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

NGO SPEAK

By the time the Iron Curtain parted and exposed private groups to the West, the development community had been supporting NGOs for about a decade.68 NGOs were, as Sampson has noted, “creatures of the global community of democratic rhetoric, of human rights, of grants, conferences, lobbies and politics, which characterizes East-West relations generally.”69 A recent Carnegie Endowment-sponsored study of foreign-funded NGOs in Central and Eastern Europe and the former Soviet Union found that “local groups proliferated in Poland, Hungary, Russia, Kazakhstan, Uzbekistan, and Kyrgyzstan often around issues that Western donors found important, but rarely around issues that locals confronted on a daily basis.”70

The philosophy underlying the NGO movement held that recipient groups could do all sorts of good things that traditional projects attempting “development” through governments could not: build community capacity, propose solutions to local problems, and provide a social safety net. And so NGOs became a doubly attractive opportunity for donors. NGOs were a special favorite of the United States, with its emphasis on funding the “private” sectors of Central and Eastern Europe.

Amid the drive to create NGOs, however, donors often lost sight of the extent to which NGOs, like “civil society,” represent models, that is, ideal representations of how things ought to work. Sampson has observed that “as models, they do not actually operate that way in those countries which are exporting them.”71 The same appears to be true in the countries to which NGOs are exported. The Carnegie Endowment-sponsored study concluded that “Western NGOs have played a large and important role in the design and building of institutions associated with democratic states. These same strategies used by NGOs, however, have had minimal impact on how these new institutions actually function. ”72 A popular handbook for Russian environmental groups translated concepts such as strategic planning, fundraising, and press releases as “strategicheskoe planirovanie,” “fandraizing,” and “press-relizy,” an indication of their alien nature.73

Part of the problem was that the NGOs exported by the donors were frequently at odds with Second World legacies. Whether their ostensible purpose was social welfare, election education, or improvement of environmental conditions, NGOs were seen as furthering “transition,” or at least as being important by-products of these other endeavors. This interpretation assumed that the emerging NGOs were similar to their Western counterparts, despite the very different conditions under which they developed and operated. But many of the donors’ assumptions about how NGOs would operate and what they would contribute were inaccurate in the new contexts. “Voluntary,” “private,” and “philanthropic” initiatives were permeated by the market and politics. NGOs could play productive roles, but they were not necessarily equipped to be the building blocks of democracy that the donors envisioned.

Even the vocabulary used to describe the concept of NGOs, usually adopted from English, was confused in the context of Central and Eastern Europe. “Third sector,” “independent sector,” “private voluntary sector,” “nonprofit sector,” “charitable organization,” and “foundation,” defined in varying ways even in the West, all were mouthed by Eastern counterparts, often with only the vaguest notions of their meanings and of the legal-regulatory regimes from which they sprang. Jakub Wygnański, a sociologist and expert on Central European NGOs, has observed a “lack of communication” between East and West in which people used the same terms to mean different things.74

For instance, NGOs in Central Europe generally incorporated themselves as either foundations or associations. Registering as a foundation typically provided more favorable legal and tax advantages than registering as an association. Foundations were usually service-providing groups that did not give grants (as they would have in the West), but raised money in order to carry out activities themselves. Foundations encompassed a number of types of organizations, including larger and more stable NGOs and the region’s few grant-making organizations. On the other hand, most small, grassroots-oriented NGOs organized around common interests were registered as associations.75 By 2000, in Poland, for example, there were more than 5,000 foundations and some 21,000 associations.76

The Support for East European Democracy (SEED) legislation of 1989, which authorized millions of dollars to the region to “promote the private sector [and] democratic pluralism,” specified that funds should go only to private entities in Central and Eastern Europe. But at the time the donors arrived, institutional arrangements between private and state sectors were shifting. Given the complex (and diverse) interrelationships of state, private, and civil societies that had emerged in the region, there was evidence to suggest that these relationships would eventually take a different shape from those generally familiar to donors. The donors’ faith in the private sector also appeared simplistic in light of the complex and diverse state-private institutional arrangements that Western democracies themselves had developed. (For example, most American and British NGOs, although “private,” receive some governmental funding.)77 Given the fact that the state remained a major source of resources, demarcation between private and governmental organizations was often obscure.

As many different forms of ownership emerged in the latter days of communism, state employees such as managers “acquired” state enterprises or portions thereof, all the while maintaining some relationship with the state. After 1989, private-state institutional arrangements built on, and further developed, this model. For example, some Hungarian and Polish officials interested in attracting Western funds earmarked for NGOs had little trouble bypassing the private-sector requirement. They started “nonprofit” organizations attached to their state agencies. While state employees actually received the money, it still could be categorized as going to the private sector.

Even in Poland, which has enjoyed some success in its economic reforms, ambiguous state-private relationships appear to be institutionalized. Since 1989, legislative initiatives have enabled the creation of corporate, profitmaking bodies, which are formally nongovernmental but that use state resources and “rely on the coercive powers of the state administration,” as sociologist Kamiński has analyzed it.78 These bodies make it legally possible for private groups and institutions to appropriate public resources to themselves “through the spread of political corruption.” Kamiński elaborates:

One way of obliterating the distinction between public and private consists in the creation of autonomous institutions, “foundations” or “agencies” of unclear status, with broad prerogatives supported by administrative sanctions, and limited public accountability. The real aim of these institutions is to transfer public means to private individuals or organisations or to create funds within the public sector which can then be intercepted by the initiating parties.79

These state-private entities, lying somewhere between the state and the private sector,80 are enshrouded in ambiguity. They are part and parcel of the “privatization of the functions of the state,” as Piotr Kownacki, deputy director of NIK, the Polish government’s chief auditing agency, puts it, and they represent “areas of the state in which the state is responsible but has no control.”81 The entities’ “undefined functions and responsibilities” are a defining characteristic, as Kamiński explains: “From the government’s point of view, [these entities] have the legal status of private bodies, whereas from the point of view of the collectives controlled by these bodies, these are public institutions.”82