Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

With regard to the policies that became standard international development fare in the 1980s, the International Monetary Fund (IMF) and the World Bank tied “structural adjustment programs” (SAPs) with loans to countries burdened by debt. These international financial institutions offered SAPs to nations as varied as El Salvador, Bangladesh, Ecuador, Argentina, Thailand, and Tanzania—and new loans to implement them. The goal typically was to contain inflation, stabilize currencies, promote exportled growth, and make government more efficient. For an analysis of the effects of SAPs, see the work of William Easterly, for instance, “The Effect of IMF and World Bank Programs on Poverty,” World Bank, December 2000, http://papers.ssrn.com/paper.taf?abstract_id=256883, and The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin Press, 2006).

Certain notable states, such as China and India, have demonstrated more autonomy from many policies of the international financial institutions. This is not to say that they have skirted neoliberal policies; homegrown forms of neoliberalism can be found. See, for example, Wang Hui’s China’s New Order: Society, Politics, and Economy in Transition (Cambridge, MA: Harvard University Press, 2003), especially pp. 44, 96–115, 118–199; and Aradhana Sharma’s Logics of Empowerment: Development, Gender, and Governance in Neoliberal India (Minneapolis: University of Minnesota Press, 2008).

With respect to states demonstrating autonomy from international financial institutions, see, for instance, John Ralston Saul, The Collapse of Globalism and the Reinvention of the World (Toronto: Viking Canada, 2005), pp. 232–233. As Saul writes, the International Monetary Fund, the World Bank, and other organizations were created by the West a half century ago “to monitor a continued evolution along the same path among non-Western countries” (p. 232).

Democracy-challenged countries into which neoliberal policies were introduced include, for instance, Nicaragua, El Salvador, Somalia, and Zaire, which the two superpowers had turned into Cold War battlegrounds through their support of opposing dictators and military groups.

Governance scholars Laura S. Jensen and Sheila S. Kennedy challenge the neutrality of neoliberal-style reforms, arguing: “It remains to be seen how the new governance can achieve efficiency and effectiveness without sacrificing the democratic norms of equity, accountability, and due process that are fundamental to our political order and constitutional culture.” Laura S. Jensen and Sheila S. Kennedy, “Public Ethics, Legal Accountability, and the New Governance,” Ethics in Public Management , H. George Frederickson and Richard K. Ghere, eds. (Armonk, NY: M. E. Sharpe, 2005), p. 235.

For a list of various Cold War interventions, see Easterly, The White Man’s Burden , pp. 314–316. For analysis of regimes installed by the United States, see Jonathan Kwitny, Endless Enemies: The Making of an Unfriendly World (New York: Congdon & Weed, Inc., 1984).

On the issue of neoliberal reforms occasioning the reorganization of government and society, see the work of anthropologist Carol Greenhouse (forthcoming volume on Politics, Publics, Personhood: New Ethnographies at the Limits of Neoliberalism , Carol Greenhouse, ed.); and legal analyst Alfred C. Aman, Jr., Democracy Deficit: Taming Globalization through Law Reform (New York: New York University Press, 2004).

20. The concept of “quasi-nongovernmental organization” was coined by Alan Pifer in 1967. Alan Pifer, “Letter: On Quasi-Public Organizations; Whence Came the Quango, and Why,” New York Times , September 5, 1987, http://query.nytimes.com/gst/fullpage.html?res=9B0DE2D61030F936A3575AC0A961948260.

21. The term “privatization revolution” is from P. W. Singer’s Corporate Warriors: The Rise of the Privatized Military Industry (Ithaca, NY: Cornell University Press, 2003), especially pp. 66–68.

Data on the privatization explosion and its rate of increase in the 1990s are from Martin Van Creveld, The Rise and Decline of the State (Cambridge and New York: Cambridge University Press, 1999), p. 375–377, and Adrian T. Moore, ed. Privatization 98:12th Annual Report on Privatization (Los Angeles, CA: Reason Public Policy Institute, 1998).

The quote about elites’ view of privatization is from Harvey Feigenbaum and Jeffrey Henig, “Privatization and Political Theory,” Journal of International Affairs , no. 50 (Winter 1997), p. 338.

Ian Thynne and Roger Wettenhall investigate the nature and diversity of privatization activities and observe a range of state-private mixes. See, for instance, Roger Wettenhall and Ian Thynne, The Asia Pacific Journal of Public Administration 27, no. 2 (December 2005), pp. 111–116.

For documentation and details regarding Western-underwritten privatization in central and eastern Europe, see Janine R. Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe (New York: Palgrave, 2001), especially chapter 2.

22. The quote on bureaucracy is by Jan Aart Scholte: Jan Aart Scholte, Globalization: A Critical Introduction (New York: St. Martin’s Press, 2000), p. 5.

23. Francis Fukuyama’s The End of History made this view popular. Francis Fukuyama, The End of History and the Last Man (New York: The Free Press, 1992).

24. For analysis of the increased role of nonstate actors, see, for example, Susan Strange, The Retreat of the State (Cambridge, UK: Cambridge University Press, 1996); Jessica Mathews, “Power Shift,” Foreign Affairs 76, no. 1 (January/February 1997), pp. 50–66; and Anna-Marie Slaughter, A New World Order (Princeton, NJ: Princeton University Press, 2004). Slaughter outlines governance through a web of global networks that are governed by a variety of entities, including NGOs, segments of states, and international organizations.

On transnational networks promoting new policies and practices, see Diane Stone, “Transfer Agents and Global Networks in the ‘Transnationalization’ of Policy,” Journal of European Public Policy 11, no. 3 (June 2004), p. 546. On transnational advocacy networks, see Margaret E. Keck and Kathryn Sikkink, Activists Beyond Borders: Advocacy Networks in International Politics (Ithaca, NY: Cornell University Press, 1998). On corporate policy interlocks, see, for instance, William K. Carroll and Colin Carson, “The Network of Global Corporations and Elite Policy Groups: A Structure for Transnational Capitalist Class Formation?,” Global Networks 3, issue 1 (Abstract, January 2003), p. 29. On international commerce and state and international authority, see, for instance, A. Claire Cutler, Virginia Haufler, and Tony Porter, “Private Authority and International Affairs,” A. Clair Cutler, Virginia Haufler, and Tony Porter, eds., Private Authority and International Affairs (Albany, NY: SUNY Press, 1999), pp. 3–27.

For an understanding of the darker side of the new sparsely governed arenas, see Moisés Naím, Illicit: How Smugglers, Traffickers and Counterfeiters are Hijacking the Global Economy (New York: Random House, Inc., 2006); and R. T. Naylor, Wages of Crime: Black Markets, Illegal Finance, and the Underworld Economy (Ithaca, NY: Cornell University Press, 2004).

25. Figures on money laundering are from Moisés Naím, “It’s the Illicit Economy, Stupid: How Big Business Taught Criminals to go Global,” Foreign Policy (November/December 2005), p. 95. See also Moisés Naím, Illicit: How Smugglers, Traffickers and Counterfeiters are Hijacking the Global Economy . The quote about illicit activity as taboo is from Raymond Baker, “Dirty Money and Its Global Effects,” International Policy Report (Washington, DC: Center for International Policy, January 2003). See also Raymond W. Baker, Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System (Hoboken, NJ: John Wiley & Sons, Inc., 2005).