In the wake of the Gulf war, the question of democracy in the Middle East has finally caught up with Washington, but in ways that reinforce dominant strains of Cold War thought and action. Witness the regular depiction of Islam and Islamist movements in terms once reserved for communism, reflecting an artful mix of representation and prescription meant to discourage meddling with the authoritarian status quo. Within the community of Middle East scholars and academic experts, though, one finds people less ready to write off the region as an “exception” to global trends. To varying degrees, this current believes that US policy can strengthen a second wave of liberalism in the Middle East.

Proponents of such a course have found allies in the ranks of the US Agency for International Development, presently in search of a post-Cold War raison d’etre. Over the past several years, hundreds of thousands of dollars have been invested in new doctorates and research programs prospecting for “civil society” in the Middle East.

Thirty years ago, the Kennedy and Johnson administrations of the 1960s listed the promotion of pluralism and democratic institution-building as the cornerstone of US development policy toward the Third World. Academics supplied the doctrines and rationales. This voluminous archive has long since laid undisturbed, alongside the savage postmortems that were required reading in the 1970s. Today’s younger scholars and development practitioners owe it to themselves, and to those they seek to influence, to return to these sources, to specify what is new in their own theories and, most critically, to show why contemporary political engineering projects by US agencies are any less likely this time to retard indigenous democratic currents and institutions. [1]

Beneath the latest fashionable rhetoric, “democracy” in the hands of USAID serves as an instrument for the pursuit of other ends — specifically, more market-friendly economies. The complication for the neo-instrumentalists is that the people likely to be harmed by economic reforms in the short run will exercise their rights under genuinely democratic political reforms to choose other arrangements. Unwilling to subject their real purposes to the “uncertainty” that, as Columbia University’s Lisa Anderson reminded a Congressional subcommittee, is the “cornerstone” of democratic practice, USAID appears intent on a very selective empowering of civil society. [2] This is precisely what happened during the 1960s and 1970s.

Unlike then, however, USAID today occupies an increasingly marginal role in the making of US foreign economic policy. The recycling of 1960s development doctrines and ideas is driven by nothing so much as the survival quest of an embattled bureaucracy, its entourage of consultants, and its farm belt and services sector clients in Washington, all seeking pieces of the rent in an era of shrinking resources.

Deja Vu Democracy

The first time around, following Kennedy’s victory in 1960, “multinational liberalism” paved the way for large financial transfers to the Third World (and to US exporters, construction and services, shippers, heavy equipment manufacturers, engineering firms and so on) via the newly created USAID. The Alliance for Progress was envisioned as the means to create liberal democracies in Latin America. During the Johnson years, Congressional backers of multinational liberalism pushed the connection between aid and democracy further in the form of the “Title IX” amendment to the Foreign Assistance Act (“Utilization of Democratic Institutions in Development”). [3]

These “political development” programs came under withering attack at the end of the 1960s, in the context of growing conflicts over domestic welfare, foreign policy priorities and intensified international competition. Critics on the left argued that “promoting democracy” abroad was little more than a fig leaf for a global project of coercive military and economic expansion. One “pragmatic” critique is that the social and economic prerequisites for consolidating liberal democracy are weak or non-existent in many parts of the globe, and that the competing forces shaping US foreign policies are too complex to permit the massive resource transfers and related single-minded commitments ostensibly required in order to “engineer” democracy. [4] Imagine, argues one disillusioned mid-level Reagan administration official, that Bonn or Tokyo determined that racism posed a threat to stability in the US and proposed a $10 million, five-year project to help end racism, for instance, by hiring consultants to design racial sensitivity seminars for small groups of US executives and officials. [5]

This conventional critique posits that the magnitude of the task overwhelms the well-intentioned but misguided efforts of particular agents and agencies. Radical critics see little merit in a pattern of explanation that emphasizes failure as the systematic outcome of an ostensibly core component of US foreign policy. Why is it, they ask, that policymakers seem unable to adjust or improve on their strategy? Often “democracy” is a rhetorical cloak thrown over other objectives, usually economic. But is there more to it?

The Quest for Rent

If we ask what is the “function” of USAID in the contemporary era, then the answer is fraught with problems of “standpoint” and judgments about consequences. [6] Successive cadres of field officers, private subcontractors and interns working, say, in Minya in the Egyptian countryside to reform local government, monitor human rights or collect data on mechanization, are likely to answer in ways that reflect well on their own faultless intentions.

My answer is that USAID resembles parts of what Robert Springborg describes as Egypt’s sprawling “rent-seeking” state and society. [7] (As we use the term, rents are subsidies or additional income accruing to monopoly producers, including the price bureaucrats can command for issuing licenses and the like.) [8] USAID exemplifies the “parasitic” relationship Springborg describes between a “self-interested” and embattled public authority and the array of clients it serves.

USAID and its institutional predecessors, from the moment of their inception, have been primarily a means for pursuing New Deal-era mercantilism and for subsidizing domestic production and incomes, beginning with agriculture. [9] The administrators who oversaw each incarnation of the development bureaucracy were constrained by this organic relationship with domestic interests and rent-seeking.

Since the 1960s, according to the General Accounting Office, whatever organizational coherence and capacity might have existed in the foreign aid sector has dissipated. Programs have been buffeted by the competing agendas of other federal agencies, Congressional programming decisions and lobbying by special interest groups. [10] USAID is a cash cow for privileged services industries, notably for the development departments of large parastatal “firms” stretched across the US, including the Universities of Michigan, Wisconsin and California. [11]

USAID experienced a boom in the Middle East with the billions allocated to bind the Camp David accords and the Egyptian-Israeli peace treaty. As sizable windfalls fell to engineering, construction, export and services firms, academic entrepreneurs scrambled for shares. At MIT, to mention just one site, professors were securing post office boxes for the “private consulting firms” they established to increase their take. The situation was similar to that in Egypt, where consulting firms in the warrens of Cairo’s business district and its tony suburbs were multiplying faster than the country’s population. Over this period, according to US government investigators, USAID has posted a record of pervasive “mismanagement” and an absence of the “skills necessary” to oversee this vast rent-collecting circuit.

Today, USAID’s principals are struggling to protect what they can of their diminished role and shrunken personnel base in post-Cold War foreign policy. [12] Agency managers lack the power to preserve USAID’s most basic interests against encroachment. Because of its notoriously poor accounting system, there is no accounting for hundreds of millions in dollars and property. Institutional histories of subsidy-dispensing public agencies typically include cycles of changing fashions in program objectives and priorities. “Development” is the public policy equivalent of Paris haute couture: relief and recovery, technical assistance, planning, privatization, education and training, public administration, import substitution, export promotion, internal security, human rights, police training, tropical rain forest protection, women and development, appropriate technology, small business support and now, again, democratic institution-building. [13]

The latest democratization initiative follows the late 1980s neoliberal “Washington consensus” on structural adjustment. Today’s prescriptive orthodoxy about the proper timing or “sequencing” of reforms — the idea that democracies will negotiate the painful path of structural adjustment less well than fist-wielding authoritarian orders — reflects a long strain of Kemalism in American development theory and practice. USAID’s democracy project would operationalize a strategy for “supporting processes of democratic institutional reform that will further economic liberalization objectives.” [14] The specific prototype for the Middle East program is USAID’s lusterless effort in sub-Saharan Africa, where the logic of structural adjustment runs up against imperatives of regime survival and political opposition from state-sector managers, urban consumers and labor unions. The consulting divisions of giant accounting firms like Coopers and Lybrand are among the biggest actors in the international democratization and liberalization industries. [15]

Some might be tempted to overstate the connection between corporate involvement and a thinly veiled disregard for the basic rights of labor in the plans for building pluralism, enhancing accountability and developing “tactics for managing opposition.” [16] The best articulation of corporate interests, and thus of why AID appears so impervious to “administrative accountability,” is found in USAID’s own “Policy Paper” for the democracy program, which portrays the problem in Egypt and elsewhere as one of “elite segments of society” using “the state as an instrument to pursue their own narrow interests.” [17]

The similarities between USAID’s orthodox view of Egyptian governance and the GAO’s depictions of USAID are arresting. This “instrumentalist” view helps to solve a perennial puzzle in the analysis of US foreign economic policy. US officials consistently argue that USAID has little, if any, significant impact on policies or decision-making in Egypt, Tunisia or elsewhere. So why do successive US administrations persist in deploying these apparently ineffective interventionist strategies? The argument that USAID has been captured by particular interests and agendas resolves the apparent paradox. In the corporate services sector, big firms seek the cushion of multimillion dollar government contracts in times of recession; small firms rise and fall on their ability to capture a share of foreign aid rents. By comparison, the low-level rent-seeking of individual academic entrepreneurs looks relatively innocuous: some billable hours, a study that can be rewritten and submitted to the Journal of Development Studies or Comparative Politics, a few days consulting in Washington, a trip to Cairo or Sanaa.

A moment’s reflection on the interests that currently operate in large and small academic enterprises goes a long way toward understanding both the ready recruitment of scholars as auxiliaries in the democracy industry and the degree to which cynicism has come to replace criticism in the post-Cold War intellectual repertoire. This is a time when academics confront retrenchment: university budget cutbacks, multi-year salary and hiring freezes, and the elimination of programs if not whole departments.

Incentives for rent-seeking are powerful. For example, at the 2,400-student university where I now teach, “development” is a full-fledged, professional degree-granting department, and is under current threat of internal “structural adjustment.” Its two co-directors spend much of their time pursuing subsidies (“grants”) from USAID that pay a large part of the program’s operating budget. Across the country, bigger programs in the University of California have to refine their entrepreneurial (rent-seeking) skills or preside over their own decline. Under such circumstances, there are few incentives for contemplation of the remarkably unselfconscious premises, assumptions, doctrines and project proposals from the “classic” era of political development and instrumentalist democracy-building in the 1960s. Nor is the elaboration of this particular line of analysis likely to return much in the way of excursions to the Mena House or to Aix or Bellagio where current prospects for civil society and democracy in the Middle East are properly contemplated free of “Hegelian mysticism or Gramscian scribblings.” [18]

Though parts of the left’s intellectual arsenal have been consigned to the scrap heap, the idea that democracy is incompatible with the projects and logic of interventionism has stood the test of time. Refining the model of the academy as one more set of rent-seeking enterprises in the US political economy, and a partner in the alliance that sustains USAID’s fragile position in post-Cold War Washington, inevitably invites dismissive rejoinders of “vulgar Marxism” from the industry’s theorists, and charges of “isolationism” from a more pragmatic caste of university-based development division managers. Conventional for-profit sectors and some economists know better. It is not populist farmers and fiscal conservatives in Congress who are leading the current call to abolish AID. Rather, chemical firms and other competing interests in “the environmental industry” propose to dismantle it as part of a “new mission for foreign aid,” aimed at redirecting the flow of federal subsidies to relatively more competitive parts of the US manufacturing and services sectors. [19] If these moves are successful, it by no means spells doom for those university-based institutions and full-service consulting firms such as Chemonics — the primary contractor in the USAID democracy initiative and a subsidiary of a California-based agroindustrial enterprise with a well-documented addiction to USAID rents. [20] The potential for future rent-seeking is formulated in “new” versions of 1970s-era doctrines of “grassroots development” and “sustainable agriculture.”

In this scenario, academy-based democracy projects stand little chance of generating sufficiently large rents, given political realities in both the US and in the Middle East. Political scientists will need to find other rubrics for their entrepreneurial efforts. Those stray Middle East specialists who are only now adopting the neoliberal economic orthodoxy will find none of the concentrated interest or ideological consensus in promoting structural adjustment in Egypt, Jordan, Tunisia or Algeria that characterized US programs in Latin America in the past or the current initiatives in Russia and Eastern Europe.

Consider an unlikely scenario: Buoyed by modest gains for democratic and liberalizing reformers and “authentic” Islamic pluralists in Cairo, Tunis and Amman, USAID’s democratic-institutions initiative receives expanded funding. Authoritarian regimes, together with their backers in the Washington Institute for Near East Policy and the Council on Foreign Relations, are in retreat. The environmental industry obtains its subsidies elsewhere. Political scientists become more central to the elaboration of doctrines, the building of new study centers and the circulation of aid rents than at any time since the Kennedy era. If this scenario prevails, only one thing can be asserted with near certainty: Sometime in the early years of the next century, a dissenting liberal cohort will find that, despite the best intentions of theorists and practitioners, the 1990s project to build democracy in the Middle East foundered on conflicting objectives, competing interests, over-simplistic presumptions, over-ambitious targets, over-optimistic readings of US power and capacity and, as always, underfunding.


[1] See, for instance, the cautionary notes sounded repeatedly in Abraham F. Lowenthal, ed., Exporting Democracy: The United States and Latin America (Baltimore: Johns Hopkins University Press, 1991). It is also well worth reviewing Noam Chomsky’s “Intellectuals and Social Responsibility” and “Back Room Boys,” both in American Power and the New Mandarins (New York: Pantheon, 1969).
[2] Committee for Foreign Affairs, House of Representatives, The Future of US Foreign Policy (Part I): Regional Issues, First Session, February 2-3, 17, 23-24 and March 18, 1993 (Washington, DC: Government Printing Office, 1993), p. 10.
[3] Robert A. Packenham, Liberal America and the Third World: Political Development Ideas in Foreign Aid and Social Science (Princeton, NJ: Princeton University Press, 1976), pp. 98-109.
[4] See, for instance, Stephen Van Evera, &lduqo;The United States and the Third World: When to Intervene?” in Oye, Lieber and Rothchild, eds., Eagle in a New World (New York: Harper Collins, 1992), pp. 117-122; Ernest B. Haas, “Beware the Slippery Slope: Notes Toward the Definition of Justifiable Intervention,” in Laura Reed and Carl Kaysen, eds., Emerging Norms of Justified Intervention (Cambridge, MA: American Academy of Arts and Sciences, 1993), pp. 74-76 and 78-80; and Robert A. Dahl, “The Democratic Mystique,” New Republic, April 2, 1984. Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (Cambridge: Cambridge University Press, 1991), challenges the versions of the class-structural constraints to democracy arguments developed by the left in the 1960s and 1970s. Yet his argument, that conflicts over the political role of religion are least conducive to resolution through democratic institutions (pp. 51-52), does not give much sustenance to Middle Eastern democrats.
[5] Thomas Carothers, In the Name of Democracy: US Policy Toward Latin America in the Reagan Years (Berkeley, CA: University of California Press, 1991), p. 218.
[6] Note the exchange on this point between Tim Mitchell, &lduqo;America’s Egypt,” and Alan Richards, “A Flawed Critique” in Middle East Report 169 (March-April 1991) and 174 (January-February 1992).
[7] Mubarak’s Egypt: Fragmentation of the Political Order (Boulder, CO: Westview Press, 1989). Springborg, a frequent contributor to Middle East Report, currently staffs USAID’s Democratic Institutions Project for the Middle East.
[8] This is different from the classical economic sense of return to a factor of production in scarce supply, and from the common mistranslation of the term as synonymous with corruption or venality. On rent, see Warren J . Samuels and Nicholas Mercuro, “A Critique of Rent-Seeking Theory,” in David C. Colander, ed. Neoclassical Political Economy: The Analysis of Rent-Seeking and DUP Activities (Cambridge, MA: Ballinger, 1984), p. 55.
[9] See Harriet Friedmann, “The Political Economy of Food: A Global Crisis,” New Left Review 197 (1993), pp. 32-37.
[10] United State General Accounting Office, Office of the Comptroller General, Foreign Economic Assistance Issues, No.: GAO/OCG-93-25TR (December 1992) (no pagination in the electronic copy).
[11] “The most obvious contribution that a group may seek of the government is a direct subsidy of money…. The education industry has long shown a masterful skill in obtaining public funds.” Arthur Stigler, “The Theory of Economic Regulation,” reprinted in Kurt R. Leube and Thomas Gale Moore, eds., The Essence of Stigler (Stanford, CA: Hoover Institution Press, 1986), p. 245.
[12] GAO (1992). “AID’s traditional role as the lead agency for administering US economic assistance is being eroded, and other agencies — such as the Departments of State, the Treasury and Commerce, and the Environmental Protection Agency — have begun to take the lead in implementing specific new programs. This phenomenon stems partly from the lack of strong leadership at AID and partly from the perception that AID cannot manage its programs well.” The agency is largely “isolated” from the key “political events of the 1990s.”
[13] The fundamental causes for this incoherent mix of directives that were identified and discussed at length in the 1960s remain the same today. “Development,” as repeatedly reoperationalized, is a chimera. No wonder that after 30 years “AID has not emphasized project implementation and program results…has not collected the baseline data needed and does not have adequate evaluation systems for measuring the impact of its individual projects, country programs or overall operations.” GAO (1992).
[14] United States Agency for International Development, Governance and Democracy Program, Near East Bureau, Democratic Institutions Support Project; quotation from “Summary and Recommendations,” p. i (Washington, DC, mimeo, n.d).
[15] See, for example, Ilya Harik and Denis J. Sullivan, eds., Privatization and Liberalization in the Middle East (Bloomington, IN: Indiana University Press, 1992), p. 43.
[16] Richard L. Sklar, “The Future of Socialism in Africa,” Dissent (Summer 1992), p. 404; USAID, “Democratic Institutions Support Project,” p. 4; and Alan Richards and Raymond Baker, Political Economy Review of Egypt, July 30, 1992. [Prepared for USAID’s Governance and Democracy Program.] [17] “Democracy and Governance Policy Paper,” as quoted in USAID, “Democratic Institutions Support Project,” p. 3.
[18] Augustus Richard Norton, “The Future of Civil Society in the Middle East,” Middle East Journal 47/2 (Spring 1993), p. 213.
[19] See Roger Burbach, “Clinton’s Latin America Policy: A Look at Things To Come,” NACLA Report on the Americas 26/5 (May 1993), p. 21; and James C. Clad and Roger D. Stone, “New Mission for Foreign Aid,” Foreign Affairs 72/1 (1993).
[20] New York Times, October 11, 1993.

How to cite this article:

Robert Vitalis "The Democratization Industry and the Limits of the New Intervention," Middle East Report 187-188 (March/April 1994).

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