U.S. Policy for the Balkans (Excerpt)

Testimony before the Committee on International Relation
U.S. House of Representatives
August 4, 1999

My comments today are based on my extensive study of U.S. assistance to central and eastern Europe, Russia and Ukraine over the past 10 years. I'm not an expert on the Balkans, but my research on U.S. assistance programs has given me an acute awareness of the promises and pitfalls of aid to eastern Europe, many of which are discussed in my recent book -- "Collision and Collusion: The Strange Case of Western Aid to Eastern Europe" -- and in previous testimony before this committee and others.

The following six cautionary lessons arise from my research.

First, we need to constantly remind ourselves that aid is by no means just a technical matter. It's not just about getting the economic prescriptions right. Aid is a complex task of societal, political and social challenges that must be taken into account if it is to have the desired stated goals. It must be well conceived, well planned and implemented systematically in accordance with those challenges.

It's important that the beneficiaries of the aid are not just western consulting firms looking for fat contracts, but also the people and the communities that we want to help.

It would be elusive to think that our aid programs alone could build democracies and market economies. On the other hand, poorly conceived and administered aid certainly can do damage, both to the region and to the image of the United States there. As Joseph Stiglitz, chief economist at the World Bank, once suggested, we should adopt, quote, "a greater degree of humility and acknowledge that we do not have all of the answers." Second, we should avoid the so-called Marriott-brigade syndrome. The Marriott brigade was a term the Polish press coined in 1990-91, for the short-term fly in/fly out consultants who were paid to deliver technical assistance to eastern European governments and officials. The consultants stayed at Warsaw's pricey Marriott and hurdled among five-star hotels across the region, collecting data and advising on economic and political reform.

Recipient officials, many of whom were new at their jobs, welcomed the consultants at first. But after hundreds of fact-finding and first meetings with an array -- an endless array of consultants from donor organizations and the international financial institutions, many officials were disillusioned and frustrated.

We must avoid the situation in the current effort. Bringing in team after team of high-priced consultants, many of whom will never return, creates a burden for local officials and stirs resentments against the consultants and the donors.

It is important not to duplicate fact finding and to keep first visits to a minimum.

As we have seen in eastern Europe, local perceptions of aid on the part of officials, politicians and citizens matter, and sometimes even shape aid outcomes.

Back to top

Third, it is crucial to carefully and prudently select our prospective partners and representatives. We must be careful not to play favorites among competing local interests and beneficiaries.

The record of U.S. aid to Russia in particular shows that selecting specific groups or individuals as the recipients of uncritical support both corrupts our favorites and de-legitimizes them in the eyes of their fellow citizens.

Given the discretion that political functionaries in the region have to appropriate large portions of state resources and budget to themselves and to their cronies and the considerable corruption on all sides, there is an ever-present danger of diversion of foreign aid. We must also be aware of potential collusion among consultants and local elites towards that end.

As we have learned, or should have learned in Russia, putting aid in the hands of just one political/economic group or clan creates opportunities for the misappropriation of monies to private and/or political purposes and very quickly undermines donor efforts at democracy-building.

Further experience shows that it is simply wrong to think that institutions can be built by supporting specific individuals instead of helping to facilitate processes in the rule of law. Many reforms advocated by the international aid community, including privatization and economic restructuring depend on changes in law, public administration and mindsets and require working with the full spectrum of legislative and market participants, not just one group or clan. Fourth, we should help to build administrative and legal structures at the level of cities, regions and towns. In general, the lower the administrative level of our efforts, the better. Any donor efforts must depend on not just speaking with politicians at the top, but on working with an array of local people and communities.

U.S. officials and advisers need to establish contacts with a wide cross-section of the regional and local leadership, politicians, social and political activists and community workers. For example, some aid-funded programs to develop the economy from the bottom up have been useful and have created good will.

Fifth, we should be clear-eyed about the real potential of the so-called independent sector and non-governmental organizations, or NGOs. Donors often invest high hopes in the ability -- in the ability of NGOs to build democracy. They often assume that NGOs are similar to their western counterparts despite the very different conditions under which they developed and operate.

But in eastern Europe, the officials -- the individuals and groups, rather, charged by the West with public outreach, often the most vocal local players were not always equipped for that role. At least in the early years of the aid effort, NGOs often distributed western perks to themselves and their peers on the basis of favoritism rather than merit. Here again, there can be no substitute for local -- for donor knowledge of local politics, conditions and culture.

The challenge for the donors is in enlisting the expertise of people sufficiently informed, intuitive and committed to aid efforts in the new environment and in designing assistance to foster these efforts.

My sixth point, and final point is that the United States should embark on a broad-based policy to encourage governance and the rule of law. To foster reform, I've learned from my study in Eastern Europe, donors needs to work with a broad base of recipients and support structures that all relevant parties can participate in and effectively own, not just one political group or clan or faction.

This is an admittedly not an easy task. The major challenge is how to help build bridges in a conflicted environment with historical distrust and many competing groups, and very few cross-cutting ties among them. Although my no means easy, the task of aid workers is precisely to build contacts and to work with all relevant groups toward the creation of transparent, non-exclusive institutions and against the concentration of influence and aid in just a few hands.

Thank you very much.

Back to top


U.S. REPRESENTATIVE JOHN COOKSEY (R-LA): Just before we move to the next witness, you're an anthropologist by education?

WEDEL: I am.

COOKSEY: In 10 words or less what do you think are the prospects of achieving this last, this sixth goal, about the broad-based policies and the aid workers being able to accomplish it, viewed in the history of -- in light of the history that's occurred in this area?

WEDEL: Well, I began my statement by saying that I'm not an expert on the Balkans, but my experience in looking at aid programs in further east, central and eastern Europe and Russia and Ukraine. Russia is a very difficult environment to work in as well, even though the historical animosities aren't nearly as much at the forefront at the moment and the country has not been wrecked by war as has Bosnia. But my experience is that there are competing political, economic financial groups at the very local level that -- and the task is to begin to create incentives for groups to work with each other and not just to play favorites by giving one group aid and aid resources over others. That is a very destructive aid policy and my experience is that that can be done. It's not easy to do. It requires a lot of local knowledge. But if you do have money that can provide an incentive and you do have people who know the local situation. Those together can put together programs that will provide incentives for people to do reasonable projects. It can happen but it's not easy and it requires a lot of local knowledge.

COOKSEY: And this gets back to your third point about prudent selection of the partners that you would be doing this with.

WEDEL: Absolutely.

COOKSEY: Where has -- what model do you think exists for this having been done successfully? Where in Europe or in any other part of the world? Can you think of a particular...

WEDEL: Yes, I would point to -- I would point to several kinds of programs. One that I looked at very closely was actually a program that was in part sponsored by a Congressional Research Services and some of the congressional committees. And that operated effectively in Poland and I believe in some countries further east. And what that program was about was building an institution for -- to provide information and infrastructural support to Congress -- to everybody in Congress. At first 1990, '91,'92 this was an absolutely revolutionary idea. You mean you're going to help those guys, not just us? That was a revolutionary idea. But eventually people saw that it could be done. They saw that independent information, that an infrastructure, a system could be built that everyone could buy in to, that it wasn't just for me, it wasn't just about politics for me and my group, but it could be about for any group. And they eventually saw in Poland the value of having such an independent institution as a Congressional Research Services. And the United States aid played a major role in helping to create that. As I said, it was really a different concept at the beginning because people were not interested and certainly not accustomed to sharing information with one another, with a different political economic group. It was a foreign idea. But it was something that could be done if you have the right people on the ground who understood the problems and the right resources.

COOKSEY: You know, can you come with another example because really Poland is a rather homogeneous group with one religion and they have done very well there, but the Polish people had a lot more structure than anyone in the Balkans it seems.

WEDEL: Well, that's what it may look like from the outside. But in fact there were many groups that were competing on the ground for resources and when you come in with a foreign aid, a lot of foreign aid money, quickly you find that you have a lot of competitors if you're a local group that's operating on the ground. And I think in that respect the Balkans will be very similar. The animosities may be longer lasting.

COOKSEY: From an economic standpoint. From the fact that they are all looking for this aid, this economic aid. And you think you can overcome their ethnic, religious, racial diversity then?

WEDEL: Well, to overcome it is one thing. I think that it is very important to really emphasis local administration and legal structures and really to help to build those infrastructures. Without those infrastructures in place, there is probably not much hope...


WEDEL: .... of overcoming those animosities. But the only choice we have is to work with those -- to help develop those infrastructures. That's the only choice we have. If we come in and say we're going to support this group or another, we are at the outset doomed to failure.

Back to top


© , Janine Wedel