The Spirit of Democracy, page 43
5. Rewards should be structured to lock into place the institutions, practices, and norms of good governance. One obvious model is the European Union, with its detailed and rigorous conditions for entry into membership. As the United States seeks to enlarge free trade agreements with Mexico and Central America into a hemispheric Free Trade Agreement of the Americas, it should press for a requirement, similar to the European Union’s, that all members must uphold democracy and human rights. Yet the EU does not do enough to monitor and demand good governance after accession. Free trade communities and transformative development assistance should be continually monitored, with aid flows reduced or suspended for defections from good governance. When poor countries qualify for debt relief, the debt should not be forgiven in one fell swoop, but should be retired incrementally (for example, at 10 percent per year), as institutions and norms of accountability are developed.
6. To the extent that commitment to democratic and good governance reforms is absent, assistance should be channeled through NGOs rather than state agencies. In particular, where the political will for good governance is lacking, direct support for the general state budget should cease.26 Leaders must learn that they will pay a heavy price for bad governance. Humanitarian and project-based assistance for public health, medical care, and nutrition should be delivered through NGOs, administered directly by donors, or at least intensively monitored.
7. The principal aid donors must work closely together to coordinate pressure on bad, recalcitrant governments. In most developing countries, U.S. aid constitutes a modest proportion of total foreign aid received. To change elite calculations, donors must impose common conditions for aid.
8. Donors should use their voices and votes within the executive bodies of the World Bank and other multilateral development banks to shift assistance from bad governments to better, more democratic governments. This requires that the nature and quality of a country’s governance be considered when determining assistance levels.27 Professional incentives for resident World Bank and other international development staff should be altered, so that officials are rewarded for considered decisions to withhold or suspend funding as much as for granting it.28
9. Where committed reformers can be identified within the state, donors should work with them. Donors should strengthen the hands of reform-oriented ministers, agency heads, and provincial governors not just by providing technical capacity and resources, but by helping them in the political struggle to “identify key winners and losers, develop coalition building and mobilization strategies, and design publicity campaigns.”29 Even in a corrupt state, one may find some honest officials in the judiciary, the legislature, accountability agencies, and executive departments who would like to do the right thing.
10. Political assistance to reform governance, build democracy, and strengthen civil society should be significantly increased, and a greater proportion of development assistance should be invested in the democracy and governance sector. A dollar invested in improving governance—making it more capable and efficient, more responsive to public needs, more subject to public scrutiny and input, more honest, transparent, and accountable in the handling of public funds, and more respectful of the law—will do more for economic development than a dollar spent in any other sector. No other sector has so many multiplier effects. There is certainly evidence, as noted in chapter 4, that increased levels of democracy and governance assistance do generate improvements in levels of freedom and democracy over time.30 In intractable cases, generating demand for democracy through support for independent organizations, interest groups, social movements, mass media, universities, and think tanks might be the main opportunity to advance development.
11. Donors should stand ready to increase significantly overall levels of development assistance, but only as governance improves. This will enable more states to make use of aid for development.
For several decades, advocates have called for industrialized countries to transfer at least 0.7 percent of their gross national incomes (GNI) annually in official development assistance, and the wealthy countries officially committed themselves to this goal at the 1970 UN General Assembly.31 Most industrialized countries lag behind this target, particularly the United States, which has provided between 0.1 and 0.2 percent of GNI in aid. In 2006, the twenty-two members of the Organization for Economic Cooperation and Development (OECD) fell “some $100 billion short,”32 giving only $104 billion (0.3 percent of collective GNI).33 By this analysis, the rich countries are only giving half or less of what they should. Sachs estimates that if aid to developing countries (not including debt relief and repayments) could be raised to half a percent of rich country income, it could end extreme poverty in the world by 2025.34 But what is the point of dramatically increasing aid if it cannot be utilized for development?
American foreign aid is slowly, partially moving in the direction of greater selectivity and some other principles of aid reform, but much still has to be done. At the 2005 summit of the Group of 8 industrialized powers (G8), the major donors pledged to double aid to Africa by 2010 as part of a visionary commitment to “double the size of Africa’s economy by 2015,” to “lift tens of millions of people out of poverty every year,” and to dramatically improve public health, “save millions of lives a year,” and “bring about an end to conflict in Africa.” But those pledges were predicated on African countries committing to heightened investments in these efforts and to “good governance, democracy and transparency.”35 Two years later, neither side had gone very far toward fulfilling its part of the bargain, in part because there is no mechanism for independent monitoring and evaluation.
Only when countries put in place institutions to ensure accountability, transparency, and freedom will it be possible to effect the kind of sweeping “global compact to end poverty” that Sachs envisions. Then it would make sense to implement proposals to double aid (in net, real terms), to commit it for a longer time period (such as a decade), to enable “scaling up,” and to make it more predictable (so as not to discourage or interrupt investment).36
AMERICA’S CENTRAL ROLE
In recent years, the George W. Bush administration has introduced the most far-reaching reforms in U.S. foreign aid policy since the passage of the Foreign Assistance Act in 1961. Aid has been increased by the largest amount in decades. While some of this aid has gone to American allies in the “global war on terrorism,” such as Iraq and Pakistan, there have also been broad increases in aid and the initiation of programs, such as the President’s Emergency Fund for AIDS Relief (PEPFAR). During its second term, the administration implemented an ambitious reform of aid flows, putting them under the direction of a single authority, a new director of foreign assistance with the dual role of administrator of USAID and deputy secretary of state. Yet these reforms remain too partial and weakly coordinated.
Conceptually, the administration’s most important innovation was the establishment in January 2004 of the Millennium Challenge Account (MCA), an attempt to standardize “selectivity.” MCA was designed to channel significant increases in development assistance to low-and lower-middle-income countries that would compete for the funds on the basis of three criteria: ruling justly (by providing freedom and a rule of law and by controlling corruption); investing in people (especially basic health and education); and promoting economic freedom. Sixteen publicly available indicators, drawn from independent agencies such as Freedom House, the World Bank, and the World Health Organization, are used to measure the criteria.37 The result is a reasonably arms-length process of assessing candidate countries on their merits.38
As Steven Radelet observed, in its first few years, the MCA has met hurdles but has also made progress in pushing U.S. aid in this urgently needed direction. The level of effort has not met expectations. While the MCA aimed to disburse $5 billion of additional aid per year by 2007, in its first four years the total amount appropriated has been only a little over $6 billion, and for the 2008 fiscal year, the MCA has requested $3 billion, subject to congressional cutbacks. However, in focusing these new funds on a small number of countries “that have demonstrated a strong commitment to sound development policies,” the MCA generates country grants that are large enough to make a real difference. Moreover, the MCA allows recipient countries to set their own priorities for how to use the assistance but requires broad societal consultation. In this new process, some of the ponderous bureaucracy of traditional aid is bypassed and recipient countries understand that they will be held accountable.39
Operationally, the MCA has begun to gather momentum, despite criticisms. Its selection process has been sufficiently transparent and credible to stimulate interest from other donors and incentives for aspiring recipients. In recipient countries, the Millennium Challenge Corporation (MCC), which administers the process, “has been on the forefront” of facilitating “broad participation” among government, civil society, and private sector representatives in “determining priorities and designing projects and programs.” The aid is going primarily to very poor countries—seven of the thirteen countries to sign compacts with the MCC are in Africa, representing “over 60 percent of all MCC funding”—and the new aid aims to overcome some of the worst obstacles to equitable growth in Africa by raising agricultural productivity, developing rural communities, and building roads and other desperately needed infrastructure.40
Still, the MCA has conceptual and thus operational flaws: countries are graded on a curve, and political progress toward democracy and accountability constitutes just one of the three criteria.41 As a result, the forty-one countries that, by mid-2007, had qualified for at least “threshold” assistance from the MCC included at least eight authoritarian regimes, and at least one, Uganda, that has seen alarming deterioration in governance.42 Some of the democracies on this list (such as the Philippines and Senegal) have also been regressing to poorer governance, some (like Mozambique and Georgia) lie in a gray zone of limited political pluralism, and others (like Kenya, Albania, and the Kyrgyz Republic) have extensive corruption and weak horizontal accountability. Until these countries are held to absolute standards—a structurally independent judiciary, a free press, and a credible set of laws and autonomous agencies to monitor, control, and punish corruption—the MCA’s great promise will not be realized.
Once countries are held to higher standards of governance, Congress should fully fund the program to its original aim of $5 billion annually. Even if it does so, the MCA will represent only a portion of a total U.S. foreign aid budget that is delivered by USAID and a bewildering maze of programs in the state, defense, agriculture, labor, and justice departments, the Treasury, and some dozen other agencies. The Bush administration has been pursuing overdue reform of the entire apparatus, but still “deeper reforms are necessary.”43 Executive action is not adequate. Congress must, as a full partner, comprehensively update the Foreign Assistance Act of 1961 and its welter of subsequent amendments, regulations, and earmarks, which have generated “33 different goals, 75 priority areas, and 247 directives” stretching over two thousand pages of legislation.44 Far-reaching coordination is needed across the nearly twenty U.S. government agencies that provide foreign aid. By creating a new cabinet department of international development and reconstruction, the United States could much more effectively manage diverse programs and could also establish a prestigious lead institution that would be able to engage other donors in reform efforts. The department could build the long-term professional knowledge and resources—and the capacity for rapid deployment of civilian expertise—that will be needed in the coming decades to rebuild war-torn and failed states.45 It could expand career development assistance staff to enable more direct management of grants, less reliance on for-profit corporations to deliver aid, more effective monitoring, and more intensive interactions with possible aid recipients in both government and civil society.46
With a revamped, more coherent strategy focused on promoting development and freedom, it should be possible to win public support for larger and sustained increases in U.S. foreign aid, especially if that aid is predicated on a country gathering the political will to make effective use of it. What is needed is intelligent “tough love,” not open-ended commitments that amount to codependence when an authoritarian regime grows addicted to foreign aid.
FOREIGN POLICY FOR DEMOCRACY
Political and development assistance are only two of the many tools that the United States and other powerful democracies have at their disposal to promote and advance democracy around the world. As seen in chapters 5 and 6, foreign policy can bring to bear devices and incentives—such as military assistance, diplomacy, moral pressure, trade relations, foreign investment incentives, and societal and intelligence ties—for shaping the character and behavior of states. These can be deployed to induce authoritarian regimes to liberalize and to encourage incipient democratic regimes to respect constitutional norms.
In practice, foreign policy goals often conflict, and not infrequently authoritarian regimes have significant leverage against external forces, particularly if the regime is a major oil exporter or frontline state in the “global war on terrorism.” Sadly, there has been something of a retreat to the logic of the Cold War, when the United States felt compelled to embrace authoritarian states in the struggle against communism. It is rather remarkable how similar the world can seem to that of three or four decades ago if we replace the word communism with radical Islamic terrorism. Even when—as in the case of Pervez Musharraf’s regime in Pakistan and the monarchy in Saudi Arabia—it is not entirely clear which side of the struggle the regime is on, U.S. policy makers are spooked into granting massive military (and in the case of Pakistan, economic) assistance.47 It will require smart minds and strong nerves to find the right balance between promoting freedom and fighting violent ideologies. Yet in the long run the two goals converge into one, and in the short run there are certain lessons from the Cold War that can serve us today.
A vigorous battle for democratic ideas must be waged. Diplomacy is not just about relations between states, it also links societies. International broadcasting can play a critical role in informing people of what is really happening in the world, stimulating honest and open debate, cultivating democratic principles and values, and giving democratic forces hope and inspiration. But to be credible, broadcasting for democracy, whether the Voice of America network or national programs like the Persian-language Radio Farda, must have the editorial independence to report the news objectively and offer differing opinions, even those critical of America. Nothing the United States can broadcast so powerfully conveys the democratic idea as its own willingness to air and tolerate criticism of its policies. In addition, donors should support the translation into multiple languages of philosophical and empirical works on democracy, including contemporary discussions. In the era of the Internet, classic works on democracy that are in the public domain should be made freely and extensively available.48
Societal linkages can ultimately generate political bonds. To win the battle of ideas, we must engage societies directly through a web of educational, economic, cultural, social, and scientific exchanges. Foreign students must again, and increasingly, be welcomed to American universities. Trade and investment should be used to proliferate these ties. While concessions must sometimes be held back to avoid rewarding and legitimizing particularly bad authoritarian regimes, the bias should be for opening closed societies and linking their citizens—including their businesspeople—to ours.
Candor about conflicting interests earns credibility. One reason the image of the United States has plummeted in the world is that Americans are seen as hypocrites—favoring democracy and the rule of law throughout the world so long as it does not in the least constrain how the United States acts in the world. America must show more respect for the law globally and, to quote the Declaration of Independence, “a decent respect for the opinions of mankind,” including adhering to the UN Convention Against Torture, closing the legally unaccountable terrorist detention center at Guantánamo, and joining the International Criminal Court (ICC). Of course a superpower cannot only be guided by faith in democracy and the rule of law; it also has strategic interests to serve, sometimes requiring association with authoritarian regimes. But recognizing rather than pretending away conflicts buys broader credibility for American behavior. The U.S. government may need to pursue mutual security interests with autocrats like Musharraf in Pakistan and Hosni Mubarak in Egypt, but it doesn’t have to call them democrats or praise them for vacuous reforms. Morton Halperin, a former director of policy planning in the State Department under Secretary Madeleine Albright, and his coauthors Joseph Siegle and Michael Weinstein have wisely proposed that when security considerations require the United States to give significant aid to an authoritarian government, the president should declare (and if necessary renew annually) a “security waiver” for the aid; draw the funds from national security—not development assistance—accounts; set a time limit on the special aid; and indicate political reforms that would improve relations.49
Democrats and defenders of human rights need the steadfast support of the international community. In every authoritarian country, ambassadors and visiting leaders from democratic countries should maintain a list of political prisoners and embattled dissidents and minorities, and they should press continually for their release or better treatment.50 In Muslim countries, this list should include Islamists who commit to democratic norms, reject violent methods, and are not credibly charged with terrorist activity. “Words matter, and we can use them to denounce repression and support and inspire democratic forces.”51
The democratic states of the world need to stand together to promote and defend democracy. The easy days of democratic enlargement in the 1990s are over. Authoritarianism is resurgent and newly resilient, and the challenges to extending and defending freedom are now more complex. Far-reaching, multilateral foreign policy can isolate and maximize pressure on recalcitrant authoritarian states, defend democracies threatened with coups, and boost the morale of embattled democrats. Like aid flows, diplomatic incentives to achieve or preserve democracy are always more effective when they are coordinated among the established democracies.
