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Abstract
Contemporary development assistance often takes the form of subcontracted state-building. Foreign donors hire for-profit firms to provide services and to improve or create institutions in developing countries, particularly those experiencing internal conflict. This arrangement creates two counterproductive dynamics: first, it introduces agency problems between donors, recipient states, subcontractors, and citizens; and second, it undermines the long-run development of domestic bureaucratic capacity by creating disincentives for the host government to invest. These dynamics hinder, rather than foster, the legitimacy of state institutions. This paper summarizes trends in external support to state-building since the 1970s and illustrates subcontracted state-building with examples from Colombia.
Acknowledgements
The authors thank Eli Berman, Mike Callen, Simone Dietrich, Joe Felter, Daniel Flechas, Isabelle Duyvesteyn, Christopher Paik, Paul Staniland, and Seiki Tanaka for many helpful conversations. Mica Meintel-Wade provided invaluable expertise on U.S. government contracting and research assistance.
Notes
1. Clunan and Trinkunas, Ungoverned Spaces; and Department for International Development, “Building Peaceful States”.
2. e.g. USAID, “Fragile States Strategy”.
3. Cliffe and Roberts, World Development Report 2011.
4. e.g. USAID, “State Building in Situations of Fragility”.
5. Lake, “The Practice and Theory of US Statebuilding”.
6. Lake, “Building Legitimate States”; and “The Practice and Theory of US Statebuilding”.
7. Moss, Pettersson, and van de Walle, “An Aid-Institutions Paradox?”.
8. Krasner and Weinstein, “Improving Governance from the Outside In”.
9. Ibid.
10. Dietrich, “Donor Political Economies”, finds that donor countries’ preferred mechanism for providing aid relates to their political economy: ‘neoliberal’ US and UK subcontract most often, while ‘statist’ France and Germany provide more of their aid through foreign government institutions. Here, we focus on USAID because it is by far the largest provider of ODA, followed by DFID, the UK’s aid agency. The Japan International Cooperation Agency (JICA), not listed here, is one of the largest donors to war-affected states, and often subcontracts to private companies as well. However, it has started to shift towards funding multi-lateral agencies such as the UNDP instead (Tanaka and Yoshikawa, “Establishing Good Governance”), consistent with Dietrich’s argument.
11. Dietrich, “Bypass or Engage?”.
12. Berrıos, Contracting for Development, 12.
13. Zeller, “On the Work Force Roller Coaster”, 33.
14. General Accounting Office, “Strategic Workforce Planning”.
15. For a detailed discussion of the staffing changes in the 1990s, see Zeller, “On the Work Force Roller Coaster”.
16. Committee on Foreign Relations, “USAID Contracting Policies”.
17. Zeller, “On the Work Force Roller Coaster”, 38.
18. Ibid., 37.
19. Norris, “Hired Gun Fight”.
20. USAID/Yemen, “2010–2012 Yemen Country Strategy”.
23. The pursuit of explicit approval is consistent with Hume’s critique of social contract theory; he argued that the notion of citizens’ tacit approval undermines the claim that the contract is legitimate, and that consent must be sought by the government and volunteered by the population, rather than assumed.
24. Dietrich, Mahmud, and Winters, “Foreign Aid, Foreign Policy”.
25. Dietrich, “Bypass or Engage?”.
26. Appendix A1 repeats the excercise for 10 countries with ongoing conflicts from 2001 on.
27. See the excellent review by CGD (Moss, Pettersson, and van de Walle, “An Aid-Institutions Paradox?”).
28. Bapat, “Transnational Terrorism, US Military Aid”; and Felter, “Aligning Incentives to Combat Terrorism”.
29. We thank Seiki Tanaka for making this point.
30. Chatterjee, Giuliano, and Kaya, “Where has All the Money Gone?”.
31. Werker, Ahmed, and Cohen, “How is Foreign Aid Spent?”.
32. Ahmed, “The Perils of Unearned Foreign Income”.
33. see Rajan and Subramanian, “Aid and Growth”, among others.
34. Darden and Mylonas, “The Prometean Dilemma”.
35. There are of course exceptions and some regional variation. But in general, compared to many other countries experiencing internal conflict, Colombians share a national identity.
36. Moss, Pettersson, and van de Walle, “An Aid-Institutions Paradox?”.
37. Arjona, Rebelocracy; and Ch et al., “Endogenous Taxation in Ongoing Internal Conflict”; and Eaton, “The Downside of Decentralization”.
38. Lake, “Building Legitimate States”.
39. Ramírez Tobón, “Colonizacion Armada”.
40. Romero, Paramilitares y Autodefensas.
41. Echandía, Dos Decadas del Conflict Interno en Colombia.
42. Dube and Naidu, “Bases, Bullets and Ballots”.
43. Office of the Inspector General, “Audit of USAID/Colombia’s Alternative Development Program”.
44. Tech, “Colombia”.
45. Office of the Inspector General, “Audit of USAID/Colombia’s Alternative Development Program”.
46. The PNCRT program was contracted under the name ‘Consolidation and Enhanced Livelihoods Initiative’ (CELI) for two different regions: Central, and North/South. Associates for Rural Development (ARD; since renamed Tetra Tech ARD) won the 5-year contract for the Central region, valued at $114,953,981 and awarded 20 April 2011 (https://www.fbo.gov/?s=opportunity&mode=form&id%20=%2078349e99a9002969c2154b37a9a35516&tab%20=%20core&_cview%20=%201). The Central region includes municipalities in the departments of Caqueta, Tolima, and Meta. Six months later, Chemonics International, Inc won the bid for the $89,570,250 contract to cover the North and South regions (https://www.fbo.gov/index?s%20=%20opportunity&mode%20=%20form&id%20=%2094bd6a2be9168149cde328733b4a59b9&tab%20=%20core&_cview%20=%201). The large, lone municipality in the South region is Tumaco; in the North, the contractor is expected to work in the Bajo Cauca of Antioquia and southern C ́ordoba. Finally, USAID also awarded a $32 million grant to CHF Inter- national (now Global Communities) in early 2010 to execute Consolidation in the four municipalities of the Montes de María region.
47. Interview, October 2010, Bogotá.
48. Interview with Álvaro Balcázar, Bogotá, 27 May 2011.
49. Interview with Carlos Avila, Bogotá, 5 November 2010.
50. January 2011.
51. Focus group meeting, Vista Hermosa, January 2011.
52. Arjona, Rebelocracy; and Blair and Kalmanovitz, “On the Rights of Warlords”; and Malecaq, this issue.
53. Staniland, “States, Insurgents and Wartime Political Orders”; and Staniland, “Armed Politics and the Study of Intrastate Conflict”.
54. Norris, “Hired Gun Fight”.
55. Kenny, “It is Time to Reform USAID”; and Norris, “Hired Gun Fight”.