migrants’ in Europe shows. (Seabrook 2003: 65) Thus, excluded states which once accept the rules of the game are left by development policy initiators to deal with the often unfavorable results themselves. Exclusion, however, means not only that the rules being created are unfavorable for one side, but also that there is one rule for the richest countries, and another one for the South. While the Millenium Challenge preaches open economies and liberalization, together with ‘good governance’ and ‘transparency’, none of these things was conspicuous when the West grew rich. In Britain, industrialization took place without democracy. It was constructed on the wealth extracted from empire and never had the slightest pretension to free trade. After 1945 Japan became industrially powerful due to government protection for its growing industrial base. (Seabrook 2003: 67-73) Furthermore, while most Western countries provide basic welfare for their most vulnerable, medical care for the aged, support for the long-term sick and disabled, and for
35 those thrown out of work by cyclical or structural economic change, the South is expected to develop without such protection. It is instructed to open itself up to organizations even more powerful than governments – multinational companies which in 44 some cases have a turnover greater than the country in which they are investing . (Seabrook 2003: 73) Thus, what Carothers calls the learning curve of development assistance, others could see as a persistent struggle of the neo-liberal economy to legitimize itself in the face of growing inequalities and failed projects to redeem the situation.
3.2. INSTITUTIONALIZED SURVEILLANCE AND THE OBJECTIFIED ‘OTHER’
The question of exclusion and legitimacy includes also the guarantors of the ‘Economic freedom’ criteria. We have already touched upon the IMF and the World Bank as authors of ‘Inflation’, ‘Regulatory quality’, ‘Budget deficit’, and ‘Days to start s business’ criteria. (MCA) The last major guarantor is the Heritage Foundation sponsoring the ‘Trade policy’ criterion. On an annual basis, Heritage publishes an Index of Economic Freedom in the Wall Street Journal, where it reproduces common sense assumptions of the importance of economic freedom and rule of law in the South, but also acts as a disciplinary strategy of capital interests (Soederberg 2004: 296). The logic behind this Index shows that free countries on average have a per capita income “twice that of mostly free countries, mostly free countries have a per capita income more than three times that of mostly unfree and repressed countries.” (MCA) The causality relationship attempts to be proved in that countries maintaining policies that promote economic freedom provide an environment that facilitates trade and encourages entrepreneurial activity, which in turn generates economic growth. (Radelet 2003b: 87) The assumptions inherent in these scores are questionable. As has been shown, the correlation between economic freedom, growth and democracy has not been
44 In 2000 the Institute of Policy Studies revealed that of the world’s largest 100 economic entities, 51 are now corporations and 49 countries. The 22largest entities are countries, with Turkey just ahead of General Motors. After Denmark follow Wal-Mart, Exxon Mobil, Ford Motor, and DaimlerChrysler. Indonesia and Greece are slightly ahead of Mitsui, Mitsubishi, Toyota, General Electric, Itochu and Royal Dutch/Shell, which are all bigger than Venezuela, Iran and Israel. (World Development Movement)
36 45 substantiated by history . Likewise, the assumption that economic freedom will quell historically and culturally rooted wars, oppression and human suffering in many of the failed states is not only based on often flawed West-centric ideals, but also justifies the increasingly physical and economic coercion undertaken through withholding private investment and now public aid from these states. (Seabrook 2003: 109-115, Soederberg 2004: 297) A failing grade on Heritage’s Index signals higher risk to transnational capital. Thus, the index serves to punish countries by either capital flight or investment strikes. As a consequence, MCA’s push for ‘voice and accountability’ is being contested by the ‘Economic freedom’ criteria, where rules created by those holding power and economic means exclude alternative, local and truly empowering visions of (economic) development.
3.3. NATIONAL SECURITY AND EXCLUDED STATES
“Poverty does not make poor people into terrorists and murderers. Yet poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders.” (Bush, NSS 2002)
According to the NSS, failed/excluded states pose a direct threat to US national security. (NSS, Soederberg 2004: 291-292). By (the U.S. government’s) definition, failed states are “countries in which the central government does not exert effective control over, nor is it able to deliver vital services to, significant parts of its own territory due to conflict, ineffective governance, or state collapse.” (Rice 2003) Consequently, failed states are believed not only to provide convenient operational bases, and safe havens for international terrorists, the lack of ‘development’ (i.e. economic freedom for capital and the rule of law) inherent in failed states could spawn discontent and violence that would spill over to other countries. (NSS 2002, Rice 2003, Soederberg 2004: 292) To understand the exclusionary nature of the MCA, it is essential to look at what the U.S. government sees as the main cause of their failure/exclusion. As the NSS puts it,
45 Authoritarian Chile under the Pinochet regime produced the so-called neoliberal model in the South during the 1980s, while the ‘developmental states’ in East Asia helped produce the miracle economies. (Cf. Black 2002, Seabrook 2003)
37 “the events of September 11, 2001 taught us that weak states, like Afghanistan, can pose as great a danger to our national interests as strong states.”(Bush, NSS 2002) In order to deter this danger present as incumbent terrorists in failed states, the US has to gain more control over social and political realities of these countries so as to reproduce and protect U.S. dominance in the global political economy. (Rice 2003, Soederberg 2004: 292). It has to motivate and discipline failed states into adopting market-led policies and embrace globalization in order to overcome poverty. It has to legitimize a certain economic order and rules from which it is exempt and by which to objectify and tame the Third World reality. As Adam Lerrick and Allan Meltzer, defenders of the performance-based grants put it, it is “a more effective form of control and surveillance over states and markets.” (Lerrick and Meltzer 2002) Furthermore, while this new global development compact operates primarily through coercive means, it is legitimized to the American people and international system through the construction and reproduction of a discourse that views ‘the other’ as a “passive and silent homogeneous unit that is unwilling to embrace neoliberal modernization and thus remains a potential threat to the ‘West’”. (Soederberg 2004: 297)
CONCLUSION
The asymmetric, exclusionary divide between ‘us’ and ‘them’ is thus being reinforced in a threefold manner: first, by prevalently Western academia creating the ‘science’ of development in a continuous search for new causality relationship that could explain and justify development initiatives deemed to fight poverty and inequality. Second, practices of foreign policy often disguising perceived security interests with good intentions reinforce the academic thinking in finding new ways to eliminate perceived threats. Third, through an institutionalized Western-centric regime of truth which empowers ‘us’ to monitor, tame and objectify the ‘others,’ the development reality is being tamed by unilateral visions of development while excluding alternative paths and means.
38 I intended to address this problematique in three chapters. First, having outlined the debate on development assistance within academia, I attempted to explore the interplay between four approaches and the extent to which a double shift (towards empowerment envisioned by bottom-up approaches and towards democracy as a precursor to economic growth) has actually occurred in development thinking. Having placed the MCA within this debate, we could see points where the rhetoric of bottom-up 46 schools (i.e. Dependency and Civil Society ) and the MCA merged. However, the underlying assumption of a unilaterally enforced vision of a linear path to development, the sole privilege of U.S.-based think tanks and IFIs to judge and monitor other countries performance, as well as the government-centric allocation methodology, show the MCA’s epistemological adherence to a top down approach pioneered by Modernization and followed by the Transitology school. As sympathizing policy makers could have it, on the ontological level, ‘democracy’ in terms of ‘good governance’ and ‘voice and accountability’ is being applauded for having an unprecedented position within the country selection criteria. (Kolbe 2003, Brainard 2003) However, as I have argued, the required IMF’s passing grade on inflation and budget deficit, as well as World Bank’s supervision of ‘Days to start a business’ criterion and Heritage Foundation’s ‘Trade policy’ disqualify alternative paths of economic development for countries with ‘good governance’ intentions. Second, in Chapter Two this argument was further supported by juxtaposing two Cold War development assistance projects of the US (Truman’s Point Four and Kennedy’s Basic Human Needs Approach) and the Post-Cold War era marked by Reagan’s free market promotion and marked by Clinton’s zeal over democracy promotion. Since Truman’s Point Four, the common rationale guiding U.S. development assistance has been that of mutually reinforcing goods, in which growth and democratization go hand in hand on a linear path to development. In addition, it was argued that the MCA responds to imagined security threats similar to the Cold War era, in which it resembles Point Four and its politics of fostering anti-communist governments while bringing along the legacy of poverty alleviation and human needs as a self-
46 As has been argued in chapter two, these attempts are most clearly evidenced in the MCA’s ‘Investing in People’ criteria and the ‘Voice and Accountability’ criterion.
39 conscious means to partially relieve the widening inequality gap (inherited from the Basic Human Needs Approach), and zealous promotion of democracy and economic freedom as universal moral values (legacy of Reagan’s and Clinton’s era, enlivened by NSS 2002). Third, we have looked more closely at the underlying assumptions of the MCA – in Foucauldian speak, the regime of truth where the MCA operates – in order to uncover the nature of the exclusionary politics it exercises. The concept of ‘Economic freedom’, as a binding neo-liberal imperative of open markets, along with the belief that democratic, accountable and transparent states foster an environment where terrorism would not thrive, were singled out as assumptions upon which one can monitor, measure, award and exclude ‘others’. Despite lack of evidence that opening of markets should have a positive effect on poverty in developing countries, the MCA deploys carrots and sticks in order to make recipient countries adhere to this neo-liberal doctrine. Thus, it has neutralized its own ‘empowerment’ rhetoric, while excluding alternative ways to fight poverty and states which do not comply with the U.S. socioeconomic and moral values. The relationship between these two agents has remained asymmetric and exclusionary, and the recreation of the ‘us’ and ‘them’ divide along the lines of the ‘coalition of the willing’ and the ‘axis of evil’, have acted to fill the vacuum of the Cold War rhetoric and distorted the growing contradictions of neoliberal globalization and American imperialism over the past several decades. (Soederberg 2004: 293) States, perceived as an imminent threat to the US cannot qualify for help. Ironically, such states are home to the most impoverished populations of the world. It is, however, unlikely that this new aid initiative will reach those who are deeply frustrated, extremely poor, and antagonized by the relentless pursuit of a form of development from which they are excluded. (Seabrook 2003: 119) Aid, even if it were in larger quantity, can do little to repair the damage caused by the policies recipient countries are forced to accept. These demand that their markets be opened as a condition of aid, while the donors keep their own markets well protected and their borders shut to people fleeing unbearable conditions. Millions of the ‘very poor’ live in failed or ‘non-performing’ states. It is in these environments that alienation and exclusion flourish, but which most donors – notably the US - do not want to touch, because in them aid would be ‘wasted’ or not used
40 ‘effectively’. According to this view, aid is only useful if it helps bring countries into a global economy, on unilaterally set terms.
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