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Friday, January 14

System Failure: The Democracy Stage Show, Part II

The following exchange took place in 2000 during a Q&A session at a BBC-sponsored forum on the World Bank.

"My question is regarding my country. In the cold war era the World Bank gave money to Mobuto and his government knowing very well that money was being used for his personal use and I think that money was to keep there and prevent communism being spread around Africa. Why should the people of the Congo pay for this debt because we never used the money and Mobuto was an illegal government?"
--Serge Tshamala, Maryland, USA (from RD Congo)

"I think the whole issue of Mobuto and the Congo troubles you and everyone who has something to do with Africa. The question of where the money went and what the objections were at the time is something I can't really answer seeing as I wasn't around. I can tell you that in recent years there has been an enormous effort on the part of the Bank to make sure money is used on social and other programmes and the incidents of debt try to be alleviated. Your country is one which is suffering from the most terrible political problems and we are working closely with the UN to try to get the country back on an even keel."
--James Wolfensohn, President, World Bank

As if to mock Wolfensohn's final comment the present situation in several African countries underscores that the World Bank working with the United Nations to get things "back on an even keel" is not a winning formula.

Yet to be fair the Bank has always been a prisoner of a certain kind of macroeconomic thinking that has little to do with the real world. The point is pounded home in a writing by the IMF's chief researcher, Raghuram G. Rajan.

The essay, written in plain English, should be required reading for Americans who want this to be "liberty's century." Or at the least, want their tax dollars to go to more effective efforts at helping LLDCs ("least developed countries"--the polite way of referring to countries that are such a mess they can't be even be considered "developing").

Democracy embodies an ideal but in practice it's a form of government. How the government is administered--the nuts-and-bolts daily grind of how the government works out in practice--is critical to a functioning democracy. Development banks such as the World Bank group have always recognized that, but much of their "institution-building" in the poorest countries has ignored the basics. The judicial buildings are erected, always with fanfare. The bureaus required to keep a government functioning are set in place. Behind the trappings, nothing works.

So things function in the country, to the extent they function, via bureaucratic fiat and graft. Our government has not been completely blind to this problem. Here's an excerpt from a somewhat self-congratulatory speech given in 2004 by Robert B. Charles, Assistant Secretary for International Narcotics and Law Enforcement Affairs, in testimony before the House Committee on Government Reform:

"Democratic Institution Building and The Rule of Law

"To improve the rule of law, USG projects also have assisted the Government of Colombia in establishing 37 Justice Houses (casas de justicia), which increase access to justice for poor Colombians. Make no mistake: this is not a small victory or goal -- it is at the very heart, in our view, of sustainable progress and U.S. support. So far, these casas de justicia have handled over 2.2 million cases, easing the burden on the over-taxed, inefficient judicial system.

"Remarkably, the Department of Justice and USAID “Administration of Justice” initiatives have also established 30 new Oral Trial courtrooms and trained over 10,000 lawyers, judges and public defenders in new oral legal procedures designed to reduce impunity and quicken the judicial process. The new accusatorial criminal justice system will be open to public scrutiny and is expected to be more efficient and effective, and thus more worthy of public confidence."

All that is good news. The bad news is that the obstacles to democracy in LLDCs are more basic than the problems mentioned by Charles--so basic it's hard for people in developed countries to wrap their mind around the situation.

For example, Americans take for granted the concept of "property ownership." We also take for granted that there are laws to define and protect the legality of contracts. A democracy without these two concepts in operation is unthinkable. Yet in many countries neither concept is operational. So no matter how many judicial courts and bureaus the development loans install, it's a stage show if the country has "democratic" in its name.

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