Janine Wedel - Collision and Collusion - The Strange Case of Western Aid to Eastern Europe

Finally, whether privatization aid was worth the problems seems a fair question. As we have seen through Ursus, Monor, and other troubled enterprises in the region, the very targets (large, state-owned enterprises) and design (ad hoc or delivering aid outside local privatization bodies) of assistance could cause problems of perception, without necessarily producing favorable results in terms of restructuring or privatization. Although development agencies purport to offer impartial solutions and the expertise they provide is presented as neutral and technical, development ideologies have unintended consequences and perform sensitive political functions.103 As anthropologist Hobart has put it, “Whatever its merits, scientific knowledge applied to development is not neutral, as is so often claimed, nor are the implications of its use.”104

In Central and Eastern Europe, there were special causes for caution given the region’s legacy of integration of politics and economics. Privatization aid there was inherently political, and, even if delivered under the guise of neutral, technical help, perceived by recipients as politically charged. Many Central and Eastern European enterprise managers and workers viewed the “neutral” technical advice they received from Western experts as anything but neutral. And so suspicion about donors’ motives clung to any claim that the aid was politically disinterested or benign. In some cases, donors and their consultants may have inadvertently rekindled the kind of suspicion and collusion between politics and economics that had characterized communism.

A BETTER WAY

Another pertinent question was the extent to which technical assistance relationships were designed to be useful. If the consultants and aid representatives were such a problem, why didn’t the recipient countries send them home? That was not an option that recipient officials generally entertained. Aid was, in many respects, not an end in itself, but part of a larger package of new relations between East and West. Often, aid was more a matter of maintaining good relations and contacts and of occasionally receiving useful hardware. (Equipment and technical assistance sometimes came as a package.) Some officials conceded that “occasionally, [the consultants’] advice or contacts are useful” or “we need the equipment that the consultants bring.” However, often the working principle was “the donors pretend to help us, and we pretend to be helped.”

The lack of overall strategy and productive working relationships between Eastern and Western agents greatly complicated technical assistance to the Second World. The limited cases of effective technical assistance were those in which relationships between donors and recipients made sense. In such cases, assistance was well targeted: Specific recipients identified the type of expertise they needed, handpicked the consultants, and developed effective working long-term relationships with informed oversight from aid agencies.

Some of the technical assistance rendered under the British Know How Fund fit this bill. Although small in comparison to EU and USAID programs, the Know How Fund earned a favorable reputation among many of the region’s officials early in the aid effort. With few strings attached, recipient officials could select advisers of their choice to be paid by the Know How Fund. For example, several long-term, hands-on advisers from the London School of Economics were in residence in Poland’s Ministry of Finance. In such cases, the Know How Fund became known for the leeway it allowed recipients, its flexibility, and its relative speed. Zdeněk Drábek, former chief aid coordinator of Czechoslovakia, says that it made decisions “very quickly” and “without much bureaucratic procedure.”105

Another case of effective technical assistance appears to be some of the expertise provided to the region through the U.S. Treasury Department’s Financial Sector Technical Assistance Program. Although funding and strategies were provided for in inter-agency agreements, Treasury hired the technical advisers. This contracting arrangement enabled flexibility in part because the agencies were not subjected to all of USAID’s contracting constraints.106 The experts, requested by officials in recipient institutions, were hired for specific tasks, usually involving taxation, budget, banking, and government debt. In 1998, in response to a growing perceived threat of international financial crime, the Treasury Department added a law enforcement program to assist foreign governments in revising their laws and reorganizing their ministries to combat financial crime, organized crime, and corruption.107

Under Treasury’s program, short-term specialists were brought in when deemed advisable to address specific needs related to the overall agenda.108 Treasury’s Tax Advisory Program, for example, was developed by a program director who traveled to the various countries and, having conducted fieldwork for several weeks at a time, learned the identities and the needs of the relevant players. Prospective advisers were then screened and interviewed by both parties. Salvatore Pappalardo, an American adviser to Poland’s chief debt negotiator, received an award from the Polish government for his help in successful debt negotiations. Pappalardo has related that Poles “like to see commitment to understanding the situation and working with them.”109

In short, such long-term assistance was helpful because it generally was seen by the relevant host officials as impartial, professional, and able to accomplish what local firms could not—at least not early in the economic restructuring process. Long-term programs avoided the lack of continuity and follow-up that often plagued short-term ones. They could be effective if they were integrated into the institutions that they were trying to help and were well received.

To be effective, aid must be structured in a depoliticized way that can largely preclude interference in host-country politics and problems of local perception. Assistance can be helpful when consultants are seen by local officials—and a larger public—as advocates for the recipient nation. Aside from having expertise to offer, a crucial feature of effective technical assistance appears to be neutrality and the appearance of neutrality. Providing strategic support and training to key institutions was a related area where aid sometimes could help to build nonpartisan, lasting institutions independent of political whim. Some aid provided to the parliaments of the region was invaluable in this regard.

Two small programs that, according to many accounts, were most effective were the Senate-initiated Gift of Democracy program and the Frost Task Force program of assistance to the parliamentary institutions of Central Europe, which received support from the U.S. Congressional Research Service. The effort provided information technology and resources to parliaments, as well as training for parliamentary staff, including research and library personnel. For example, the Gift of Democracy program purchased computers for the Polish Parliament and Senate. This enabled them to set up a local-area network with local databases and connections to American and European databases.110

Wiesław Staszkiewicz, director of the Polish Parliament’s Bureau of Research, said the program provided “very significant help” to his bureau, which supplied information and training for representatives (like the U.S. Congressional Research Service), expert opinions on prospective legislation, and monitoring as requested by the Parliament. Especially helpful was the training provided in Washington, where people learned how reference services and libraries could be organized effectively and where they made valuable contacts that they could continue to call upon.111