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THE AMERICAN UNIVERSITY IN CAIRO SCHOOL OF HUMANITIES AND SOCIAL SCIENCES DEPARTMENT OF POLITICAL SCIENCE THE NEXUS BETWEEN DOMESTIC INTERESTS AND FOREIGN AID POLICY: THE CASE OF THE NORWEGIAN AID AGENDA BENEDICTE BAKKESKAU A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN POLITICAL SCIENCE JUNE 2011 THE AMERICAN UNIVERSITY IN CAIRO THE NEXUS BETWEEN DOMESTIC INTERESTS AND FOREIGN AID POLICY: THE CASE OF THE NORWEGIAN AID AGENDA A THESIS SUBMITTED BY BENEDICTE BAKKESKAU TO THE DEPARTMENT OF POLITICAL SCIENCE JUNE 2011 IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS HAS BEEN APPROVED BY Dr. Ezzedine Choukri Fishere Thesis Committee Advisor-------------------------------------------------------------------- Affiliation: Department of Political Science, American University in Cairo Dr. Ibrahim Elnur Thesis Committee Reader -------------------------------------------------------------------- Affiliation: Department of Political Science, American University in Cairo Dr. Pandeli Glavanis Thesis Committee Reader -------------------------------------------------------------------- Affiliation: Center for Learning and Teaching, American University in Cairo ----------------- -------------- -------------------- -------------- Department Chair Date Dean of HUSS Date For my mother, Bente Bakkeskau, to whom I owe so much. Thank you for instilling in me patience, determination and strength. Thank you for making me more than I can be. ACKNOWLEDGEMENTS In completing this thesis I have drawn on the support of many people without whom the final result would not have been the same. First, I would like to thank my advisor, Dr. Ezzedine Choukri Fishere, for his suggestions and guidance in this process. I would also like to thank my committee members, Dr. Ibrahim Elnur and Dr. Pandeli Glavanis, for agreeing to be a part of this endeavor and for the constructive criticism and advice they offered. I am also grateful to my interviewees for their valuable time, knowledge and insights. My family and friends also deserve thanks for their support and encouragement in seeing this thesis through: my father for his constant emotional backing and love, and his never-ending confidence in me; my sister for her ability to let me escape the academic world, her generous hospitality and love; my friends for their support, help and advice along the way. A special thanks goes to Mouctar Diallo for his inspiration, encouragement and academic input throughout this process. Though this endeavor has not been one of solitude, any errors and flaws that remain in the final product are mine, and mine alone. Benedicte Bakkeskau, Cairo, June 2011 TABLE OF CONTENTS Introduction 2 Research Questions and Hypothesis 4 Structure of the Thesis 7 1 Literature Review, Theoretical Framework and Methodology 8 1.1 Literature Review 8 1.1.1 Altruism and Self-Interest: Norwegian Development Policy 14 1.2 Theoretical Framework 17 1.2.1 Norwegian Politics: A Pluralistic System of Lobbyism and Corporatism 20 1.3 Methodology 23 1.3.1 Primary Data 23 1.3.2 Secondary Data 24 1.3.3 Interviews 25 1.3.4 Language of sources 27 2 Norwegian Aid: The Institutional Setup 28 2.1 The Storting 28 2.1.1 The Storting‘s Rules of Procedure 29 2.1.2 The Storting‘s Power in the Norwegian Policy Process 32 2.2 The Norwegian Government 33 2.3 The Norwegian Foreign Ministry 35 2.3.1 The Organizational Structure of the MFA 36 2.4 The Norwegian Agency for Development and Cooperation 40 2.5 The Development of the Norwegian Aid Administration 41 2.5.1 Additions to the Norwegian Aid Institutions 43 3 The Norwegian Development Agenda and Domestic Channels of Influence 45 3.1 Norwegian Civil Society 46 3.2 Norwegian Business and Development Aid 51 iii 3.3 Relationship with Academia 53 3.4 Domestic Opinion and Public Support 54 4 Sixty Years of Norwegian Development Cooperation 56 4.1 The Norwegian Socio-Economic Make-Up: A Framework for Development 60 4.2 The Political Climate for Development Assistance 66 4.3 The Kerala Fishing Project: Setting the Bar 68 4.4 Norwegian Aid Policy in the Early Years: Goals, Strategies and Principles 71 4.4.1 Concentration and Cooperation 74 4.4.2 Norwegian Partner Countries 76 4.5 Norwegian Aid Allocation: Themes, Sectors and Supply Channels 80 4.6 Norway‘s Development Profile anno 2010 84 4.6.1 Five Pillars of Norwegian Development Cooperation 85 4.7 Development Aid: In Norway‘s Best Interest? 88 4.7.1 The Role of the Private Sector 92 5 Conclusion 98 The Role of Domestic Actors 98 The Role of Institutions 99 The Role of the Individual 101 The Corporative Channels of the Norwegian Aid Agenda 102 Concluding Remarks 106 Further Research 107 Bibliography 109 Appendices 119 Appendix 1. Interview Guide 119 Appendix 2. List of interview respondents 122 Appendix 3. Consent form for interviews 123 Appendix 4. Approval of study from the Institutional Review Board at the American University in Cairo 124 iv ABSTRACT This thesis looks at the nature of Norwegian aid and how the domestic socio-political realities influence the character of Norwegian development assistance. Norwegian development aid is analyzed as a foreign policy decision, examining the institutional structure and domestic stakeholders and establishing the role and strength of each player within the decision-making process. Understanding how development policies are formed provides a better background for analyzing the interests that lies behind a country‘s aid program. In being aware of these interests, we can better analyze the donor motives of foreign aid and how they impact the development trajectory in the recipient country. The research yields several findings regarding the formation of Norway‘s development policy: 1) Norway has a corporative system where domestic actors actively take part in the decision-making process; 2) Domestic stakeholders participate when the issue at hand concerns their own agenda or affects them in any way; 3) Their strength within the system depend on whether or not they are aligned with the political agenda of the sitting government. The research further suggests that the individual has some impact on the policy process, though this largely depends on their position within the system. In conclusion, the research confirms that to a certain extent Norwegian development policy is influenced by domestic socio-political interests. v [R]ecognize the importance of policy-makers, the wealthy and others with power, and make it a priority to learn about how they, as well as ourselves, can change and act more for the better. For they are the biggest blind spot in development studies. If we are serious about poverty, we have to be serious about powerful people as people. Robert Chambers, ―Critical Reflections of a Development Nomad,‖ in Khotari 2005, p. 85. 1 INTRODUCTION In International Relations (IR) the state has traditionally been the center of attention. With the introduction of new views and theories, the state has gradually been opened up and other areas of investigation have been added to the equation. Though our focus has been widened, the human agency that lies behind every decision, choice and action, or inaction, are often overlooked and forgotten. This is true for the aid and development discourse as well. Though human agency has been brought into the discussion by theories of stakeholder and participatory development, the focus is usually on those receiving aid, not giving it. And when the focus is directed at the donor, the analysis often concentrate on the state as a unified actor without recognizing the multifaceted landscape of domestic and international factors that influence and shape a country‘s foreign policy. Even if the variety of factors is acknowledged, human agency is left out of the equation. However, the individual is important within this context. More specifically, the individual politician, bureaucrat, lobbyist, idealist, businessman and volunteer all play a role in shaping a country‘s foreign aid policy. As the quote from Robert Chambers on the previous page points out, if we are serious about studying development, trying to understand and make it the best it can be, our analyses should include people in power. Reflecting Chambers‘ call to ―recognize the importance of policy-makers‖, this thesis examines Norwegian development activities as a foreign policy decision, specifically looking at the role of the individual in the decision-making process of Norwegian development policy. 2 Since its beginning, aid has been a tool for donor countries‘ foreign policy. In the years after the Second World War, promoting human betterment was seen as a mean to diplomatic ends concerning national and international security. Aid was viewed as a way to alleviate the troubles of the newly independent and underdeveloped countries of the Third World through economic stabilization, long term growth and poverty reduction (Lancaster 2007:60). Since its origination in the late 1940s, aid has become subject to the moral obligation of wealthier states in their attempts to improve human development in less developed states. What started as a strategic tool for national and international security has become an institutionalized practice characterizing the interaction between rich and poor countries. Political constituencies with interests in the aid agenda have developed in donor countries as well as within the international community and these constituencies promote and campaign for an increase in aid levels (Lancaster 2007:212-215).