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Introduction
Many of the arguments John Macmillan has made about intervention in the introduction to this Special Issue could equally be made about the institutions, policies, and practices of international development. As an institutionalised activity it has a much shorter history of course – dating from the period after World War Two – but in many other respects, the project of international development looks like intervention's younger brother (or perhaps ‘good cop’ to intervention's ‘bad cop’). The project of international development is perhaps the great modern international project, not simply in temporal terms, but in terms of the ideological commitments that underpin it, particularly the stress on progress, rationalisation, and material well-being. The project of international development also has its origins in, and continues to be shaped by, the three overlapping hierarchies within which Macmillan argues our understanding of intervention should be situated. First, the institutions and practices of international development have always been a tool of great power management and global ordering, particularly on the part of the United States, but subsequently many other states as well. Second, the project of international development has often been about expanding the reach of global capitalism and managing the uncertainties and instabilities that emerge from the changing global economy, particularly in responding to economic crises in developing states. Third, the project of international development reflects and reinforces civilisational and cultural hierarchies.Footnote 1 The very terms ‘developed’ and ‘less-developed’ indicate this, and from the late-1980s onwards, the project of international development has come to express more and more forcefully a cultural hierarchy, particularly through the incorporation of liberal concepts and categories such as human rights.Footnote 2 In all these ways the project of international development sits at the intersection between transnational forces and the political, social, and economic forces contained within sovereign states. Indeed, one of the key problems facing development agencies has been precisely how to exercise some influence over domestic social and political forces inside developing countries. Finally, development has become inextricably linked to ‘traditional’ interventions (Bosnia and Herzegovina, Afghanistan, and Iraq to name just three) as development agencies have been tasked with ‘peacebuilding’ and ‘statebuilding’ in post-intervention states as part of a broader project of ‘liberal peace’.Footnote 3
Yet there is a complex relationship between international development and intervention as traditionally understood within the discipline of International Relations (IR). Since the 1980s, in particular, development agencies have attempted to exercise significant influence over the realm traditionally understood as comprising ‘domestic affairs’.Footnote 4 As the policy agenda of international development has expanded, development agencies have concerned themselves with almost all areas of domestic economic policy, most political processes and institutions, many social and cultural practices, often in a remarkably details way (specifying such things as such things as the content of educational curriculums, civil service pay scales, and land tenure laws).Footnote 5 There is, in other words, extensive ‘intervention’ in the internal affairs of most developing countries, especially the world's poorest. Despite this, the activities of development agencies do not fit easily into the traditional understanding of intervention. First, in almost all cases development agencies operate with the formal consent of the governments of the states in which they operate. Second, development agencies do not employ the kinds of military coercion often associated with traditional interventions (although they do employ many other techniques for generating compliance). Finally, in most cases the activities of development agencies are not discrete acts, but part of a substantial and ongoing relationship with developing country governments. At times, indeed, the activities of development agencies have operated to reinforce practices associated with the norm of sovereignty. Many of them only loan to governments, or with explicit government guarantees, and certainly until the 1980s, their activities were understood within a framework that accepted the governments of developing countries should lead the process of national development. In addition, at least some of what they do is concerned with strengthening the capacity of governments to govern economic and social processes within their states and more effectively control flows across their territorial borders.
The activities of development agencies are not then ‘intervention’ in any simple sense. It has nonetheless sometimes been argued that the activities of development agencies can be captured within the framework of traditional understandings of intervention by focusing on the question of consent. This question was especially acute in the era of conditional lending (structural adjustment), when development agencies attempted to use their financial leverage over countries experiencing economic crises to pursue neoliberal inspired policy reforms. But even beyond this, the continued dependence of especially poorer countries on aid for the effective functioning of government and the provision of essential services, the gate-keeper role of the International Financial Institutions (IFIs) for private financial flows, and the difficult fiscal and balance of payments situation of many developing countries, has led some to argue that the IFIs can ‘impose’ policies on governments, and thus that any consent formally given should not be understood as the exercise of some meaningful choice on the part of many recipient governments. If this is right then it might be possible to understand development agencies as ‘intervening’ in the traditional sense, albeit using non-military forms of coercion.
This way of approaching the issue is rather unsatisfactory, however. In the first place, drawing a line between ‘consent’ and ‘coercion’ is difficult in an international system characterised by enormous inequalities, and seeing the exercise of power within unequal power relations as ‘coercion’ risks collapsing any clear definition of intervention. Second, as a matter of fact development agencies have often had tremendous difficulties imposing policies and practices on aid recipient governments.Footnote 6 They certainly have significant influence, but the social and political forces contained within the borders of developing countries have the capacity to subvert, undermine, and warp the demands of external agencies. Third, seeing the relationship between aid donors and recipients in terms of ‘coercion’ underplays the significance of the stress laid on the formal consent of the governments of recipient countries. International development emerged as a mechanism for international ordering in an era when the legitimacy of colonial rule was declining. It provided a mechanism for trying to shape, manage, and control social, economic, and political processes in an era of formal sovereignty. The utility of international development for global management and ordering is precisely that it provided a path between colonialism and formal intervention (this was particularly important for the United States). Sovereignty here is not simply a sham (however much it might have been redefined); it is central to how international development ‘works’. Fourth, it does not help us get to understand the changing patterns of relationship between development agencies and aid recipient states. These relationships have changed considerably over time, and to see them simply in terms of ‘non-consent’ and ‘imposition’ is to miss quite how significantly they have changed, why they have changed, and what the implications of these changes are. Finally, the focus on consent and thus intervention operates with a conceptual apparatus of ‘internal’ and ‘external’, of ‘sovereignty’ and ‘choice’ that no longer accurately captures what has been happening in many developing countries.
Rather than focusing on the issue of consent, this article argues that we should begin by recognising that the institutions and practices of international development do not fit simply into the intervention’ vs. ‘not intervention’ framework. Instead we should see the project of international development as a flexible and adaptable tool for global ordering, and once we do this the significance of international development for thinking about intervention is revealed. First, the coexistence of lots of intrusion and influence without direct ‘intervention’ helps us to see the way in which the sovereignty and statehood of many developing countries has been reordered. The territorial integrity and formal sovereignty of developing countries is maintained at the same time as development agencies seek to exercise significant influence over internal political, economic, and social processes.Footnote 7 And they do this in a normalised, routinised, and quotidian way. Second, as development agencies have become enmeshed in processes of policymaking in developing countries, they have been engaged in a process of the ‘transnationalisation’ of developing states.Footnote 8 They have been attempting to draw developing countries into regimes of global governance, which while they might have only uncertain developmental benefits, reflect the desire on the part of Western states to attempt to govern transnational flows and processes. In both of these ways some of the traditional distinctions between ‘internal’ and ‘external’ upon which the standard definition of ‘intervention’ are predicated start to erode: external agencies are bound up with internal processes, and internal institutions are constructed that have a transnational dimension. And in both of these ways we should see the project of international development as a central tool in contemporary practices of global restructuring, part of the utility of which lies precisely in the fact that much of what it does is not ‘intervention’ of the more traditional kind. To put the matter more bluntly, international development has been a mechanism for global ordering which has meant that dominant powers have not had to ‘intervene’ (in a traditional sense) to pursue their objectives. Development agencies have become tools for ensuring debt repayments, opening markets and reforming governments, which in the past were pursued by conventional interventions. It is no coincidence that most cases of military intervention certainly in the post-Cold War era have been in those countries where development agencies have not had a substantial presence.
While international development is a relatively recent innovation in international politics, there are suggestive parallels with British imperialism in the nineteenth century. Here, as John Darwin has argued (following the pioneering work of John Gallagher and Ronald Robinson) the British ‘system’ was composed of much more than formal territorial empire.Footnote 9 It ‘embraced an extraordinary range of constitutional, diplomatic, political commercial and cultural relationships’, including formal colonial rule, settlement colonies, protectorates, mandates, naval and military fortresses, treaty-ports, ‘informal’ colonies of commercial pre-eminence, and ‘spheres of interference’.Footnote 10 In other words, as Gallagher and Robinson argued, to focus only on formal empire in the study of British imperialism is ‘rather like judging the size and character of icebergs solely from the parts above the waterline’.Footnote 11 The important issue for them became about when and under what circumstances formal annexation was used as opposed to other mechanisms of control: ‘by informal means if possible, or by formal annexation when necessary, British paramountcy was steadily upheld’.Footnote 12 We might say in a similar way that to focus solely on formal ‘intervention’ and thus the issues of sovereignty and consent is to miss the wide variety of other practices of global ordering, of which international development has become an increasingly important part. We might also say again following Gallagher and Robinson, that in the contemporary period control, management and ordering take place though the structures of sovereignty possible, but through formal intervention when necessary.
There is another important parallel with British imperialism do with the relationship between the exercise of control and management by the metropole and local dynamics in formal and informal colonies. This is implied in Gallagher and Robinson's idea of informal means if possible but formal annexations where necessary. What it was that made formal annexation ‘necessary’ has been the subject of much dispute, but the general point is that there were local dynamics which British policymakers could not simply ‘control’, but to which they had to adapt.Footnote 13 Similarly, in projects of domestic restructuring and transnationalisation of the state development agencies do not simply get it all their own way. Developing states contain at least partially bounded political, economic, and social forces over which external agencies have some, but only partial control, even when they have an extensive and ongoing presence within developing states. This suggests that significance of ‘state-ness’ is not exhausted by the fact that sovereignty remains for many developing countries only formal.Footnote 14 Crossing the sovereign boundary and becoming enmeshed in domestic processes does not by itself resolve the problem of managing the social and political forces within states, although it provides new mechanisms for doing so.
The rest of this article takes a roughly chronological approach. It begins by examining the emergence of the project of international development in the period after World War Two. It emerged as a mechanism for global ordering and great power management, but was very significantly shaped by the norms of sovereignty and non-intervention. The following section examines the period from the late 1970s into the 2000s when the policy agenda of international development expanded, and relations between development agencies and developing countries shifted significantly, from the extensive use of conditional lending to the more intricate and everyday forms of reordering that emerged after the end of the Cold War. The final section explores the ways in which development agencies have become wrapped up with other forms of global restructuring – the construction of regimes of global governance. While much of the argument is presented in broad terms, illustrative examples are taken from the experience of Ghana, if only to show that in unpacking the forms of relationship between development agencies and developing countries it is important sometimes to pay attention to the details of particular programmes and policies.
Development, hegemony, and order
As an institutionalised activity within international politics the project of international development emerged within and largely because of American hegemony in the period after World War Two. It was a mechanism for pursuing international political and economic goals and for managing relations with developing countries. Until the later 1970s it operated within an international order shaped by the Cold War and the growing significance of the norm of self-determination. In this way the project of international development initially operated within a framework of ‘internal’ and ‘external’, and while the Cold War itself occasioned many interventions, development agencies were not especially intrusive during this period.
There was a general agreement among American planners during the War that the ‘development’ of less-developed countries was important for the security and prosperity of the United States. It was partly this enthusiasm for development that led the developing countries present at the Bretton Woods Conference to be so supportive of its proposals.Footnote 15 American planners were convinced that the kind of international political and economic order they were creating would be good not just for the United States but for other states as well, and in making these arguments they drew on the long tradition of liberal international thought that equated economic freedom with peace and prosperity.Footnote 16 The stress on the need for open trade (in both America's interests, and the interests of other states) was also linked to the desirability of spreading American ideology. As Layne has put it, ‘US strategists believed that the nation's core values could be safe only in an international system underwritten by hegemonic US power and open both to US economic penetration and to the penetration of American ideology.’Footnote 17 In this way, American policymakers joined a self-interested argument with the spread of liberal economic and political ideas and institutions. As well as a way of pursuing these broader objectives, ‘international development’ was also a mechanism for fighting the Cold War. First, as the Truman Doctrine indicated, foreign aid would be used explicitly to combat communist influence. Second, many US policymakers also thought that the lack of development in Third World states would provide a breeding ground for communism.Footnote 18 As Wolfgang Sachs has put it, the promise of ‘development’ would ‘engage the loyalty of the decolonizing countries in order to sustain the struggle against communism’.Footnote 19 ‘Development’ then sat as the US alternative to both communism and colonialism. This duel origin of the project of international development – advancing the broad goals of American hegemony and fighting the Cold War – demonstrates how significant international development was to the broad project of global ordering. It was (or at least was thought to be) a mechanism for buying political allies, establishing military bases, opening markets, and promoting democracy. And this was also the case for most other Western states, and later on Japan too (albeit in slightly different ways).Footnote 20
The period of the Cold War was of course one in which developing countries experienced all kinds of often very destructive interventions.Footnote 21 The project of international development, however, was not itself very ‘interventionist’ during this period, for reasons to do both with the Cold War and with the norms associated with sovereignty. Both the USSR and the US were often content to leave the governments of developing states alone in return for whatever it was that the superpower wanted. This may have been morally dubious, but it had the effect of protecting (some) Third World states from extensive concern with their internal affairs. In addition, superpower rivalry gave some developing countries a certain kind of protection because it legitimated (or at least helped to sustain) a limited form of political pluralism within global politics. It was simply much easier to be a communist state when the USSR was around to support you (as Ethiopia post-1974).
The Cold War also reinforced a normative shift that was already underway from seeing colonial rule as a legitimate form of political authority to seeing it as illegitimate. The processes here are complex. They involved what James Mayall has called ‘the nationalization of the concept of self-determination’, which, he argues, ‘placed a time-bomb under the concept of empire as a legitimate political form’.Footnote 22 In the aftermath of the First World War, the idea of national self-determination became more widely accepted as a way of thinking about the specific claims to independent statehood made by peoples in Central and Eastern Europe.Footnote 23 In other words, it became legitimate to argue that statehood should be granted to a ‘people’ because they formed a nation. Nationalist movements in colonised states were quick to embrace this kind of language, however fictitious the claim that the people inside colonial borders constituted a ‘people’ or a ‘nation’. They also involved the ending of ‘civilisation’ as a formal standard for assessing claims to independence. The ‘standard of civilisation’ had provided some (rather vague) yardstick by which to assess claims for independence but after World War Two it was rapidly abandoned.Footnote 24 Taken together these two meant that colonial holdings were seen as illegitimate and this helped pave the way for the rapid decolonisation that took place after World War Two. In David Chandler's words, the result was ‘nominal great-power acceptance – however hypocritically – of a law-bound international system’ and ‘the principle of non-intervention was … a constituting principle of the new international community of states’.Footnote 25 This was enshrined in the Charter of the United Nations that stressed the principles of sovereign equality and non-intervention.
The emergence of many new states with the ending of formal empire, as well as the norms associated with sovereignty both enhanced the significance of international development. Development was ideally suited to this new international environment. It provided a mechanism for global ordering that was different from colonial rule and military intervention, yet more substantial than traditional diplomacy, and one that operated though the institution of the sovereign state. Development theory and practice was also fundamentally shaped by these shifts.Footnote 26 This was evident in both the role given to the state and the role of external assistance. Development economics reflected the idea that states were sovereign entities and that the government was the key political authority charged with promoting the process of development. External agencies were to assist in this process but not to interfere too much in the internal affairs of sovereign states. It was the governments of developing countries who were to lead the process of economic development as a national project. And this was enshrined in the articles of agreement of the World Bank, for example.
It is important to recognise, however, that the provision of development assistance did not translate straightforwardly into extensive influence over domestic political and economic processes in many countries.Footnote 27 Cold War competition gave resources and protection to many developing countries. They often benefitted from military and economic support from one or other of the superpowers and although this gave the superpowers some leverage, not only was this rather limited in practice, but in fact the relationship enabled Third World states to exercise leverage over the superpowers, particularly by recasting local disputes as parts of the great ideological struggle or by playing one superpower off against the other.Footnote 28 Ghana, for example, received aid at various times from the US, Britain, the USSR, and China among others. The US and Britain along with the World Bank helped to fund the building of the Askombo dam (creating Lake Volta) in large part because they were anxious that Ghana would simply turn to the USSR if they did not.Footnote 29 In addition, development agencies and the IMF struggled to exert any significant influence over domestic politics and economic policymaking in Ghana, even when Ghana's economy started to experience severe difficulties in the late 1960s and 1970s.Footnote 30 Domestic political dynamics remained the most significant determinant of what happened in Ghana (and many other developing countries) during this period.
The project of international development then was established as a mechanism for international ordering that was inspired and shaped by the Cold War and norms of sovereignty and non-intervention.Footnote 31 It was a new form of order-making that was an alternative to formal empire and military intervention, and which was well-suited to a world increasingly populated by sovereign states. On the other hand it operated within a conceptual framework of ‘internal’ and ‘external’, it did not concern itself with large areas of ‘domestic affairs’, and while it certainly was used as an instrument for exercising influence over developing states, the influence development agencies actually had was shaped by domestic social and political dynamics within aid recipient states.
Development, sovereignty, and governance
From the late 1970s onwards, relations between development agencies and developing countries underwent a series of significant changes as the project of international development was adapted to deal with new ‘problems’ that seemed (to developed states) to require management and control. Development agencies became more intrusive in the sense that they concerned themselves with a wider and wider range of issues traditionally seen as part of a realm of ‘domestic affairs’. They also developed new practices that attempted to exercise more influence over domestic political and economic processes, but in ways that respected the territorial integrity and formal sovereignty of developing countries. By the 1990s and into the 2000s, this had created a new form of statehood for many developing countries, one where external agencies became enmeshed in almost all areas of domestic political, economic, and social life in a regularised and routinised way.Footnote 32 This is not ‘intervention’ traditionally understood, but equally it is clear that simply to say development agencies are not intervening because they operate with the formal consent of governments is to miss what it significant about these new relationships. They blur the distinctions between ‘internal’ and ‘external’ upon which traditional notions of intervention are predicated, and they provide new and intimate ways of trying to order and reconstruct developing states. But while much of this is new, the difficulties facing external agencies in shaping domestic political, economic, and social processes have not been entirely overcome. Attempts at influence are no longer simply outside – in (the ‘outside’ has become part of the ‘inside’), but even with this more permanent presence development agencies have sometimes struggled to achieve their objectives.
In terms of development policy the rough chronology here is first a concern with economic policy and the macroeconomic environment, second a concern with the ‘institutions’ necessary for a market economy (reform of legal systems and banking regulation for example), and third a concern with ‘good governance’, including for many Western development agencies democracy promotion, support for ‘civil society’, and human rights.Footnote 33 During this process development agencies became concerned with a wider and wider set of issues that covered almost all aspects of economic, political, and social life in developing countries. In addition, and particularly during the second half of the 1990s and into the 2000s, development agencies began to stress more and more the integration of developing countries into the ‘globalising’ economy.Footnote 34 This was to be accomplished by the construction of legal and regulatory codes that mirrored accepted international best practice as well as various policy reforms such as capital account liberalisation and the development of stock markets.Footnote 35 This vastly expanded project, driven in part by a series of liberal concepts and arguments that are characteristic of the post-Cold War order, is quite different from the project of international development in the 1950 and 1960s.
Accompanying these shifts in development policy, and of more significance here, has been a series of changes in how development agencies have attempted to exercise influence over developing countries. The first shift here was to ‘conditional’ lending as employed in structural adjustment programmes as a tool of economic ordering and of ensuring the repayment of (at least some) external debt.Footnote 36 In response to economic crisis in many developing countries, the ‘triumph’ of neoliberalism, and the ‘threat’ that the largest debtor nations of Latin America posed to Western banks, development agencies attempted to ‘buy’ neoliberal economic reforms. In Ghana, for example, the World Bank approved a $115 million Structural Adjustment Credit in 1987. The programme aimed to ‘establish an incentive framework that stimulates growth, encourages savings and investment, strengthen the balance of payments, and improve resource use, particularly in the public sector’.Footnote 37 This was to be accomplished by a series of policy reforms. Included were such things as: liberalisation of trade and exchange rate system (by abolishing the import licensing system, establishing foreign exchange bureaus, and introducing foreign exchange auctions, among many others); reform of the cocoa sector (by liberalising cocoa prices, removal of input subsidies, and reform of the cocoa marketing board); stabilising government finances (by tax reform and reform of the government budgeting procedures); reform of the civil service (by reducing wage rises and establishing a programme of job losses in the public sector); privatisation of state owned enterprises; and encouraging private investment (by introducing a new investment code and encouraging consultation between the government and the private sector). Some of the reforms are very detailed indeed – down to specifying specific sales tax rates, wage rises, and pricing policies. This was also a conditional loan: it was to be disbursed in two tranches with the second one being ‘made available provided a review of performance … determines that the conditions stipulated … have been fulfilled’.Footnote 38
This is certainly intrusive, and many critics of these kinds of programmes have argued that development agencies were simply ‘imposing’ these policies on developing countries. The reality is more complex. For some countries, including Ghana there was already a domestic coalition in favour of these kinds of reforms.Footnote 39 Here, then the issue is not that the government had to ‘consent’ to these programmes, but that they were understood by some at least as necessary to overcome the very significant crisis many states had founds themselves in. Second, the actual record of implementation of these kinds of programmes, including the one in Ghana is very mixed.Footnote 40 Particularly in politically difficult areas like privatisation and reform of the civil service, progress was very slow.Footnote 41
Through the 1990s and into the 2000s, a new form of relationship between development agencies and developing countries emerged, as the project of international development was again adapted.Footnote 42 Partly this was in response to the difficulties of generating compliance with conditional loans. But there were other factors driving this change. First, despite the complex reality of conditional lending, conditionality had become seen as increasingly illegitimate.Footnote 43 Second, the end of the political pluralism that characterised the Cold War enabled Western donors to become increasingly enmeshed in all areas of economic, and increasingly with good governance, political and social life, as developing states had nowhere else to turn for financial and economic assistance. It also took the heat out of older ideological divides, and the triumph of liberalism led in some states to an increasing ideological convergence between donors and at least section of recipient governments (particularly finance ministries). In this context a new aid relationship was possible because donors no longer had to pressure states to adopt policy reforms in the way they felt they had to in the 1980s. Third, the increased involvement of Non-Governmental Organisations in the project of international development, often in partnership with large development agencies, enabled the pursuit of more detailed and micro-level projects of reform, targeting individual and community behaviour.Footnote 44 A new way of thinking about the relationship between development agencies and developing states emerged, utilising the language of ‘participation’, ‘ownership’, and ‘partnership’ in place of conditionality. Indeed, by 2005, the Department for International Development (DFID) argued that ‘it was necessary to move away from traditional approaches to conditionality’, and that it was ‘ineffective and inappropriate to impose policies on developing countries’.Footnote 45 Even the World Bank was arguing that ‘good practice’ meant focusing on ‘country ownership’ rather than conditionality.Footnote 46
New techniques for managing and ordering developing states were developed, most notably the Poverty Reduction Strategy Paper (PRSP) process initiated by the World Bank and the IMF in 1999.Footnote 47 The idea behind this was that governments would develop a poverty reduction strategy in consultation with civil society groups. Governments needed to show that they had consulted widely not just in terms of assessing the incidence of poverty, but also in terms of what the most appropriate policies and programmes might be for alleviating poverty. At the country level this concern with participation and ownership was also a way of disciplining developing country governments.Footnote 48 They would be held to account for their performance in implementing development strategies they themselves had ‘ownership’ of (they could no longer say that it was all imposed from outside). While this process reduced the kinds of conditionality associated with adjustment lending in fact it shifted the locus of conditionality from specific policies to the process of designing the poverty reduction strategy – it is a mechanism that works through the institution of formal sovereignty.
The Ghana Poverty Reduction Strategy 2003–2005, developed through a PRSP process aimed to ‘create wealth by transforming the nature of the economy to achieve growth, accelerated poverty reduction and the protection of the vulnerable and excluded within a decentralized, democratic environment’.Footnote 49 The Strategy set out actions in six broad areas: sound macroeconomic management; ‘increasing production and promoting sustainable livelihoods’; direct support for human development and the provision of basic services; provision of special programmes for the vulnerable and excluded; ensuring good governance and improved capacity in the public sector; and, ‘the active involvement of the private sector as the main engine of growth and partner in nation building’.Footnote 50 The Strategy included 35 specific targets for reform of governance, including such issues as developing an anti-corruption strategy, establishing permanent mechanisms for government-civil society dialogue, strengthening the legal system, and reforming land law.Footnote 51 There are also 23 additional targets in the area of decentralisation, 18 additional targets in the area of public expenditure management, and 20 additional targets in the area of transparency and accountability. One of the most striking aspects of the Strategy document is how detailed it is. In addition to the 96 specific targets in the area of governance, the report contains another 54 specific targets across a large range of issues, from education and health service provision to environmental protection. Importantly too the PRSP process is supposed to be that basis for coordinated support from Ghana's numerous donors (there are over 40 bilateral and multilateral agencies at work in Ghana).
These kinds of programmes are not at all unique to Ghana, but they do illustrate how intricate and intrusive the project of international development has become. They are certainly not intervention in the traditional sense, however. Rather, they represent a reordering of sovereignty and a blurring of the internal and the external to create a new form of statehood. Graham Harrison has captured this by the term ‘governance states’.Footnote 52 These are states in which: external agencies are attempting to pursue a significant programme of political, economic, and social transformation;Footnote 53 where external agencies are enmeshed in policymaking processes in all areas of domestic life; where this involvement is long-standing and routinised; and in which through this enmeshment they no longer have to exercise the kinds of conditionality associated with structural adjustment lending. Mark Duffield has argued more generally that for many ‘weak’ states, while their territorial integrity remains, ‘sovereignty’ over large areas of life is now internationalised and negotiable.Footnote 54 Even in this new form of relationship, however, external agencies do not simply ‘control’ what happens. Rather, as Duffield and Harrison both suggest, external agencies become part of the internal processes of policy formulation and implementation; one set of ‘players’ in a series of complex internal process. For example, despite the all-pervasive presence of external agencies in Ghana they were not able to prevent successive governments from engaging in pre-election spending sprees with serious consequences for macroeconomic stability.Footnote 55 In addition, progress on privatisation has been slow and both the World Bank and the IMF have complained of the inadequacy of civil service reform programmes.Footnote 56 External agencies certainly have much more influence than they did in the past, but even in ‘post-conditional’ states, they have to contend with domestic political and social processes.
Development and transnationalisation
As development agencies have become enmeshed in almost all areas of domestic life in many developing countries, they have been increasingly able to pursue what Shahar Hameirii has called ‘projects of state transnationalization’ as again the project of international development has been adapted to deal with new ‘problems’.Footnote 57 These projects have as their aim the regulation of domestic processes via the adoption of internationally mandated mechanisms of governance, and the instantiation of these international mechanisms within developing states. They seek to create a ‘transnationally regulated state’.Footnote 58 External agencies certainly have very significant influence over these projects, but again they respect the territorial integrity and formal sovereignty of developing countries, and as such are not ‘intervention’ traditionally conceived. They further blur the distinction between the ‘internal’ and the ‘external’: they use external agencies, enmeshed in internal processes, to create externally mandated mechanisms of governance within developing countries. In this way, development agencies have become central to broader projects of global ordering.
We can see several distinct but overlapping projects of transnationalisation here. First, as noted above, there was a concern with integration into the global economy.Footnote 59 Through the second half of the 1990s and into the 2000s, there was a subtle reworking of some of the arguments about good governance under the influence of the discourse surrounding ‘globalisation’. Dani Rodrik has argued that there ‘emerged a tendency to view development – and the institutional reform needed to spark and sustain it – almost exclusively from the perspective of integration into the world economy’.Footnote 60 He quotes Stanley Fisher, then head of the IMF, who said that ‘integration to the world economy is the best way for countries to grow’.Footnote 61 That is, the governance frameworks of developing countries were to be assessed on the basis of whether they helped or hindered the process of integrating into the globalising economy. This kind of argument relied on the idea that foreign investors were more likely to be attracted to states which had better governance and that attracting foreign capital would be an ‘engine’ of growth, to use an older phrase.Footnote 62 While this kind of argument was rather short-lived – collapsing in the 2008 financial crisis – it did have an impact on the ways in which development agencies pursued and justified their development programmes. It manifested itself most obviously in a concern with standards of regulation whereby developing countries would be pushed to adopt international standards for regulating banking, accounting, trade, and insurance for example, regardless of whether these were really developmentally justified.Footnote 63
A second related but different set of projects have been driven by a concern to deal with potential spillovers from financial crises in development countries.Footnote 64 It is possible to see here how in responding to these crises the World Bank and IMF are pursuing the broader global governance agenda of Western states.Footnote 65 Financial sector reform became about the creation of a ‘framework of governance linkages that cut across national borders’.Footnote 66 In the aftermath of the Asian financial crisis, for example, the World Bank in tandem with the IMF, began to embrace a far-reaching financial sector institutional reform agenda with the explicit aim of developing surveillance and governance regimes that would (in theory) ensure the stability of domestic financial systems, and thus of the international financial system more generally.Footnote 67 As a World Bank document put it, ‘the Asian crisis … gave urgency to supporting financial sector reforms as well as for obtaining more timely information on financial stability’.Footnote 68 In 1999, the World Bank and the IMF established the Financial Sector Assessment Program (FSAP), the aim of which was to ‘monitor financial system soundness … to assess the effectiveness of various aspects of monetary and financial policies and to promote the harmonization and international convergence of key financial policy areas’.Footnote 69 The assessments themselves examined the extent and quality of domestic surveillance practices and domestic regulatory and supervisory institutions, and the extent and quality of the financial system infrastructure (legal system, accounting and auditing framework, disclosure regime, reporting requirements, and so on). They were also explicitly concerned with assessing the extent to which domestic financial governance regimes comply with international standards and ‘best practices’.Footnote 70
A third set of ‘projects of transnationalisation’ have been driven by a much wider set of political and security concerns that emerged partly as a result of the attacks of 11 September 2001. New issues have emerged in the World Bank's financial sector reform, for example, the most notable of which was a concern with money laundering and the financing of terrorism. At a November 2001 meeting of the Development Committee, ministers stressed the need for the Bank and Fund to do more to help countries identify and address money laundering and the financing of terrorism. In August 2002, the Boards of the World Bank and IMF agreed to adopt the Financial Action Task Force (FATF) ‘40+8’ Recommendations as the basis for its attempts to construct anti-money laundering regimes in developing countries. These recommendations cover a range of issues including criminalisation of money laundering, customer due diligence and record keeping, reporting requirements, the establishment of regulatory regimes, and international cooperation.Footnote 71 After 11 September, FATF added to these ‘8 special recommendations’ dealing specifically with the financing of terrorist activities.Footnote 72 After 2002, the World Bank developed a common methodology for assessing the strength of anti-money laundering regimes in developing countries through its FSAP process.Footnote 73 The methodology contained over 250 criteria concerning the conduct of customer due diligence with respect to when it is to be conducted, how long it should take, what to do with existing customers, the conditions under which certain exemptions may be granted, and when financial institutions can rely on third party assessments, among other things.Footnote 74 When the World Bank started including assessment of AML/CFT regimes into its FSAPs it found that a ‘fairly high percentage’ of countries were failing in one way or another to provide adequate mechanisms for dealing with these problems. Among the shortcomings identified were: poor assistance provided to other countries investigations into terrorist financing; poor attention given to transactions with ‘higher risk countries’; poor detection and analysis of unusually larger or otherwise suspicious transactions; too little criminalisation of the financing of terrorism; inadequate AML supervision of banks and other financial institutions; inadequate measures to freeze and confiscate terrorist assets; and inadequate ‘internal policies, procedures, controls, audits and training programs’.Footnote 75 Both the World Bank and the IMF have integrated the results of these assessments into the Country Assistance Strategies for their borrower countries. The World Bank has also expanded its technical assistance provision in the areas of money laundering and countering the financing of terrorism. Between 2002 and 2004, for example, the World Bank and IMF delivered technical assistance to 63 individual countries, and undertook 32 regional technical assistance projects.Footnote 76 This was directed at the establishment of AML/CFT laws and regulations that met international best practices, building capacity for financial sector supervisory and regulatory authorities, the establishment of financial intelligence units, and awareness raising and training programmes in the public and private sectors.Footnote 77
Almost all bilateral aid and development agencies have followed the World Bank and IMF into AML/CFT work. Towards the end of 2006, the British Department for International Development agreed to contribute £6 million over three years to the joint City of London and Metropolitan Police Force International Corruption Group. The money will be used to pay for police officers that work in the Proceeds of Corruption Unit that tackles money laundering in the City of London.Footnote 78 More generally, DFID has committed itself to ‘tackling corruption, bribery and money laundering’.Footnote 79 United States Agency for International Development (USAID) has been extensively involved (as one would expect) in tackling money laundering.Footnote 80 The Inter-American Development Bank has funded projects to support the creation and development of a number of financial intelligence units in its member states.Footnote 81 The Asian Development Bank has been similarly concerned with money laundering.Footnote 82 The African Development Bank has been pursuing anti-money laundering activities through the New Economic Partnership for African Development (NEPAD). In particular it has pursued implementation of international standards and codes in the banking and financial sectors in Africa, including the adoption of the FATF recommendations.Footnote 83 So, for example, the extent to which an African country has implemented an anti-money laundering law, and the extent to which it has established a financial intelligence unit to investigate money laundering and other financial crimes are explicit criteria in the assessment of African countries through the NEPAD Peer Review Mechanism.
Despite the development of these new techniques, external agencies have sometimes struggled to generate compliance with these kinds of projects. The case of Ghana is again illustrative here. Despite the mechanisms outlined above it was not until 2008 that Ghana actually passed laws criminalising money laundering and terrorist financing. Subsequently, a whole series of attempts have been made to strengthen and AML/CFT regime in Ghana. In 2009, a review by the Inter-Governmental Action Group against Money Laundering in West Africa concluded that Ghana was ‘non-compliant’ with 20 of the FATF recommendation and only partially compliant with another 22, and suggested that progress was slow partly as a result of the 2008 election.Footnote 84 The Ghanaian government eventually passed more legislation and established new institutions, notably a Financial Intelligence Centre, but in early 2012 Ghana was ‘blacklisted’ by the FATF itself for ‘strategic deficiencies’ in its AML/CFT regime.Footnote 85 This was altogether more serious, especially as being on the FATF blacklist has potentially significant consequences, not least that Western commercial banks use the FATF blacklist as a sign that they themselves must undertake ‘enhanced’ due diligence, thus generating a substantial disincentive to engage in commercial transactions with Ghanaian banks.Footnote 86 This was followed by another round of legislative changes, and technical assistance to improve the capacity of the Financial Intelligence Centre (some of which was provided by the Office for Technical Assistance of the US Treasury).Footnote 87 Ghana was subsequently ‘de-blacklisted’ in October 2012, but there remain doubts about how effective in practice Ghana's AML/CFT regime actually is.Footnote 88
These projects of state transnationalisation are driven by external agencies and they reflect the security, political, and economic concerns of dominant states. As the 2002 White House Security Strategy said, ‘the United States today is threatened less by conquering states then we are by weak and failing ones’.Footnote 89 But they are also a long way from anything conventionally called ‘intervention’. These projects are pursued through the routine and everyday practices of these agencies in their relations with developing countries. They also operate to make increasingly anachronistic the conceptual apparatus that made sense of a traditional notion of ‘intervention’ (a sphere of ‘internal affairs’, a sovereign divide between ‘inside’ and ‘outside’).Footnote 90 But to the extent that the construction of regimes of global governance has some continuity with more traditional forms of intervention – such as a focus on the domestic realm in target states in the pursuit of the management of global problems – then in many ways the project of global development is the heir to the tradition of international intervention. As noted above it is not coincidental that more ‘traditional’ interventions have often taken place in those countries where external agencies have not developed these kinds of relationships.
Conclusion
In 2004, USAID produced a policy paper that summarised the objectives of US aid policy.Footnote 91 It announced that the goal of US aid was not simply raising living standards, but ‘transformational development’: ‘Far-reaching, fundamental changes in institutions of governance, human capacity, and economic structure that enable a country to sustain further economic and social progress without depending on aid.’ The paper also identified four specific goals for US aid: strengthening fragile states, responding to humanitarian crises, supporting US strategic interests, and managing global problems. There is clear continuity here with the place of development within the hegemonic ambitions of the US after World War Two, and it demonstrates the continued significance of the project of international development as a mechanism for global management and global ordering. Over the last 25 years or so, however, relations between development agencies and developing countries have changed significantly. For many developing countries, relations with development agencies cannot really be captured by the term ‘intervention’. External agencies have become much more intricate and everyday in the pursuit of a radically expanded development agenda and the creation of regimes of global governance.
It is also clear, however, that while these are often externally driven projects, external agencies have had to contend with political and social processes in developing countries over which they have only limited control. The new forms of statehood created by these relationships have certainly undermined traditional notions of sovereignty, but that has not stopped governments and other social forces in developing countries from dragging their feet, warping and subverting these projects. One implication of this is that in thinking about role of external agencies and indeed intervention we should not concern ourselves only with questions of sovereignty. As ‘external’ agencies have overcome the sovereign boundaries of developing states, they have become part of the complex processes within developing countries, and while they certainly exercise influence over these they are only one set of ‘players’. As the example of Ghana illustrates, making these projects work often requires considerable effort and innovation, and even then questions remain about how successful these projects have actually been.
It is unlikely that these forms of relationships will unravel soon, precisely because external agencies have become so enmeshed in many areas of domestic political, economic, and social life in many developing countries, and because development agencies have become central agents in projects of global ordering. On the other hand, the pursuit of these projects may become more complicated. The emergence of non-traditional aid donors, particularly China, has provided recipient governments with an alternative source of funds that is relatively free of the intrusive political, social, and economic concerns of Western donors.Footnote 92 It is also clear that Western donors view China's increased role in aid provision with some anxiety precisely because it threatens their overwhelming influence in many states.Footnote 93 Second, the ongoing economic and financial crisis has undermined the legitimacy of some donor prescriptions, and even in Africa there are signs that states are being more proactive, if not exactly confrontational, in their relations with Western states and donor agencies.Footnote 94 Third, and no doubt related to both of these, the development policy that dominated Western development agencies really since the 1980s may be in question. From a number of directions, including from within the World Bank, it has been argued that developing country governments need to be given more policy autonomy and flexibility, and that they should not simply adopt global standards.Footnote 95
In terms of the broad themes of this Special Issue, what an examination of the changing practices of international development demonstrates is that Western states have been increasingly able to pursue projects of domestic and international reordering in ways that are in important respects non-interventionist, at least in a traditional sense. As Afghanistan, Iraq, and other examples show, intervention of a more traditional kind has been alive and well in international politics since the end of the Cold War, but at the same time Western development agencies have developed relations with many developing states that go far beyond this. Western states have relied very heavily on more subtle and intricate ways of attempting to reorder international politics than simply the exercise of coercive power. We should see ‘intervention’ as one tool for global order-making, and despite its high profile it may not be the most important. It is to be used ‘when necessary’, and the rest of the time, and perhaps increasingly, the more everyday forms of management and control exercised thorough the project of international development are to used ‘if possible’.
