American Enterprise Institute

June 8, 2006

[Edited transcript from audio tapes]

11:45 a.m.	Registration and Luncheon
Noon	Presenters:	A. Lawrence Chickering, Hoover Institution
		P. Edward Haley, Claremont McKenna College Emily Vargas-Baron, RISE Institute
	Panelists:	Stewart Patrick, Center for Global Development
		John Sullivan, Center for International Private Enterprise
	Moderator:	Vance Serchuk, AEI
2:00 p.m.	Adjournment

Proceedings:

Vance Serchuk:  Good afternoon.  Thank you all for coming.  My name is Vance Serchuk.  I'm a research fellow here at the American Enterprise Institute.  It is my pleasure to welcome you this afternoon to our event.  The subject of today’s discussion is foreign aid, specifically, “Can Foreign Aid Help Win the War on Terror?”  We are fortunate today to have one of those all-too-rare battlefield victories in the war on terror with the death of Abu Musab al-Zarqawi.  But I think that there is a broad awareness of the fact that the war and terror will be fought and ultimately won, not by flitting around the planet and killing individual terrorists, but as the President likes to say, on the question of this broader transformation, the political and economic conditions that characterize so much of the world, particularly the developing world, and particularly the Arab-Muslim World. 

We are fortunate today to have the authors of a new book, which takes a provocative look at precisely the questions of how the United States can leverage its national power to try to bring about the kind of transformation that this administration speaks so often in its rhetoric, but, realistically speaking, I think when it comes to results, often proves to be far more illusive.  The book in question, “Strategic Foreign Assistance” - copies are available in the lobby - it is also one of the rare works that has gotten genuine bipartisan praise.  I think it has won accolades from the likes of both of William F. Buckley and Joseph Nye.  It is not too often that you see a book with those two names on the back cover both complementing it. 

The way we are going to do the discussion here today is that first I will turn to a three of the four authors.  We are fortunate to have here - Lawrence Chickering, Ed Haley, and Emily Vargas-Baron.  Then, we will turn to two expert commentators, John Sullivan and Stewart Patrick, who are going to offer some commentary on the book.  I, occasionally, in my role as moderator, we will shoot a spitball in the general direction of our discussants.  And after each of them has had a chance to offer some remarks, we will open it to question and answer so that you, too, can have a chance to offer some spitballs in our direction. 

With that further ado, let me turn you first to Lawry [sounds like] and we will just go down the line.  So again, thank you all for coming.  Lawry, the floor is yours.

Lawrence Chickering:  I first wanted to apologize for the fact that I wanted to bring complementary copies of the book to everyone, but the numbers of people who accepted so exceeded the expectations that I'm afraid we ran out of books rather soon.  This is the book, and I hope you will all want all read it.  I wanted to say a little bit about how I became interested in the subject, and then summarize, in broad terms, the points made on the book. 

I have started myself several public policy organizations.  And in 1985, I started an International Economic Policy Institute that worked in more than a hundred countries through affiliates.  The organization was called “The International Center of Economic Growth,” and I wanted it to be headquartered in a developing country and run by that person in the developing country.  So I recruited former President of Panama, Nicolas Ardito Barletta, who got his PhD at the University of Chicago, under Arnold Harberger.  And the organization’s headquarters, therefore, were in Panama City for nine years.  And during this period, basically, economists trained in the United States promoted a system of South-South Learning that resulted in really major changes in more than 50 countries.  We never had a budget of more than two-and-a-half million dollars in our core budget.  We had… up to about $4 million was the peak. 

And one of the things, the powerful lessons, I learned about this was something everybody knows from personal experience, was that if you want to encourage people to change something that they are doing, you have to establish local ownership of the idea.  And the local ownership, in the case of economic policy reform, is really having scholars and people from other countries do the studies, have them do the advocacy, and they will persuade people in ways that is very difficult for people from the World Bank, or from the USA at the international community. 

I started then a program to promote girls’ education in developing countries, and I was focused because my whole professional life has been on public policy.  I focused on trying to develop a strategy for reforming government schools as a means of promoting, getting girls in school, and creating the possibility of change on a scale that is very difficult when you are just working on a handful of schools in hoping the system will learn the lessons from a pilot project.  And we have developed a very powerful way of reforming government schools and bringing girls in the schools and really changing the culture of villages. 

We started it in more than a thousand villages in Northern India, and we are now at an agreement with the Government of Rajasthan and the World Economic Forum to build a model for 50,000 schools serving 10 million children.  One of the things that both of these experiences showed me was that it was possible to do things at scales that were truly strategic, that, truly, could really change another country or have a tremendous impact on another country.  But the key to it was really local ownership. 

In the case of girls’ education, however, the local ownership has to be by rural fathers in patriarch cultures, and we found that really by establishing community ownership of schools they would come to feel this ownership and that there were very few schools that really would not, and very few families who would not, let their girls into school, that even in the most difficult places the most fundamental Islamic places like upper Egypt around the City of Asyut and Northwest Pakistan, there were many schools where every girl in the village was in school and where fathers, before the school, would not let their girls out of their homes, now, would let them go to Cairo to college, in the case of Cairo in Egypt. 

Anyway, I had a long interest in conflict resolution and I have been associated with that.  I wrote a book in 1993 called Beyond Left and Right, the only book anybody is ever likely to see with testimonials from Bill Buckley and Tom Hagen on the same book.  And I was very interested in how the government could work to recruit several societies and citizens as partners in promoting economic, social, and political objectives in other countries. 

And when I say citizens, and citizen organizations, I do not mean just American citizens.  In the end, the most important citizens for this are people in other countries, people who are working for these things because that is part of the local ownership.  If it is about us, they just would not pay any attention.  And when you really can work with people from other places so they become their programs reflecting universal values rather than American values, the scale at which you can really achieve and promote and encourage change, is really truly incredible. 

The challenge that we introduced at the beginning of the book was how people should think about foreign policy in an age when it was no longer about a handful of small strong states, which was the old foreign policy national security challenge.  But how, in a world where, potentially, your adversaries are, potentially, millions of invisible, unknown non-state actors, and where societies in many of the weak states where they take refuge, at where these societies have become substantially independent of the states, that the states have very limited ability to influence societies.  It seemed to us that, in important respects, the foreign policy makers needed to be able to imagine that they could have not one but two policies toward a country, one toward the state and one toward the society. 

And our book, in a way, is really directed toward the second of those, on how it can engage civil society to promote economic and social change.  We focused on four areas in the book, the four areas where we chose just as examples.  Other people will come forward and say other things are strategic and they are undoubtedly right and to note these other issues need to be considered.  But the ones we chose were ones that we thought would be very widely accepted as strategic. 

The first is economic policy reform, and the second, with discussions of ICEGs, economic policy reform initiative, and Hernando de Soto’s work in property rights working now in about 30 countries globally.  The second area was girl’s education and women’s empowerment, and global experiences on that.  And the third is on conflict resolution and recruiting citizens as partners to promote peace and democracy in other countries.  This chapter focused on experiences in Northern Ireland, South Africa, Burundi, and India, and, I think, provides some really interesting and powerful models and ways to think about the promotion of democracy in many places that are really struggling right now.  And the final issue was on the roles of civil society during and after conflicts. 

I would like, really, now to turn over the discussion to my friend, Edward Haley, whom I recruited to this project because I felt that with my NGO non-governmental background and limited knowledge or understanding of traditional thought about foreign policy and national security, that we crucially needed somebody who really knew about these more adult subjects, and so Ed played this role magnificently in the project.

Edward Haley:  Thank you, Lawry, very much.  The brief that I brought to the project was to see it and its proposals in the light of foreign policy and national security, to subject it to the test of realist theory, for example.  And not only am I grateful to Lawry for the invitation to take part in the project, but I have to say that the past two-and-a-half years have been a remarkable expansion of my own comprehension and grasp of these difficult subjects - the difficulty of defeating terrorism in the long war as it is now referred to; the mixed result, to put a good face on it, of existing methods; and the constant problems of finding ways to respond to hostile, weak, and failed states. 

The state-to-state methods that we employ to do this simply do not work very well.  We are now in the fourth year of the war in Iraq, and I think that underlines all of the themes that intrigued me about joining this project and exploring the kinds of things that Lawry has talked about.  It seemed to me that someone coming to this subject and to this book from a perspective of national security policy or foreign policy would find enlightenment in two major areas, and I wanted to say were the two about them. 

Addressing frozen, or stalled, conflicts, conflicts that have proven absolutely unyielding, or to move so slightly was so enormous in effort.  It reminds me of the critique of Kissinger’s salami [sounds like] slice negotiations between the Israelis and the Egyptians.  To move the line in Sinai a kilometer took months and months and months and billions of dollars, and it very quickly revealed the weaknesses of that kind of approach.  Five years after the second intifada began, there are more Israeli children living under the poverty level than there were before that time, despite enormous efforts in engagement of the President, billions and billions of dollars expended. 

I certainly do not have to evoke the whole North Korean issue, which remains deeply paralyzed and very troubling, or the prospect of coping with the changes that are lurking, obviously, in a country like Egypt.  When I was in Egypt last… Ayman Noor had been released from prison, and we were driving with friends from the bazaar, and here came a flatbed truck of his supporters heading for a news conference, outnumbered by the policemen trailing the truck and surrounding the news conference, and yet, that was a year ago.  It was possible to be very hopeful, it seemed, about in the pluralism and that was almost… one could almost touch, emerging.  I must say I am not so hopeful now, but perhaps the horizons are too short. 

The second area in which I think there is grist for the foreign policy community is in international theory and the way we think about international politics.  It has become a commonplace - in fact, it is a bias - of those who study international politics - to treat the international system as the main factor in affecting the behavior of states.  And that is commonplace in the past decade or so to recognize the impact of changes in international political economy, for example, on societies, on the states themselves, the phenomena that are associated with democratization, with globalization, and the like, to reason from the outside in, as it were. 

Obviously, this is a key element in the realist theory and it always has been, to treat it, in fact the international system as the most influential factor, and in some sense the only one we have to worry about, in deciding how states and societies will react.  What this project has revealed to me is not that this is a poor or unreliable way of thinking about things, but that it is essential to consider the impact of factors that move in the other direction, that move from societies themselves, from inside other societies, and impact the international system.  In other words, to think of international politics now much more as a two-way street, working from the outside in, and at the same time, from the inside out. 

Surely, the past five years and perhaps longer are more notable for the effects on international politics from the inside out rather than the other way around.  These were some of the things that drew me to the project that I uncovered in the process of working on it, for which I will always be grateful to Lawry, in which I invite your consideration.  Thanks.

Emily Vargas-Baron:  It was a pleasure to see all of you, I have many friends in a group.  We decided to work on this book… I think the core issues were the fragile states and the need to shore them up and the aspect of non-state actors, where a new approach really was needed for purposes of working effectively.  We realized that a civil society approach, which has been very successful and various international assistance activities that have been undertaken by the United States and other countries would be probably the best approach. 

But new methods for working with civil society were required, methods that were flexible, very rapid, agile, culturally appropriate, or culturally derived, led by the people of the countries, and that would meet perceived needs, not necessarily the perceptions that we have of others’ needs.  I focused especially, in the book, in addition to the general chapters, on the role of civil society during and after conflict.  I am going to make a few comments about that and then move to the issues of “wither goest.” 

We have found in our studies of successful educational policy and program development in countries with conflicts and after-conflict that it is feasible and indeed advisable to work with civil society.  A lot of people are positive that you cannot do it, and the answer is you can, very much, with differing approaches, because each country is different, and we want to underline that. 

We have also found that in working with civil society organizations that include universities, institutes, professional associations, as well as NGOs within countries, and religious organizations within countries, that they must be transparent in the way they are framed and accountable.  So quality becomes an issue, and if some of you are interested in that, we can talk more about that later. 

We have found in our studies of civil society actions during and after conflict that they need to be shored up.  We have actively engaged quite a few of those who have been working on Colombia in shoring up various universities, institutes, NGOs, because if they are not there for the post-conflict period, which is going section by section of the country, then the very underpinning that is required for insuring a continuation of democracy and of developmental activities to address manifest inequities will not occur. 

We have found that there is a window of opportunity of 18 to 24 months after the cessation of conflict or of relative peace, because there are many times wherein you have continuing conflict in certain parts of countries or throughout a country, but yet there is a declared peace.  During that 18 to 24 months is when you can really develop policy initiatives and innovative programs.  After that period, if the innovation does not occur, the traditional forms and the very counterproductive forms of civil society and of government flip right back and take up the space, and people feel they need the comfort zone of a continuing life as it was before. 

Unfortunately, that often means cyclical conflict and a return to insecurity.  The areas that we have noted of great importance in the conflict and post-conflict era in working with Civil Society Organizations are emphasis on youth and ex-combatants.  Youth is probably the number one group.  Ex-combatants are often a function of them, but also include some adults and young children, unfortunately.  And there, comprehensive programs are needed that include citizenship, skills training, conflict resolution, reconciliation, and various areas of trauma healing. 

The sad reality is that work on trauma healing and conflict resolution is usually a one-off [sounds like] activity, where contractors from the US go in, that is done for a certain period of time maybe two months, three months, four months, if you are lucky, six months, but is not a continuous thing.  Those of us who go into countries at a later point will find that the trauma is coming back up, reconciliation did not occur, and a plethora of problems are there that are going to lead down the line to different conflict, unless there is an intervention that is appropriate, by the people themselves who should be trained. 

The second emphasis that we find is on early childhood development and women.  Eighty percent of the people are affected by conflict.  Most deeply affected are, tragically, the innocent ones, children and women.  But unfortunately, many of the interventions have not addressed that equitably [sounds like], the Civil Society Organizations that served those children and women, the emphasis, oftentimes, being on other types of infrastructural and, more directly, economic development and interventions. 

Another lesson we have learned is that special attention must and should be given to ethnic minorities and other subordinate groups.  And the reason for that is that in those countries where they have not done so, such as the Lao PDR or Vietnam, it has come back to haunt them.  And they have had to put in new policies, and deal with increase of violence and social anomie.  Moving from central planning to participatory approaches has been found to be absolutely essential.  And if you reflect back on some of the interventions that have been occurring, participation has not been a notable element of them. 

It is critical, though, in the conflict and post-conflict era to work with Civil Society Organizations who are enabled to participate at local, provincial, and national levels.  Roles and responsibilities need to be outlined at that point, and some of the problems we find of overcentralization and the reliance on central governments to deal with those conflict situations is notable.  Again, the issues of communication and of verticality, of horizontal relations need to be given special attention.  Development strategies, we find, should be developed during the time of a conflict for preparation and then implementation, rapidly, in the post-conflict period.  And in this, we oftentimes will emphasize democratic governance and participatory approaches that are required for that. 

Now, there are many, many topic areas.  We did not cover all of them in the book.  We did not try to be exhaustive.  We tried to give examples of areas, which can be addressed through assisting civil societies within countries to develop programs.  But we also dealt with some strategic next steps.  In this, you will find several references to USAID, where I worked for six years, and we believe that USAID has, without question, a continuing role. 

And we posit a dual alternative:  Either USAID could be assisted to develop a new approach, a civil society mechanism, that would enable the rapid and agile and participatory approach in working with civil societies in other countries.  Or, in addition to USAID, one could posit the creation of an independent institute, not unlike USIP, but with a more action arm that would be free of earmarks, that would permit the development of national strategic plans that would be developed with the civil society leadership of a country, that would have agile, far more agile, contracting mechanisms and grant-making systems.  That would permit local-level institutions, local-level civil society institutions, and indeed, sub-regional or provincial and national ones, to manage funds with transparency and accountability, but without some of the arcane requirements that currently exist if funding is to be made to them, and it rarely is. 

The heavy requirements of contracts and of the IG approach within USAID, as currently constituted, would not be utilized in its current form.  You have to have controls and accountability, but not that level of control, and of complexity that requires extreme amounts of time, sometimes a 10-year lead-up period simply to get something going.  Some efforts have been made to make systems more agile, but they are not agile enough, as yet, in our estimation.  Such an institute would also have a very strong evaluation and monitoring component, not only to see what results are being achieved and what processes have been successful, but also to help share experiences from country to country, from region to region within countries. 

This evaluation aspect currently does not exist in our foreign assistance system.  We have instead what is called impact evaluations, which, essentially, are composed of small teams that go to countries for a two- to three-week period and they assess the general impact that has occurred.  This is not an in-depth evaluation.  We are positing, therefore, very carefully designed evaluation work with a sharing of experiences, a rapid timeline of development, and a careful protection of local CSOs within countries from potential danger.  Lawry often says that by working with certain CSOs, you are painting a target on people if you say it is American money that is supporting you.  And that is the case in many countries.  I was recently working in Belarus and you find this.  It is extremely important for there to be a protection of local groups and for buffer systems to be developed.  

This is totally doable.  And, most of all, this approach, we feel, would permit us as Americans to develop relationships of trust, of partnership, and to network with people in other countries in a way that will be positive, and where we are demonstrating in a very practical way that we are good neighbors, and we do want to have extremely good relations with them through the years.  So our approach in working with civil society is focused very especially on building relationships of trust that are necessary for future continuing relations.

Vance Serchuk:  Thanks, Emily.  I think that there are a number of questions, which your presentations naturally raise, but before I start shooting my own respective spitballs I should give John a sort of chance to do so.  John, please go ahead and then Stewart.

John Sullivan:  Well, I would like to thank you, Vance, for inviting me to comment on this book, and AEI, for holding this event, because I cannot really think of a book I would rather comment on.  This is a terrific read, and it is something that… Lawry called it a not-quite-grown up subject, and I think many people would respond that way, Lawry, would think in those terms.  But it has got to be the subject of today.  And what I am going to try to do on my brief remarks is to put into some context, as to why I am so convinced that it is the subject of today, and why decision makers have to take this really seriously. 

But first, in the interest of full disclosure, I have to confess.  I worked with ICEG, the International Center for Economic Growth for a year-and-a-half when I was on sabbatical from my own organization, the Center for International Private Enterprise.  I wanted to take a different look at how things might be done.  And working with Lawry and Nikki Barletta and the other team there did, in fact, give me a lot of food for thought and was a great experience.  So I am not exactly impartial. 

And the other thing I have to confess in the interest to full disclosure is, when we opened our doors at CIPE… CIPE is a part of the US Chamber and an affiliate of the National Endowment for Democracy… when we opened our doors in 1984, literally, the first person to walk through them was Hernando De Soto, whom I have known, as you can do the math, 23 years.  We worked very closely with him.  So I am not impartial of Hernando either. 

The other two parts of what I can be more impartial about, but I just think the book is right on target for any number of reasons.  And the first reason is, hearing this morning, which I will talk more about in a few minutes, on democracy promotion, and the ritual phrase was uttered by everybody in the room, Senators and witnesses, and, I suspect, thought about by people in the audience.  There is more to democracy than elections, and, of course, that is the end of the subject right there.  Nobody ever talks about the “more.”  Well, here is the “more” that you got to have if you are going to have democracy in very concrete specific real terms.  And if we do not do this piece of it with as much seriousness as we do election observation and the other pieces that are easier to understand or easier to get your arms around, the rest of it is not going to mean anything. 

Let me put this, as I said, in some context, and then I'll have some comments on the book itself. Yesterday at the US Advisory Council for Voluntary Foreign Assistance, whose executive director, I will point out, is hiding in the back, Joss Monroe [phonetic], Ambassador Randall Tobias, the new AID Administrator, laid out his plan for transformational development.  And those of you who read the Wall Street Journal today realized that it immediately became a subject of great debate.  Stewart’s colleague over at the Center for Global Development was featured in that article, Steven Radelet.  So it really kind of ties this panel together very nicely in so many ways. 

But what Ambassador Tobias is laying out is a theory of transformational development, development that makes a difference to get you to the administration’s goals of ruling justly, building institutions, educating everyone.  This book is the transformational development logo, it seems to me.  So if you if you have not given it to him yet, I want to give Joss [sounds like].  I know you said you are running out of copies.  Okay, well, if you are running out of copies I would advise we get at least one to Joss Monroe at the back there, so that it will immediately get fed into the AID pipeline because this is what they need. 

This whole concept of civil society and democracy is one of those subjects that that has talked about, but hardly ever really done well.  And they are such a powerful tool.  I cannot resist throwing out one of the vignettes.  There are many, many vignettes that is in the book, and that is the subject of the legislative advisory program.  I am sure Lawry knows why I am doing this.  When I was working at ICEG, a fellowman, Carlos Desparadel [sounds like], who ran a very, very interesting think-tank in the Dominican Republic, came up with this idea.  And so we worked with it a bit, and then when I returned to CIPE, we helped support it and spread it around in different countries. 

The idea is that parliaments do not function in a lot of places.  And why do they not function?  I am trying to condense a lot of stuff into a short period, so please do not think that I am being flipped.  But they do not function for a couple of reasons.  One, in many countries the members do not have an office.  In many countries, they do not have staff.  In a lot of countries, they do not see the legislation until the last minute.  You get 50 bills at the last minute.  How many of them can one person read?  So there is not much capacity.  So how do you move this process forward?  How do you begin to build this capacity? 

Well, Desparadel, who is a former central banker, and despite that, became a TV personality of note in the Dominican Republic, it is not a usual paring that you would find, came up with his idea of getting independent think tanks, and I think this will appeal to Vance because it is AEI who was one of his models.  But independent think-tanks that can create legislative advisory programs, if they can take these bills that the members of parliament either are not equipped to deal with, do not have time do deal with, they do not have staff to deal with, and essentially act as a surrogate, and they can take them into cost-benefit analysis.  Now, that all sounds really nice and very precise.  But then he took the second step and he said, “Then you got to advocate for this stuff.  You got to really develop strong communications and advocacy programs.” 

So that is where the TV show came in.  He got journalists, not professional economists, to write up the final report, although he did have the big thick background study, and then that was put into the newspapers, Informe El Congreso.  It is a beautiful idea.  And it spread like wildfire through the IECG Network, through other think tanks in other regions.  We ended up, I guess, over the last 20 years at CIPE.  We funded dozens of these, and currently even have one going in Iraq, of all places, trying to get it off the ground, and in Pakistan. 

So this is an idea that has got legs.  And what it does is it creates political will.  You always hear the phrase,  “There is on political welfare for reform.”  Where do you think it comes from?  It is not going to descend from outer space.  A visit group of visiting Americans giving lectures, and I agree exactly with what Emily says.  It is not going inject political will into the society.  You got to build it.  You got to build effective demand for reform, and these kinds of programs do that.  Other things, like national business agendas developed by business associations, can do that as well. 

What these kinds of programs do and what the civil society component is, is it effectively begins solving the collective action problem.  How do you get small numbers, small people, isolated individuals to come together in a group in order to take collective action to demand reform?  These kinds of programs can galvanize that.  But it has to be led by, owned by, and thought of by the domestic people in the country.  We cannot keep sending in squadrons of international advisors who sit around, get all of the ideas from the locals, write them up in their report, and turn it in when they go home.  It does nothing. 

So I agree completely with the approach.  Educating women, I think Lawry has said so much about.  You said so much about it.  I could not agree more.  It is exactly what has to be done.  We have small program like that in Afghanistan, and it is just astonishing to see the change that just introducing the idea of business development in very, very simple terms to young Afghan women, it is just such a liberating thing.  It is hard to believe. 

Let me say more, a little bit more of a word on the terror side, because I agree with Ed’s comments very much that this is a new strategic reality.  Now, I have realized a lot of people… I'm pausing for a brief commercial announcement at the moment, not for myself, but for Hernando… a lot of people do not really believe this.  Okay, there is going to be a lot of skepticism. “Oh yeah, I got all these NGOs.  That is nice and they are going to fight terrorists.  Sure, right.” 

Okay, here is the proof.  This is a broad side that we put together for Hernando conference.  Hernando came to Washington, about two years ago, I guess.  And CIPE and NBI put together a conference with Hernando, to say, “Okay,” in the words of Walter Mondale, “where is the beef?  Show us.  You got some great ideas.  Did it make any difference.”  Well, in this little broad side, I brought a few copies but there is more on our website, and here is the commercial, www.cipe.org.  There is also a video on there. 

We have Peruvian generals saying that without Hernando’s ideas, their bullets would have not gotten it done.  It was the war of ideas, not the war of bullets, that, in the end, made the difference.  We have got former cocoa growers talking about why they left their cocoa fields, informal sector taxi drivers talking about how Hernando’s ideas made so much difference to them.  And at the end of the day, what Hernando did, he did a lot of other things that are documented in here, like securing property rights, and getting people in the business, and breaking down the walls against entrepreneurship. 

But at the end of the day, what he did do and there is a… on the front here is Abimael Guzman, head of the Shining Path, admitting that Hernando De Soto defeated him.  So I think we can trust him to be right.  So for those of you who were skeptics, I would encourage you to look at that.  Now, unfortunately, we have all been talking about the good news. 

Let me just tick off real quick, because my time is limited, some areas where we still got a lot of work to do on.  One, the governance of NGOs.  In way too many countries, these organizations are poorly governed, people do not know what, they have never heard of corporate governance, let alone NGO governance, and they end up being the tool of one person.  They do not get embedded.  But the good news is, if you work with them, and give them some training and some development… so I would supplement your strategy by putting in on the first instance, governance training for a lot of these NGOs. 

Second instance, transparency.  Another part of governance is these organizations have got to become more transparent, because that is the only way we are going to separate out the Pongos-Gongos from the NGOs.  Pongos are politically-oriented NGOs, usually set up as in the West Bank, although a huge number of them are, by politicians, in order to collect money and to create a platform for themselves.  Some of them do some good anyway, but they are not what this book is talking about.  Gongos are government fronts, and there is a whole lot of them.  And you can end up working with an organization, thinking that you have got a viable grassroots organization, and, really, what you got is a Gongo that is just not going to go anywhere. 

So the transparency becomes important.  The hearing this morning that Secretary Lowenkron was talking in front of… he is the Assistant Secretary of State for Democracy, Human Rights and Labor… Carl Gershman from the NED, Mark Palmer from Freedom House, a number of other people.  The bad news is that a lot of the authoritarian and autocratic governments have figured out some pieces of this, and they are working hard to come up with a strategy of containment.  How do you keep economic growth going, how do you contain these NGOs, and how do you limit their ability to accomplish all the good things that are in here?  The NED has written a paper on that. 

I think it is on their website or soon it would be.  I would recommend looking at that, because we have got to be just as nimble and agile in figuring out ways around a government, whether it is a benign or troubled government, like Afghanistan, where there was an attempt to create an NGO law, Egypt where they are working on one, or Russia, where Putin has… there has been a big battle over the last six months in Russia where Putin is really putting in place NGO legislation to control exactly the kind of organizations that you are talking about, to limit the effects because they have begun to realize that. 

Last word, terrific read, pass it out to your friends, buy it for all the politicians, send it to as many government officials as you can.  We need to do this.

Vance Serchuk:  Stewart.

Stewart Patrick:  Great.  Thank you very much.  Thank you, Vance, first of all, for inviting me to be able to comment on this book.  I know the missing author quite well, going back to my days in graduate at Oxford, Isabel Coleman, and having a lot of personal respect and administration for her work.  It is really great to be able to be invited to comment on this book. 

As you may see in the bio, I run the Weak States and US National Security project at the Center for Global Development.  And the fact that CGD, which did not get its start in the field of security, has moved into that direction, at least, somewhat testifies to the growing awareness.  And I think this is true amongst defense actors, development actors, and diplomatic actors, that there is a close relationship between economic stagnation, authoritarian misrule, and weak institutions, on the one hand, and political instability, extremism, and violent conflict.  So at CGD, there is a growing awareness, and I think from everyone, there is a growing awareness that when you think about the weak and failing states in the world, they represent both the core of today’s development problem, and also a leading source of many of the threats that confront us today.  I think, that has become conventional wisdom. 

As Ed said, the foreign policy community is only belatedly recognizing that the tools that we have at our disposal that actually deal with weak and failing states are reasonably marginal or ineffective.  There has also been a tendency, as you know, over the last several years within the aid agenda to reward so-called good performers, those countries that might be eligible for the MCA criteria.  What has been missing is a coherent strategy that actually tries to deal with the world’s weak and failing states.  And the quest for such a strategy has recently become one of the main points of preoccupation among not just the US government, but a number of different OACD governments, the World Bank, and the United Nations. 

Now, Strategic Foreign Assistance, that is, this book that we are discussing, identifies a key dimension of any strategic and new coherent policy towards weak and failing states, and that is, to try to support the civil society organizations that can build and provide the human economics and social capital, as well as the political momentum required for transformational development and democratic change in those countries.  I do want you to look at the book because it does have a number.  It provides a number of pragmatic examples of civil society organizations that have a track record, that require minimal state intervention and bureaucracy, that are fairly inexpensive, and then that, in effect, empower individuals and communities to act in their own interest.  So this is an agenda, as the authors point out, that could unite conservatives and progressives alike, so I think it has some legs. 

What I would like to do today just in my brief comments is, first, to actually address the broader theme of this session, and then have some specific comments on the book itself.  There may be a critical edge to those comments about the book, but I hope they are taken in the spirit of overall thinking, that it is an important contribution. 

At first, let's turn to the title of this gathering, “Can Foreign Aid Help Win the War on Terror?”  I think if we are actually serious about trying to answer that question, we have to get a little bit more specific and a little bit more candid about what we mean both by foreign aid.  And what we mean by the war on terror, and, more explicit, about the presumed causal connections between external assistance, on the one hand, and political extremism on the other. 

First of all, what do we mean by foreign aid?  There is a widespread tendency to lump all of foreign aid into a single basket, and then make blanket assertions about its effectiveness.  In reality, of course, aid takes divergent forms, from technical assistance, to budget support, to debt forgiveness, to service delivery, et cetera.  It also has varying objectives, from police training, to military support, to democracy promotion, to narcotics eradication, to paying off allies, to actually providing development assistance that tries to increase growth and social welfare in countries around the world. 

Since World War II, there has been a frequent tendency, which is basically the beginning of the AID Enterprise, a frequent tendency to equate all aid with “pouring money down a raffle,” in the immortal words of Senator Robert Taft.  But assessments of aid effectiveness have to be linked to the purposes of that aid.  During the Cold War, it stands to reason that much aid had very little effect on development because that was not its purpose.  We were not giving money to Mobutu to ensure good governments in Zaire. 

Second, I think we need to clarify what we mean by the war on terror.  Here, I'll be a bit provocative, perhaps, especially, in a context in both Afghanistan and Iraq.  From the beginning of the wars, there has been a tendency, frankly encouraged by the Bush administration, to conflate terrorists and insurgents.  This lumps together, first, insurgencies, terrorist means and pursuit of aims that are often nationalist or sectarian with a smaller group of transnational jihadists of an Al-Qaeda variant, inspired by Salafi’s brand of Wahabi Islam, who seek a global caliph faith [sounds like] stretching from Spain to Indonesia.  Blurring the distinction can make it difficult to identify the enemy, understand his political motivations, and craft a response. 

If our primary concern is with insurgency, the main question becomes whether or not outside aid can win “the hearts and minds of the citizens.”  If it is diminishing the transnational terrorism, it is whether aid can reduce the underlying taproots of political extremism or what we believe those to be in the Muslim world.  I will assume that latter objective is really what we are talking about here. 

The idea that aid can reduce support for Al-Qaeda rests on a number of causal assumptions.  First, it presumes that the root causes of transnational terrorism are to be found, at least in part, in economic stagnation and political oppression.  The White House has explicitly taken this view, that this national strategy for combating terrorism, and its affiliated documents, explicitly speaks of diminishing the underlying conditions terrorists exploit, including poverty, social disenfranchisement, and a week state structure. 

The book, Strategic Foreign Assistance, effectively takes the same view, saying that terrorism has both objective causes, poverty and unemployment, and subject causes, alienation and humiliation, and that CSOs, civil society organizations, can address both of these.  And I think it merits saying that there is little scholarly, much less political, consensus on the degree to which terrorism is actually motivated by relative deprivation, inequality, marginalization, or political alienation, as opposed to other more concrete grievances.  That is something we can discuss.  Still, it is at least reasonable to propose that the sources of terrorism, or at least, somewhat affected by background economic conditions that provide the base for what some have called “the Ziggurat of Zealotry,” that sustains and supports extremist violence. 

The second thing that this argument of the tie between aid and terrorism presupposes is that rather modest external resources can actually ameliorate these underlying conditions, if this causal connection is presumed.  President Bush took this position at the UN General Assembly in September when he said, “We must help raise up the failing states and stagnant societies that provide fertile ground for terrorism.”  But is the administration, if you believe that, actually putting its money where its mouth is?  The national security strategy of 2002 famously claimed that the United State is now more threatened weak and failing states than we are by conquering ones. 

And yet, if one looks at the federal budget, one cannot help but be struck by the enormous gross, and some might say obscene, misalignment between the amount of money actually devoted to military instruments versus those devoted to the diplomatic or developmental instruments and other civilian instruments that actually might make a difference in this regard.  Beyond that, the 150 account, if you take out,… that is the foreign assistance account and the diplomatic [sounds like] account… if you take out Iraq, Afghanistan, and Pakistan, rather little of that assistance goes to weak and failing states.  And despite all this talk about democracy promotion being a generational struggle on the Middle East, let us look at the trend lines for democracy assistance in that part of the world. 

Okay, so let us move now to a few comments on the manuscript.  As I noted, I think it is an important contribution to suggest that civil society organization have an unappreciated role in advancing broad US objectives in troubled countries.  At the same time, I want to point out a few areas where I think there are some difficulties or where the manuscript could be strengthened.  A couple of them are methodological. 

First of all, the manuscript does not include any figures on current US government support for civil society organizations.  So I am willing to believe that we are not doing enough, but the reader actually is stuck in the vacuum of data when it comes to actually evaluating the recommendations that are actually made.  I mean, how much of the Freedom Support Act, NEPE [sounds like], et cetera, how much of that is actually already going to civil society organizations? 

Second, I think that the manuscript actually exaggerates the degree to which there is a vacuum in the literature about civil society organizations.  It makes a couple of claims that I do not really think stand up to scrutiny.  I think there is actually… it has been a growth industry over the last few years, and it would be worthwhile embedding this work in that broader literature. 

I have a few comments on the overall conceptual framework, as well, as well as its causal assumptions, and normative and policy prescriptions.  First, the term “civil society,” I think, it needs to be unpacked a little bit.  I mean, I think that there is an implicit assumption throughout this book, which is consistent with the tenets of classical liberalism, that civic associations naturally temper extremist goals, advanced tolerance, and mutual understanding, and facilitate the peaceful adjustment of difference. 

And one is left with the impression, to paraphrase Robert Putnam, that all the Middle East needs is a few more bowling leagues.  And that may be, and there is no doubt that many civil society organizations can have a major impact on the taproots of terrorism, but the Middle East also includes a large number of what I would call “uncivil society actors,” not, obviously, something I coined, including religiously motivated charities and political movement like Hamas.  And it would be interesting to know whether or not there is a sense of, that there should be eligibility criteria for actually dealing with, or at least codes of conduct for actually funding these organizations. 

Second, I think that the links between civil society organizations and the roots of terrorism are less persuasive in your argument than the idea that civil society organizations are important for enhancing development and democracy and reducing conflict.  I think that may be inevitable because there is, undoubtedly, a lot of broken linkages or intervening variables between the two of them. 

Third, I think that there is an in-built tension between the notion of strategic foreign assistance, on the one hand, and the principle of local ownership.  As you write, the challenge is not for the United States to try to determine the agenda of these civil society organizations, but sort of work with them in objectives that are likely to be largely congruent.  This will imply, and something that we have to get used to, a greater tolerance for some divergence between our preferences in their own. 

There may be a trade-off, as well, between development effectiveness of these interventions, on the one hand, and the public diplomacy benefit that the United States can stand to get from this.  Because as you point out, too close an embrace by the United States could kill these groups with kindness by discrediting them or making them seem simply stoodges for American policy.  It actually raises the question as to whether or not some of this stuff should be done in a covert manner, particularly in a … not something you usually see some development organization saying … but just from a strategic perspective it might make sense. 

I also think that the manuscript skirts the inevitable tensions between using aid for “national security” purposes and for traditional development purposes.  I think while reducing extremism and reducing poverty are likely to be coterminous in the long term, in the short term, there may well be, shall we say, tensions between freedom from fear for us and freedom from want for them.  And negotiating that tension is going to be a big part of the foreign assistance reform, as well.  I think it also would be a mistake to depict support for civil society organizations and support for state building as mutually exclusive undertakings. 

What is lacking in many parts of the developing world, and needs to still have a lot of emphasis, is actually creating a state.  Now this can sometimes, in forums at AEI and other places where people really cut their teeth in the 1980s and 1990s on the state being a problem, can create a little bit of cognitive dissonance.  But as Frank Fukuyama has pointed out, a lot of places around the world actually just need a minimally functioning state, before you can start to argue over what its precise scope should be.  So that is something we need to bear in mind.  And I think that the relative role of civil society organizations will depend on how strong a state is, what its capacity is, and how legitimate it is.  And so you can even think about two-by-two matrix system, what the role of civil society organizations should be. 

I do agree that there needs to be more criteria of what countries we should focus on and why you think these particular areas of activity provide more bang for the buck, or perhaps one should say more non-bang for the buck, the girls’ education, et cetera.  I will just say something on the empowerment of women and girls’ education, which is one of the chapters.  In principle, I think that should be a major focus of US assistance, but I would have a caveat with two of the arguments that are made.  The first is that there maybe a trade-off and many very volatile situations between actually investing limited resources in girls’ education, for instance, or the empowerment of women, and in dealing with alienated and, potentially, quite violent males, particularly in a country where you have youth bulge [sounds like], so that is going to be a trade-off. 

The other is, I have some qualms about the notion that assistance to empowering women and girls’ education should be an explicit condition of US foreign assistance to particular countries.  I think we already overload the foreign aid decisions wildly with the trafficking in persons, counter-narcotics, counter-terrorism qualifications, and I think that it would be much better to ramp up the Office of International Women’s Affair of the State Department, which currently has a window-dressing budget for political purposes.  I think we should just really ramp that up and perhaps do annual reporting on the status of women on those countries.  I am not sure that we want to create yet another hard hurdle when we have a lot of fish to fry in all these countries. 

Anyway, I hope that these have been useful comments.  Thank you.

 Vance Serchuk:  Stewart, thank you very much.  Before we go to question and answer, I will toss a couple of questions at our panelists as well and then will turn it over to you guys.  Overall, I mean I was very, very impressed by the book.  As I was reading it, it occurred to me that hearing this notion about supporting civil society organizations as a way of trying to influence and gradually transform societies in particularly very cost effective ways, it was all very, very familiar and that there was someone who did it extra-ordinarily well.  It just happens not to be the US government; it was the Saudi government.  There are plenty of instances where the civil society organizations have been used very effectively in the war on terror, just, generally, not by us.  And, in fact, when you look across the greater Middle East, you do see areas in which other actors have very, very effectively been able to push it. 

That being said, and I think this picks up on some points that Stewart was highlighting as well, one, the quality and nature of the states that we are looking at seem dramatically different.  On the one hand, you have places like Iran or North Korea, which you cite in your book, where there is a despotic strong state, where US national interest is clearly to undermine the track and somehow ultimately substitute something else in its place.  And using civil society as sort of a wedge to get in there, versus a place like Afghanistan, which is a failed state, where, frankly and I think [indiscernible] argument here [indiscernible] very, very compelling. 

You have deeply entrenched patronage networks, which are a form of civil society, maybe uncivil society, but civil society nonetheless.  And to the extent that you further want to support them, you actually do so at the risk of undermining the state capacity that you so desperately want to build. 

Having just come back from Afghanistan a few weeks ago, given a choice between funding or getting an effective national police force and more Afghan women educated, in an ideal world it would be great to have both.  But there is no question that one is approximately a million times more important than the other.  I mean, simply put, in a place where there is a democratically elected legitimate state that does not have capacity, if anything, it seems like civil society can be as much of a problem as the solution. 

And, I guess, then third, you know, looking at places like Egypt, Saudi Arabia, Pakistan, again, arguably places that have done a very, very good job,  using the matrix of civil society, if you advance illiberal ideals throughout the region, I guess that the question that I repetitively bumped up against in reading the book is, as much as we recognize that we need to be able to influence civil society in these places, is a top-own bureaucratic solution, where we have a national country strategy which is come up by the U.S. Ambassador or someone sitting at USAID, really the solution? 

I mean Hernando De Soto is a great example, but, if anything, it seems like… and I am stealing liberally from William Easterly here, who was here just a few weeks ago.  Part of the challenge in foreign aid is precisely that, too often, we want to have a big plan, a great strategy that we come up with and then we implement.  But the reality is that the places where it seems like often this does work, it is very much more from the ground up, where there is an innovator who we just happen to get very, very lucky with, and who we can support.  But having the visibility of who that person is, and where they are, seems like something that even more than our ability to make a national country strategy, the ability to find that person, and discover that person, and support them organically where we have the biggest problem. 

As I said, part of the nature of coming to AEI and giving a talk is you get spit balls tossed at you.  That is how we try to guarantee that we have fresh thinking [sounds like].  So before we turn to question and answer, couple of ideas have been tossed out.  I would like to turn back to you guys, give you an opportunity to explain to us why our critiques might not be entirely on point, and then we will go to the audience.

 A. Lawrence Chickering:  There were quite a lot of comments made, so I will just try to focus on a few of them.  I would like to start by saying what, at least, I understood that we were not trying to do.  We were not trying to critique US foreign aid, the current state of US foreign aid.  We were not trying to endorse civil society, in general.  That was not the purpose of the book.  Many people have tried to look at foreign aid and try and understand it, and they give up because it is much too complicated.  They cannot even get numbers on what we are doing, which explains, in part, why there are no numbers on this book.  Our purpose was not that. 

 And part of the purpose in not doing that was political, because the structure of all programs reflects a combination of ideas and political constituencies and very complicated things.  And our intention was not to take on any current set of institutions or policies. 

Our aim was really rather to do something much more limited and much more narrow.  And the much more limited and much more narrow thing was to say, what areas might we pick out where you could really make a difference in a country, if you really focused effort in that area.  And one of them was the economic policy reform because of the wonderful work that CIPE is doing that ICEG did.  The idea was the investment in this work is enormously short of its value and how can you develop output, conceptions of output, that really try to encourage increased investments so that the investments start to approach the enormous value that they are creating. 

In the area of girls’ education, in some ways I think the chapter on conflict resolution is the most important chapter in the book because it underlies all of the other areas.  And one of the central challenges in all of these countries is that in traditional societies people tend not to communicate across loyalties.  They tend not to communicate outside their own loyalties, and that part of nation building, a crucial part of it, social and psychological underpinning of democracy, is that people be able to communicate across loyalties, that there are informal modes of accommodation that can occur so you do not load the entire system.  All the conflicts underneath it, on to these formal institutions that are the preoccupation of most people concerned with, democracy, transparent institutions, voting, and all of that. 

The chapter on conflict resolution draws on these experiences but I want to focus especially on one, the experience in Northern Ireland leading up to the so called Good Friday agreement in 1998.  This was an effort by civil society in Northern Ireland, which held literally hundreds, and hundreds and hundreds of public dialogues, bringing people together in conflict to establish trust and encourage a dialogue.  At the beginning, the formal negotiations, as is the case everywhere, would not include the groups, especially the para-military groups that had not given up violence.  But the idea was that the civil society engagement gradually built trust among all these groups, so that in 1998, when the formal agreement was signed, most of the groups, all of the major groups, including the para-military groups, had basically achieved a level of trust, so they were all at the table. 

The same points which we focus on, and with regard to peace, are also important with regard to development of democracy.  A major problem in encouragement of democracy in a place like Egypt is that people do not communicate across loyalties.  They do not trust each other.  Nobody trusts anybody else.  And if we embarked on a program through local institutions there, or in Iran, or in any number of other places, encouraging dialogues, public dialogues not on the issues of democracy and opening up, which is what they avoided in Northern Ireland, but on issues of water, or jobs or the environment or any number of other things, on all of the country’s problems, the governments in any of these places would not put down independent civil society organizations.  They would embrace them. 

My colleague, Abbas Milani, says that, “In Iran, if we wanted to go and have public dialogues bringing together people on the terrible state of the economy there, or jobs, or any number of other, they would welcome it.”  It would be possible to engage the government.  It would be possible to engage all sectors of society in this.  I think that we were not able really to go into detail about these, we are now really developing and taking the analysis we start with here, on the uses of civil society to promote democracy as a much larger subject.  In a way, the title, foreign aid as a focus, is misleading, because foreign aid is confined and constrained in certain ways. 

The real subject of our book is the roles of civil society in promoting international security, democracy, and so on.  And because a lot of it is really about how to promote trust, how to reduce conflict and all of that, across all of these issues we are talking about. 

I’m grateful to the other speakers, especially to Mr. Patrick for his criticisms, and reservations about certain of the aspects of the book.  We are right now writing an article, preparing an article for publication later in the summer that will really try and address a lot of these of things and go on to other levels. 

 P. Edward Haley:  If I could comment on a couple of the questions, particularly the issues of links between civil society organizations and reducing terrorism, and the tension between strategies of foreign assistance and local ownership.  About the first, the links between CSOs and terrorism, any strategy that is likely to succeed in defeating terrorists, to begin with, the task of isolating them, of separating them from the rest of society.  And surely one of the best means for doing this is to provide the rest of society, the overwhelming proportion, alternatives that they might pursue in seeking their personal objectives, to not allow a society to be faced with the government and the Muslim brotherhood, for example.  And so the risk in minimizing that potential of the civil society approach for this purpose, I think, is really great. 

On Vance’s comment, it seems to me it is a false dichotomy.  Who would want to choose between a police force and educating women?  No one. Perhaps the choice might be between a bit less money for educating women, and a bit more money for dialogues between the dominant ethnic and tribal groups inside Afghanistan.  This is not a functioning society that simply fell on bad times, but a society forced together very artificially, of very, very different groups.  And the notion that it would be a simple or even feasible project to impose an effective central government in a reasonably short period of time seems to me a false dichotomy. 

The state-to-state actions of the US government will certainly focus on that enterprise, but, doubtless, would need to be assisted in a variety of other ways.  So I think we need in this to keep the allure of the state-to-state level of action in its place.  It is irreplaceable.  It cannot be done away with.  It can be made more or less effective, but we are talking about other kinds of considerations that might be brought to bear. 

We were fully aware of the tension between strategic foreign assistance in local ownership and if we skirted it, we certainly will not skirt it in the article.  And it is why we considered, as Emily referred to in her comments, the creation of an independent entity of some kind, which could make it possible for the US government to support these kinds of activities that it chose to support for its own reasons.  And if they were proposed locally and supported by the US government for each reason at arms length through this entity, it seems to me one could go someway at least toward addressing this variety of concerns. 

Tensions are always tough.  Dilemmas are ever-present.  It reminds me of Harry Truman, who asked for a one-armed economist, because people were always saying “on the other hand.” 

 Emily Vargas-Baron:  I think that we have to look at relationship between the civil society and state, and international assistance as a complimentary and supplementary one.  At no point did we attempt to advocate a non-state approach.  And, indeed, beneath a strategic planning approach within a country that is fully participatory is the essential and necessary linkage to government. 

And indeed in all of our work, three of us, we have always seen that as being one of the ends amongst many of working with civil society organizations to assist them in working with local government, provincial government and national government.  Consequently I am tempted to go into a lot of the nitty-gritty of some of the points that were made but, I think in general, I think it is important to see that we are not trying to suggest that there is total dichotomy or an attempt to say one will be better than the other, but rather where can we come from, where can we supplement. 

On the issue of figures, no we were not trying to do an exhaustive study of investment by the United States government abroad in civil society.  Indeed, we have in the room a person who attempted to do some of that, in looking at where have we invested in universities, in foreign assistance. Let me tell you, it is a bottomless pit of problems.  It has to do with coding within the agencies and it is not easy.  We actually came up with some figures but it is not really fully representative. 

Furthermore, what are we talking about?  There is USAID.  [Audio skipped, indiscernible] we have investment in civil society in the State Department, out of the White House, in the Department of Defense, out of Treasury, out of USDA, with our Global Food for Education, and other types of programs.  They are in conjunction with the World Food Program.  So we would be hard-pressed to find all the civil society organizations. 

Furthermore, you unpack it and you look at contracting, and with American development firms and NGOs, and they have a tiny portion of their funding of a large huge umbrella program will be for payments to a few CSOs here and there.  But is there a policy?  Is there a strategy?  Is it adding up to anything?  No.  Does anybody ever know about it?  No.  So what we are trying to do is say, “This is something to take out, and take a really good look at, and consider as a viable approach that is complimentary for purposes of international assistance at this time, when we desperately need some new approaches for foreign policy in the United States.” 

Yes, there is a tension between foreign assistance and local ownership, but if certain processes are followed where there is a high level of participation, much of that tension disappears.  I have lived it myself in national policy planning in various countries in Africa, Latin America, other regions, and where you can see very clearly that if participatory processes are followed, the tension melts away, because there is that building of local ownership necessarily through the process. 

The issue of whether one has a trade-off of investments in girls and women’s education or in more male-oriented… I would imagine you were thinking of ex-combatants, or whatever, we are oftentimes women and oftentimes children, but, you know, presupposing that existed, the answer is, of course, no.  You have to do both and other things.  But there is one bottom line and that is that you have to have [indiscernible] social control.  And there must be a rule of law.  Slowly but surely it has evolve to that.  It does not mean central control.  That does not mean necessarily a strong central government, but it does mean a fair and just system, one where there is representation and where there is participation.  If UN looks at that, then it no longer becomes an either-or, but a both-and.

And the question is one of relative amounts of funding and priorities.  And then the great importance of focusing, I think, within this area, on building a dialogue, cannot be understated.  I hope that today we are beginning that dialogue.  I think it is terribly important, and many of you here who have very key positions in your organizations and who are working within the UN system, as well as within United States government, I hope you will take this forward and continue this dialogue along with us.  Because we are all exploring this very virgin territory where so much work needs to be done. 

 John Sullivan:  I just really want to make a quick comment.  I feel like I am shifting allegiances here from commentator to, certainly not author, but sympathizer, and put my name on the back cover, or something.  But since I did use to work in ICEG, I do not think they gave you their best answer to your point on terror.  And I would like to give you just a little bit better answer very quickly.  And that is that link is not with deprivation.  The link is political.  It is ideas. 

And Barrington Moore and the social origins of dictatorship and democracy, looking at the Bolsheviks [sounds like], you find the same kind of process in all these places.  These are highly educated, alienated people who are locked out of repressive systems and see no hope for change.  And they lash out.  So, big surprise. 

Now Abimael Guzman recruited a bunch of people in the Shining Path who were poor and uneducated, but Abimael Guzman is a professor of philosophy.  I mean, most of the leadership of these places, Osama Bin Laden is a wealthy [indiscernible].  He certainly did not get into this because he did not have enough lunch money.  He got into it because he had a political agenda. And it is not any civil society organization that is going to after that kind of thing.  If somebody wants some ideas, ideas have consequences, and if you go into this kind of struggle with no ideas, you are not going to win.  And unfortunately, we are going in with a lot of rather general statements in places like Iraq, about the virtues of participation, but with not really hard-edged ideas that Iraqis articulate. 

That is the political battle and that is where the civil society in Iraq has got to engage.  And how do we find them?  This is an answer to Vance’s very good point, and I think this is something that you probably should put in your article.  It is maybe a little bit overstated here.  Not every civil society organization should line up for some of this money.  There is a whole lot of them out there that you do not want to support, particularly [indiscernible].  You maybe want to reform them, but you do not want to support them. 

What we need are talent scouts.  I mean, why do you have a farm club system in baseball?  Why do football clubs hire talent scouts?  We do not really do that.  We do not have anybody that goes out and says okay, how do I know Hernando De Soto is there?  Why do we not use Hernando to help become a talent scout, to find some others?  Now, we are not coming up with a 150 Hernando De Sotos but we may come up with 150 Carlos Desparadels.  People that can articulate, know how to communicate, can be trained, can be equipped to fight this war of ideas.  That is where we need the civil society focus.

 Vance Serchuk:  Brief comment by Lawrence.

 A. Lawrence Chickering:  I wanted to make a comment about the very common observation that there is a tension between strategic foreign assistance in local ownership.  That comment really makes the assumption that it is in our strategic interests, and our essential purpose is to go and push American values on other people and it will come up against their resistance to them.  Our observations, I think, our belief, and my work in a variety of areas, really come from a different place.  It is that these are not American values, these are universal values.  And that if you provide spaces for people in other countries to express them, they will express them and they will determine what they want to do for their societies, and it will end up very much aligned with what our strategic interest is.

 Vance Serchuk:  Thanks Lawrence.  Enough jousting [indiscernible] our panelists.  We will now move to questions.  The three rules for AEI, please wait for the microphone.  Second is, please state your name and affiliation and third is, please put your statement in the form of a question that we can respond to it.  Just raise your hands if you have questions.  There on the back, wait for the microphone.

 Male Voice:  Hi.  My name is Jeff [indiscernible] from Fund for Peace.  We do a lot of work on weak and failing states.  And I guess my question would be to bring the discussion back to the context of fighting terrorism in a weak and failing state, and moving away from talking just about civil society to foreign aid that is given to things like poor security, dealing with ungoverned zones, something like the [indiscernible] initiative.  And how that can be … I guess I do not know what the total question is, but how does that relate into this scheme of foreign aid in fighting terrorism, aid given to the military versus more economic civil society, and stuff.

 P. Edward Haley:  I’ll throw it back to you, you better ask  more precise questions.

 Vance Serchuk:  Maybe, perhaps what we can do instead, is what do we not take two or three questions and then we will have an opportunity to answer a couple of them.  We get panelists to choose because we are running short on time.  There is a question on the back over there?

 Bob McClusky:  Thank you.  Bob McClusky, independent consultant.  This question stems from some comments you made, John.  It seemed to me, from what I experienced when I was with AID, that as Russia merged from its turmoil, they did not have any laws with regard to 501C3s or what have you.  So they had to start from scratch.  And now you are saying that, in fact, what Putin is doing is trying to put a lid on that. 

And Emily is saying that, you build local ownership and that is going to dissipate the hostility.  So my question here is, can you help us sort play this one out, in light of what the theme is of the book, and what you have been seeing on the ground, in what Putin is doing or trying to do.

 Vance Serchuk:  Thanks.  Why do we not take one final question, then we will go back to the panel.  We got one in fourth to the front.

 Nancy Burdick:  I’m Nancy Burdyke [sounds like], Search for Common Ground.  And I wanted to ask, first of all the title of this was, “Can foreign aid defeat terrorism?”  So I wanted to ask it in a broader sense, foreign aid not just US foreign aid, but what about international efforts, and what about coordinating some of these work? 

Stewart said a bit tongue-and-cheek that maybe some of the work should be covert because it may be a kiss of death to have us working on it.  But what about an overall comprehensive strategy, being an international organization, even one of the UN ones that exist or creating a new one with the EU, Japan et cetera, to do that so we have an even better chance in working with the local people and the local government with the national governments, of actually filling the gaps and actually assisting them in the way they need assisting over-all?

 Emily Vargas-Baron:  With regard to the first or the second question, the first one I was not quite sure what you want with border security there.  But really back to one side, and we can talk later.  To Bob McClusky, boy is that a difficult one. I have not been working in Russia, but I have been working in Belarus.  And the same thing is happening in Belarus, but can you work with CSOs in Belarus?  Yes, of course you can. 

And are we good at it?  Of course, we are not there.  But people are working there, like UNICEF and some of the other UN related organizations.   And are they successful in working with CSOs?  Yes.  Are they also successful in working with the government up to the point where they can get money moving through the government?  Yes.  It is extremely interesting to see the rich array of really excellent programs that are going on in Belarus in certain fields. 

This is not on the press but it is there.  Can we work with that type of situation?  Yes.  But are we going to have a problem of increasing clamp-down in certain former Soviet nations with regard to the civil societies?  Yes, if there is a continuing attempt on the part of certain groups to work on major governmental overthrow themes, and there are a whole range of themes.  And that is always going to be a tension, whether you are talking about those countries, or you are talking about Iran, or you are talking about Columbia, or you are talking about Sudan, you are going to be running in to that issue. 

There are approaches for handling this.  I am just simply saying that is going to continue to be something that we have to pay special attention to.  With regard to the question from the lady from Search for Common Ground, without question, it behooves us to work closely with specific international organizations, especially certain specialized agencies of the UN system, in working on several of these topics because the civil society organizations oftentimes are working with those organizations.  They have a depth of experience and knowledge.  They have done some of the tracking, some of the identifying of who’s who.  They know who functions well and who comes through, who is transparent, who is accountable. 

Also one can imagine various types of partnerships.  In some instances some of the finest programming is being done right now by UNICEF, for example, in the area of integrated programming.  To replace that would be foolish, not to use the partnership and the strengths of the civil society organization there would be an error.  So one can imagine various types of collaborations and agreements over time.  But that was our strategic and methodological approaches, and I think that we are still at the level of general discussion at this point.  But I think that is a very important point and one we want to take into account.

 P. Edward Haley:  Thanks, and I would like to also address the Common Ground person whom I met before lunch and I am having a senior moment about name, forgive me.  What I thought, as Emily said, we are not there yet but it did occur to me that some criteria can be identified that would provide grounds for cooperation, congruence of objectives, unique expertise that is not available somewhere else, or is complimentary.  Expertise is complimentary.  These are questions one might ask in addressing cooperation.  Thirdly, do you make genuine gains in scale by… can you broaden up a project within a country or tackle a region, as a consequence of cooperation? 

And finally, do you make gains and accessibility, access, as a consequence of coming under the imprimatur of a consortium or a UN body, and perhaps there are several other tests that one would make before making the decision.  But with Emily I think we are wide open to that idea and would want only to raise these kinds of questions.

 Emily Vargas-Baron:  One little addition to that that I forgot to mention.  Tragically, when I go to countries in various world areas I will often find that our USAID missions and state department programs are working in sublime isolation, tragically, from the civil society organizations that really are doing exciting work on the ground.  They are also very marginalized from the World Bank, from UNICEF, from a variety of UNDP types of programs. 

We are losing opportunities.  There are missed opportunities.  And with, I think, very diplomatic approaches, we could embrace specific programs in specific countries under a country strategy that would enable us to maximize on the investments of the American people, and that would provide a far greater return, and a creation again of the relationships of trust and of friendship, rebuild our friendship with many countries in the world.  So I think that we really need to work on this and find the right paths for doing it.

 Stewart Patrick:  I just wanted to pick up on that and express my strong agreement on a number of problems with the way USAID operates, and not necessarily for its own volition.  But one of them is this failure to actually engage in coherent donor wide policies and programs and to fund those rather than just continually creating its own sort of stovepipe policies.  I mean obviously there are political differences in particular countries that would make it impossible, but in most cases I just do not think we take advantage of that sort of leverage as much as might. 

The other thing is that, just in terms of funding civil society organizations, so much of US foreign assistance, ODA, is tied aid.  I mean the United States actually has I think 77 percent of its aid that is tied, where as number of other donors have gotten rid of that policy so it does not have to be made in the UK, as it were.  I think that moving in that direction could really pay some serious dividends in terms of funding civil society organization.

 Vance Serchuk:  Let us take few, final questions.  We have one on the front and then one on the corner.

 Eleanor Lokame: Thank you this is a great seminar.  My name is Eleanor Lokame [phonetic] and I am with the World Innovation Network, and I wanted to address this issue about education of girls.  You had mentioned about choosing between having national police or having girls educated.  If you ever felt the need for that kind of a false trade-off, you could simply educate the girls to become the national police. 

More on that, and I was in Afghanistan and leading a seminar on leadership for the women of Afghanistan.  It seemed to me the problem you point to is real about undermining the local government there, but the problem was not because the money was going to educate girls, the problem was because the US was giving pay-offs to local war lords who then undermine the Karzai presidency.  So we are covering our bases in case Karzai fell, but it was creating power centers outside of Kabul that made it difficult for the national state to really be strengthened. 

So your point is correct but a little reorientation of direction of the problem, I think, would focus it more realistically.  But it seems to me from my experience, one of the major problems is the education of boys in these Madrasas, and the schools that train them to hate the West, to hate the US and to kill us.  And to kill us is an honorable thing.  And it seems to me, given that training to hate and the training to kill us, if we really want to get that, the war of ideas versus the war of bullets, does it not then, and here is my question.  Is it not one of the most important things we could do, to educate girls and educate women who are raising these kids so they have another source of learning and reading outside of the Madrasas?  Which then creates the framework for discussing across ideological and religious lines and that is really essential for us to be winning the war on terrorism, is to educate girls and women.

 [Indiscernible]:  India Globe and Asia Today.  My question is that US is giving away billions of dollars to help the poor and maybe around the globe in order to win their hearts and to educate them.  The question is that, have we reached that point that or have we won the hatred hearts against the United States here and also we still live under the fear of terrorism here. And is that aid working like she said that we have to educate the people, especially in the Muslim and Arab countries so that we can live in peace.

 Vance Serchuk:  Thank you.  Why do we not do this.  Actually, let us take one final question.  I’m seeing few hands up simultaneously, which is always one way to get the attention of the moderator.

 Frank Dull:  My name is Frank Dull.  I work for Creative Associates and a compadre of Emily here.  I spent many years in UNICEF so I am very pleased that you lauded UNICEF.  I was at the Tobias meeting yesterday, and I was listening to everything that was going on.  The question that you asked, of course, which the title of the seminar, is an important question.  Tobias, I think, put it on the table, that $27.5 billion was available if you add up all of the foreign assistance, right across the board, USAID included. 

The sort of big question I have and I think a lot of people had yesterday, but did not have the chance to ask it, because it was not very interactive, was basically, how is that going to be  apportioned out?  Who makes the decisions in apportioning that out because that is going to be crucial?  And how much of that will ever go to civil society, in the sorts of things that you are suggesting? 

I have not read your book but I would say, “Probably the book is a good primer,” not a premier as you say because it is not spelled that way, it is a primer.  I have an argument with USAID over this all the time.  And it would be a very good primer, probably for that whole new framework that we are talking about, to which I contributed. 

We recently did a series of case studies for USAID on fragile states, to try and work out what fragility was and how that would affect service delivery.  And I think on civic groups we came to the conclusion that at different stages in any emergency or any reconstruction, or if we take these states as being at different stages in the development, or whatever it is they are coming out of, at the initial stages, the tendency is to want to work with civic groups because civic groups can give you action where there is no action. 

We go straight to Patrick’s comment which is, that most states that we work with are not states.  And if we could only get them working, we could probably do away with 2/3 of what we are looking at because they nearly all-fragile states, and nearly all chronic.  I mean, those of us have been working in development as long as I have in many different countries, 110 I think to date now, will say that probably, more that 80 percent of those 110 fragile states and they have been fragile forever, why are we suddenly discovering them as fragile states?  But basically what I am saying is they are fragile states because nothing ever works. 

And then I also went into Iraq, unfortunately, and design the educational system post this emergency and led the way in.  And I can remember walking into the ministry with the bunch of friends and new colleagues walking in there with me.  And my saying, “We have to approach this very diplomatically and very carefully because I know these people and we can get them working for us if we approach them correctly.” 

The first thing I heard was, “Who the are the Baathists, and who were not the Baathists,” let us sort them out. As soon as we said that, we lost the whole ministry because everybody disappeared.  But basically, we did also did not understand and nobody listened to the fact that fragility has a historical dimension.  And if we go back to Iraq at the turn of the last century and we see what the British had to contend with, and how they did it, we probably did it exactly the way they did it and they were not very successful.  And they had not learned from Turkish history before, about what was going on Iraq.  And we certainly did not learn from British history and anything that went before. 

What I am trying to say is that, fragility is not just something we just discovered, it has a dimension, the dimension is cultural and historical.  And if we do not look at all of these things, and try and come up with some solution that takes all of that into consideration, we are just going right back to square one again, and I think, will fall over ourselves. 

What we have here at the moment as I think in an interesting moment because we are in transition is a series of paradigms that do not fit, paradigms that are all knocking against each other.  And they are security paradigms, foreign policy paradigms, developmental paradigms and they do not seem to want to take in consideration the lessons learned from what went on before and I think we got to go back into history. 

We got to learn what went wrong before.  If do not, we are only going to do it again.  My worry is that we might doing it again very shortly and I hope we do not get at some point.

 Vance Serchuk:  Thank you, why do we not wrap up this way? Since the number of questions that have been put forward, rather than asking the panelists to address them specifically, why do we not just go down the row, beginning with Stewart, and if you like to respond to particular question, you can.  Alternatively, if you like to sort of frame your response in terms of anything including comments you like to make, that is also fine, and you can also just pass. 

 John Sullivan:  Just one point on the question on Putin, I took you to mean, is not Putin local?  So we have here  a local battle between two different groups with Putin wanting to be in-charge, stay in charge, and he is not really interested in a lot of other people’s opinions about that issue.  So he is doing whatever he can to clamp down on the voices of dissent.  So how do you sort that out?  Well, I think one of the things you have to do in any kind of situation, whether it is Russia, Afghanistan, Iraq, and I do sympathize with the points you made about Iraq, I have been there as well. 

The situation is simply that you have got to just try to assess each country differently, you have got to find who the people are in that country, as Lawry said, who have the kind of values that they are trying to build a society.   And you find them in some very curious places. 

The answer to your question on Putin turns out to be Yevgeny Primakov, which would not be a logical conclusion, since you know he is the former Soviet KGB spy master.  But he has re-invented himself, and he is now the head of the Russian Chamber and champion of small business, which I take as a testimony that the power of incentives can transform people into advancing very different points of view.  And so Yevgeny Primakov now is battling with Putin for the freedom of expression of the Russian Chamber and we are trying to help him out. 

So I think that is the kind of the answer, I could go on and on and on in a much more formal academic way but the little vignette works better. 

 Emily Vargas-Baron:  The issue of finding people in other countries is a non-issue.  In every country I have worked in, I have been able to find truly outstanding national specialists, leaders, disinterested people, deeply committed to their countries, and courageous, their stories rarely told.  And they are rarely asked to participate.  We have opportunities and we certainly have big resources to be able to begin such a process.  I am working amongst various countries right now in the Central African Republic and I went there thinking I would find very few people who would be true leaders within their country and capable of developing programs. 

I was totally wrong and I was delighted to find that I was wrong when I found some of the most sophisticated questions about policy planning were posed by the Central Africans, more sophisticated than many others in other countries.  And they were trying to figure it out how to maximize on their resources that were so scarce.  I think that the provision of efforts to find such people is very important.

One person spoke to the importance of overcoming the role of the Madrasas and training to hate.  My experience has been in working with a series of very innovative Madrasa leaders, Imams and Marabus [sounds like], who are developing new forms of teaching and learning that are active learning methodologies, where they want to teach Mathematics and Science.  And they are beginning that new synthesis after what could be called the extremes of the revitalization movement.  And we see this emerging. 

Are we supporting such people?  No.  We need to find and work with such people.  They are making these changes, their new synthesis, their new approach now at this time in countries through out North Africa, extending all the way to Indonesia.  And some of them are very large networks like Madrasa, early childhood development network out of Kenya, in Tanzania and Zanzibar. 

The issue for meeting with Frank’s superb intervention with regard to the importance of historicity is really telling.  We need desperately at this point to begin to unpack the past periods and what has happened.  I have a friend working right now on the corsairs [sounds like] that covers, reaching into the Syrian and Iraqi area, in the 17th centuries. It is going to be a very definitive historical piece.  I told him it is the same thing we are seeing today.  And these are cultural traditions. 

We need to learn how to work within certain types of cultural traditions in order to be effective, and at the same time we need new approaches, Frank.  It is not possible for us to continue handling foreign aid by means of earmarks that are pressured from the center and [indiscernible]to Congress and then come back out into the foreign aid agencies that tell us how to spend the money in the countries. 

We need to be able to develop programs that have strategic plans, country by country, take into account historical aspects that conduct complete resource analysis.  Everything from training through to human resources that work on truly identifying and analyzing problems and needs, and that have full policy analysis conducted by people of the countries with some help with process.  And then building on that and working very fast, ensuring that those points that are identified as being priority ones for investment are worth moving forward.  Yes, mainly into civil society but also with states at all levels, local, provincial, national to be able to achieve a new kind of foreign assistance that is much more nuanced, much more generous and open, participatory, and I hope in the end, more successful. 

 P. Edward Haley:  A very brief comment, Vance, about Madrasa education of boys as a boy.  I am fully aware of our destructive contribution in many of these circumstances.  I have a colleague in Claremont, Tahir Andrabi [sounds like], who with a friend has began a major study of Pakistani education for the World Bank, equivalent they hope of… several years ago the Indian government did a similar study of Indian education. 

One of Tahir’s findings is extremely interesting.  He says about one percent of children in Pakistan are in Madrasas, and that the growth of childhood education is not in Madrasas, but in private schools that parents are sacrificing terrifically to send their children to private schools.  So one of the things we can address is to try to identify stereotypes that we might have incorporated into our minds and address them with data where we can find it and studies where we cannot find it.  My discussions  with Tahir have been extremely illuminating.

 A. Lawrence Chickering:  Before I make my final comments, I wanted to thank our commentators John and Stewart for very interesting comments, and especially I wanted to thank Vance for really organizing all of this.  I think this has really been a magnificent thing and Vance I am really in your debt.  I had a couple of final sort of thoughts to share.  Broadly, to be strategic, interventions, initiatives need to be operated at scale.  Many of the things that we are currently doing abroad are not being done at scale.  They are being done in the series of pilot projects that really are very little more than lotteries, which confer huge benefits on small numbers of people lucky enough to be in them. 

     The challenge of operating strategically is fundamentally a challenge of transferring the lessons from these highly successful programs to governments and encouraging governments to change.  Now I realize… I was in Karachi, a couple of years ago, and I was talking to some people from a very celebrated NGO there, the Irangi Project [sounds like].  And I asked this woman, if she would ever consider working with government schools or working with government, and before she answered, there was a long pause and she just looked at me as if I had lost my mind.  And the truth is that most people in the NGO cultures abroad and, in a sense, oddly, in this country, political liberals, like the government, abstractly like a mythical government, but cannot stand actual governance, the way they operate, I do not want to go anywhere near them. 

The truth is, to get anything done strategically, to have any impact we have to learn how to work with governments.  I have found in the work that I done now in two states in India, working under agreements with these states where they are paying all the costs of implementation.  They are paying… roughly more than 90 percent of the costs of our program are being paid for by the governments there.  And the number will go way up as when we really get to enormous scales on the girl’s education project in Rajasthan that most of the assumptions the people make about the capacity of governments to operate are false. 

Most of the theories and Nobel prizes that have been given about why they cannot work are false.  The people in governments want to be able to work productively but they are completely disempowered in many