Postcommunist Aid Negotiation A Review of Recent Research

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Postcommunist aid negotiation: a review of recent

research
David Lehrer & Anna Korhonen
To cite this article: David Lehrer & Anna Korhonen (2004) Postcommunist aid negotiation:
a review of recent research, Cambridge Review of International Affairs, 17:3, 593-616, DOI:
10.1080/0955757042000298192
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Cambridge Review of International Affairs,
Volume 17, Number 3, October 2004
Postcommunist Aid Negotiation: A Review of Recent

Research
David Lehrer and Anna Korhonen1

Aleksanteri Institute (Finnish Centre for Russian and East European Studies),
University of Helsinki
Abstract The essay synthesises ‘stylised prescriptions’ from review of recent research
on interactions of postcommunist countries and the West since 1989. The essay
considers aid negotiation by postcommunist recipients and multilateral and bilateral
donors in economic reform, democratisation, civil society development, environmental
policy, the social sector and science and education, and the effects of East–West
interactions on those of postcommunist countries with each other. Drawing on concepts
from the study of international negotiations, and on research on postcommunist
countries by scholars from social science and policy disciplines in the US, EU and
Russia, the essay builds on a dialogue that began during the second Aleksanteri Seminar
organised in 2002 by the Aleksanteri Institute in Helsinki. This scholarly dialogue
proposes greater attention in transitological debates to the interactive process of aid
negotiation, to ‘donor congestion’ in the postcommunist space, and to its (intended and
unintended) effects.
An historical account of ‘postcommunism’ or the ‘triple transition’ (Offe 1996a)

that failed to mention international intervention would be difficult to write: Even
the most remote or isolationist of the postcommunist countries have not been
untouched by external actors since 1989. Scholars have argued that international
and supranational actors serve as new democracies’ ‘ultimate guarantors’ (Offe
2001), that interventions by outside actors have become partly constitutive of
particular national and ethnic identities (Korhonen 2004; Smith 2002), and that
1
The authors acknowledge the substantial aid the essay has received from the scholars
and practitioners cited in the text, as well as the institutional and financial support of the
Aleksanteri Institute and the German Marshall Fund of the United States. The authors
wish to thank all those who commented on and assisted with this essay, including Risto
Alapuro and attendees of the sociology seminar of Risto Eräsaari and Arto Noro in the
University of Helsinki; participants in the Russian and East European studies seminar led
by Markku Kivinen in the Aleksanteri Institute; Gerd Grözinger, Peter Kraus and
participants in the political sociology colloquium of Claus Offe in the Humboldt-Univer-
sität in Berlin; Kristian Gerner and participants in the Nordic Academy for Advanced
Study (NorFA) workshop on Identities in Transition led by Ilkka Liikanen in Tallinn;
Ana-Maria Vasiliu; Eugénia da Conceição-Heldt; Roxane Farmanfarmaian and the editors
of CRIA; two anonymous reviewers; and Tron Harald Torneby, Lars Ove Gidske and
Mari Bræck of the Faculty of Social Sciences of the University of Oslo. All errors,
omissions, and opinions expressed remain the authors’ own.
ISSN 0955-7571 print/ISSN 1474-449X online/04/030593-24 © 2004 Centre of International Studies

DOI: 10.1080/0955757042000298192
594 David Lehrer and Anna Korhonen
some postcommunist countries relied on official aid amounting to nearly a

quarter of their gross national products during the 1990s (Lane 2003).2
Much of this interaction between ‘Western’ and postcommunist ‘Eastern’3
countries since 1989, and between international institutions and postcommunist
countries, can be called ‘aid’4, and can be considered as parallel and interlocking
series of two-way negotiations. Negotiations succeed on the principle of meeting
one’s own interests by addressing those of the other, and when interests of third
parties likely to be affected have been incorporated. Negotiations fail when
neither side is satisfied with the result, or when one side is satisfied and the
other indifferent. In the complex, iterated negotiations of postcommunism, both
when goals of Western and Eastern partners have diverged and when they have
coincided, there has been growing agreement that donor and recipient5 goals
have not been met (Campos and Coricelli 2002; Black et al. 2000), and that those
undertaken have been the wrong ones (Stiglitz 2001). East–West interaction since
1989 has focused on effecting change in the East, if not on the East’s outright
adoption of Western models and practices. Giving and receiving aid is not a
unidirectional interaction, however, and rarely have recipients played the role
only of passive partner, authentic interlocutor, or innocent victim.
The ‘transitologic’ debate began the 1990s contesting what the aims and
methods of transition should be. Following the uneven, often tragic, outcomes
in the postcommunist countries, the question for social scientists and policy
analysts shifted to why transition has not gone as planned. The scholarly
dialogue from which the present essay proceeds seeks to extend the debate
2
For many in postcommunist countries, the European Union has become an orienting
point for national reform and individual aspiration. It must be noted, however, that
‘accession’ is not synonymous with ‘postcommunism’ or ‘transition’. Most of the 29
postcommunist countries (Albania, Armenia, Azerbaijan, Belarus, Bosnia & Herzegovina,
Bulgaria, Croatia, Czech Republic, Estonia, Germany, Hungary, Kazakhstan, Kyrgyz
Republic, Latvia, Lithuania, Macedonia, Moldova, Mongolia, Poland, Romania, Russia,
Serbia, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan) have no
immediate plans for EU membership.
3
Conflating multilateral institutions with an imagined ‘West’ (O’Hagan 2002) is not
straightforward, nor is identification of aid donors with the ‘West’ and aid recipients with
the postcommunist ‘East’—particularly since the real and metaphoric walls and curtains
separating ‘West’ and ‘East’ have been removed, and when donors active in postcommu-
nist countries include not only ‘non-Western’ World Bank and Asian Development Bank
contributors but also bilateral donors (e.g. the Turkish International Development
Agency) (Kiniklioglu 2004) whose inclusion in the ‘West’ has been contested. During few
periods have ‘West’ and ‘East’ undergone change as great as that since 1989 (Sztompka
1996; Alapuro et al. 2004, Schmitter and Karl 1994). Yet this hemispheric bifurcation may
nonetheless situate aid interactions with postcommunist country recipients vis-à-vis other
donor-recipient interactions commonly imagined as ‘North’-‘South’.
4
We here define ‘aid’ broadly to include Western interventions for which effecting
change and promoting welfare in postcommunist countries has been a primary stated
goal: not only official ‘aid’ (or ‘assistance’) as defined by multilateral institutions (OECD
2004), but also policy advice, peacekeeping, some forms of diplomacy, and civil society
mobilisation. Aid might originate in the official sector, in civil society or religious
institutions, or in the private sector, and might be targeted to any of these sectors in
recipient societies.
5
‘Donor’ and ‘recipient’ here refer to the direction of aid and advice flows since 1989,
although aid does not constitute the totality of interactions between the West and
postcommunist countries, and despite some ‘recipient’ countries such as Poland and
Estonia having also become ‘donors’.
Postcommunist Aid Negotiation 595
toward a largely empirical, compound question: What was ‘transition’ (or

‘transformation’) after all, and what have its actual consequences been? The
essay asks what might be learned from what happened, and seeks answers first
by reviewing the debate on ‘transition’ and then by considering new empirical
research on donor-recipient interactions, using concepts from negotiation analy-
sis (Raiffa et al. 2003; Kremenyuk 1991) to extract ‘stylised prescriptions’ for aid
donors in postcommunist countries. While Cold War interactions between West
and East spurred development of game theory and other modes of strategic
analysis (Schelling 1960; Brams 1985; Stone 2001), attempts to extract the lessons
of multi-layered East–West negotiations since the Berlin Wall was dismantled
have been limited (US GAO 2000).
The essay considers aid processes before aid outcomes. Rather than donor
interests and conditions, it focuses on donor-recipient relations and interactions in
one set of countries over a decade-and-a-half, taking a ‘micro’ perspective on aid
cooperation, incentive and decision mechanisms in which actors and actions at
the operational, ‘implementation’ level are as often the subject as those at the
level of policy, planning or advice.6 It does not meet Hellman’s (1998a) challenge
to undertake cross-country empirical research on transition outcomes, nor does
it seek the generally applicable laws of engineering or ‘stylised facts’ with which
economists opened the transitologic debate (Åslund et al. 1996; Sachs and Lipton
1997). Instead the essay distils local generalisations at a meso-theoretic level
from linked analyses of particular cases of the relational and interactive pro-
cesses that have engaged donors and recipients—generalisations, and prescrip-
tions, that may be of use to donors entering future aid negotiations. The
concluding section considers actual and potential effects of the structure of
donor-recipient interactions in various sectors.
The essay reviews ten ‘lessons to be learnt’7 for donors, drawn from research
across social science and policy disciplines, introduced during the second
Aleksanteri Seminar8 in Helsinki in 2002, and elaborated in the book Western Aid
in Postcommunism: Effects and Side-Effects (Korhonen and Lehrer, forthcoming)9,
of which the present essay constitutes a report and call for comment. The lessons
focus on what has gone wrong with aid processes rather than on what has been
achieved, and on specific aspects of the donor-recipient interaction that might be
improved rather than on evaluation of the aggregate outcomes of aid since 1989.
This necessarily means focusing on the ‘darker side’ of aid, while seeking neither
6
It departs from dependency theory (Evans 1979) in attending not only to economic
policies and aggregate effects of foreign actors on recipient countries (Stallings 1992), but
also to specific aid encounters.
7
The essay does not critique the technocratic discourse of multilateral and bilateral
donors or international advisors, but employs the terms of this discourse in its analysis
of donor-recipient interaction. The essay refers to the empirical generalisations below as
‘lessons’ or ‘lessons learnt’—terms bespeaking efficiency, rationality, progress, and
growth—eliding the fact that these ‘lessons’ largely have not been, and may not be,
learned.
8
The Aleksanteri Institute (Finnish Centre for Russian and East European Studies)
was founded at the University of Helsinki in 1996 as a national centre for the study of
Russia and other countries of the former Soviet bloc. The Aleksanteri Seminar (now the
Aleksanteri Conference) annually invites scholars, government officials, policy analysts,
and civil society activists to discuss an issue of scientific and social relevance.
9
Abbreviated below as WAP.
to articulate a reactionary view of reform in which ‘everything backfires’

(Hirschman 1991) nor to fall prey to ‘the seductive, often apparently irresistible,
charms of pessimism’ (Krygier 1999) that students of postcommunism face. The
more salutary effects of cross-border flows of people, money, and ideas remain,
however, to be limned in another context.
An Empirical Turn
While debate on postcommunist transformation began with conflicts among
archetypal reform ‘models’ such as ‘markets’ vs. ‘central planning’, ‘Europe’ vs.
‘non-Europe’ and ‘West’ vs. ‘East’, a decade-and-a-half of postcommunist aid
experience has generated sufficient data on the aid process (and its effects) to
render aid negotiation fertile ground for investigation and analysis, and also of
importance to debates on democratisation, European integration, transatlantic
cooperation, economic development and nation building.
The mainstreams of these debates have themselves begun to acknowledge
the limited usefulness of the reified, ideal-typical concepts of ‘market’ or
‘democracy’ that have anchored much of the social science and policy discourses
on postcommunist countries (Przeworski 1991), and that have largely consti-
tuted those discourses more generally during the postcommunist period
(Smelser 2001). In the early 1990s, donor agencies, recipient governments and
international advisors turned to the social sciences for ‘models’ of what success-
ful postcommunist countries might eventually become, privileging macroeco-
nomic ‘models’, interventions and outcomes (Lehrer 2003). Many supposed that
if the right ‘model’ (of a postcommunist country, and of Western intervention)
could be synthesised from the ‘stylised facts’ of economics, then a successful
‘transition’ to an expanded West could be effected in a few years (Murrell 1995;
Blinder 1992). Early transition debates centred on whether these ‘models’ should
be transferred via ‘gradualism’ or ‘shock therapy’ (Sachs 1993; Åslund 1990,
1995).
When economics failed to predict (actual) or to eventuate (desired) transition
outcomes—or to explain what went wrong—economists blamed postcommunist
countries’ failures to instantiate abstract ‘models’ of market economy on ‘straw
men’ from neighbouring disciplines. Policymakers’ failure to liberalise, privatise
and marketise economies was thus attributed to ‘politics’ (Williamson and
Haggard 1994; Przeworski 1991); the failure of even those Western-prescribed
policies that were implemented to have their intended effects was attributed to
lacunæ in the ‘rule of law’ (Kennedy 2003; Sachs and Pistor 1997). Political
scientists, in turn, took economists to task for failing to account either for new
interests and cleavages consolidating around (wholly or partially) reformed
economic structures (where reforms were attempted) (Hellman 1998b), or for
interests that emerged during the advisory process itself (Ioniţă and Muntean
2004). In countries in which reforms were stillborn or ineffectual, political
scientists blamed ‘history’, or ‘path dependency’ (Ekiert 1999; Beyer and Wiel-
gohs 2001). Sociologists and anthropologists have blamed transition’s unexpec-
ted and divergent outcomes on Marriott Brigade advisors (lawyers and
economists) (Wedel 2001); these ‘technopols’ (Williamson 1992), in turn, have
blamed ‘geography’ (Sachs 1999; Kopstein and Reilly 2001). Fifteen years may be
early yet for historians or philosophers to point fingers.
The transitologic literature has turned away from reform prescriptions and
post hoc explanations based largely on neoclassical economic theory (Seliger
2002), via expanded donor focus on ‘social capital’, ‘sustainability’, ‘governance’
and ‘institutions’; attention by economists themselves to relationships between
legacy institutional configurations and economic growth (Rodrik et al. 2002;
North 1990) and to constraints on growth due to the diffuse agency chains of
reformed institutions (Stiglitz 1999, 2001); and an acknowledgement of the roles
of civil society and the private sector in reform that has supplanted inordinate
attention to Western advisors and recipient central governments as authors and
implementers of economic policy (and thereby of transition). The turn from
economic-market and democratic-political ‘models’ toward comparative empiri-
cal research into ongoing reform processes (Anderson et al. 2001), and into the
complex, multi-party interactions that shape those processes, is reflected in the
call by Davis and Dombrowski (2000) to unravel ‘the empirical mystery of how,
and how much, external donors have influenced postcommunist transitions’ and
by Cooley (2003) to compare the relative efficacy of major ‘external actors’ in
postcommunist transformations.
While it is a truism that parties enter negotiations with distinct sets of
interests (Raiffa 1985; Sebenius 1983), which may change over time (Cross 1996),
but which each party seeks to promote through agreement, the research re-
viewed below suggests that attention to the complexity and interconnection
(Conconi and Perroni 2001) of postcommunist donor-recipient interactions
(rather than only to discrete projects, countries and donors) may expose patholo-
gies and perverse effects of intent, interaction and outcome due to failure by all
parties to acknowledge the contexts and interrelations of distinct negotiations
and due to privileging of particular interests and interested groups at others’
expense.
The lessons below derive largely from missed opportunities of coordination,
information-sharing, and identification of complementary interests and appro-
priate beneficiaries. Aid negotiations present a dual cooperation problem: recipi-
ent groups compete to receive aid, and donors compete to dispense it. Donors
and recipients have been asymmetrical in power and scope, and coordination
within and between the two parties has been limited. Donors may attempt to
organise under joint ‘frameworks’ or through market-like competition, but
neither solves the problem of donor congestion: too many actors and interests
trafficking the aid negotiation space.
Certain themes and motifs emerge repeatedly across the sample of postcom-
munist interactions on which the lessons are based, as do commonalities and
differences with aid negotiations elsewhere. Had the lessons of prior aid experi-
ence in Latin America, South Asia, and Sub-Saharan Africa been more systemat-
ically transferred, perhaps some of the lost output, corruption, instability,
violence and trauma of the postcommunist experience might have been avoided.
Among the reasons for failure identified by earlier studies of aid effectiveness
are overriding donor focus on commercial and political motives; lack of sensi-
tivity to local circumstances; poor project design; the unfavourable political
situations of recipient countries; recipient governments’ tendency to favour
prestigious projects with little impact on development; weak recipient adminis-
tration and lack of interest in implementation; difficulties in finding matching
funding; and missed opportunities to learn from experience (Cassen et al.
1994)—all of which the lessons below reflect. Some of the lessons may be
applicable to other multilateral and bilateral aid negotiations. Others are more
specific to the players and sites of postcommunist transformation.
Lesson 1: Non-Cooperative Interest Definition May Fail Donor and Recipient

Alike
Aid priorities and ‘conditionalities’ depend on donor aims and interests rather
than on recipient requirements or anticipated outcomes, Davis and Dombrowski
(2000) assert in their analysis of US and European aid to postcommunist
countries. This analysis reflects the assumption that agreements are shaped by
each party’s exercise of its power relative to its negotiating counterparts; the
interests of the more powerful negotiator (the donor) will therefore dominate
agreements. Moreover, if the interests of the weaker (recipient) negotiating party
seem to dominate a negotiated agreement, it is only because this is ultimately in
the interest of the stronger party. Many have argued that development aid is
structured and allocated so as to promote donor interests, that the West sets
development agendas and guidelines for action, that donor discussions of
recipient interests are rhetorical postscripts to decisions self-interestedly
made…and that it was ever thus (Escobar 1995; Rist 1996).
While determining empirically the influence of donor and recipient interests
on aid outcomes would be difficult, donors do at times explicitly state that aid
is intended to promote their own interests. One stated purpose of Finnish
grant-funded environmental cooperation with Russia has been promotion of
Finnish environmental technology export, as Nina Häyrynen notes in ‘Multilat-
eral Environmental Cooperation and Learning: The St. Petersburg Water Sector’
(WAP). ‘Tying’ development aid to donor country equipment and service
providers, and expectations of ‘return flows’ of funds to donor economies, is
common. More than half of all EU Tacis10 funding has flowed to donor countries,
primarily to EU consultancies, as Timo Piirainen notes in ‘Technical Assistance
to Transition Countries in the Social Sector: Activities, Problems and Future
Prospects’ (WAP).
Recent research extends prior analyses of interests in aid agreements, by
looking not only at how agreements reflect interests, but also at how interests are
reflected in the outcomes of agreements once implemented. Outcomes of en-
vironmental aid agreements dominated by donor interests may systematically
fail to address either donors’ or recipients’ interests or intentions, Björn Hassler
argues in ‘Environmental Support to the Baltic States: Donor Incentives and
Recipient Consequences’ (WAP). Support by Sweden and other Nordic countries
to the Baltic states, Poland, Belarus and Northwest Russia, partly under the joint
HELCOM11 framework, was directed to common environmental interests, rather
than to the highest priority recipient country needs, and issues were selected
10
Tacis (Technical Assistance to the Commonwealth of Independent States) is the
European Union’s assistance and cooperation programme for Armenia, Azerbaijan,
Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan, Turk-
menistan, Ukraine, Uzbekistan, and (through 2003) Mongolia.
11
HELCOM (Helsinki Commission) was established following the 1974 Stockholm
Conference on Human Environment to institutionalise Baltic Sea regional environmental
cooperation.
that would employ Swedish environmental knowledge, technology and equip-

ment. While donor-led funding allocation has ensured that common interests
have been addressed, problems specific to the Baltic states have not been, calling
into question the aid component of the bilateral programme. Donor funding
allocation and project definition have been coupled with requirements for
extensive funds matching by recipient countries, resulting in projects that
neglected the most pressing recipient environmental needs, while diverting
recipient resources away from those needs. Local environmental problems in the
Baltic states do not necessarily affect the air or the Baltic Sea, and thus do not
immediately affect those countries’ common interests with Sweden. Recipient
interests in stemming ongoing ‘local’ environmental deterioration may be under-
mined by the bilateral support programme.
Hassler’s (WAP) study echoes constructivist critiques of realist approaches to
international negotiation (Kratochwil 1993; Dowding 1991), in which the sum of
unilateral interest definitions may be an outcome that excludes more jointly
realisable value than it includes.
Lesson 2: Empowering Recipients to Define Programme Goals May Have

Undesirable Effects
Donor interests are not always clearly defined or aggressively promoted; result-
ing outcomes may fail to meet the specific or overarching goals of aid pro-
grammes. Programme goals of EU Tacis aid to Russia have not been clearly
defined—largely allowing recipient groups to set aid priorities, Seija Lainela and
Pekka Sutela argue in ‘European Union, Russia and Tacis’ (WAP). This appears
to agree with calls in the development literature to involve recipient countries in
determining aid agendas and to consider recipient country needs with greater
sensitivity (Davis and Dombrowski 2000). Recipient participation in aid alloca-
tion may indeed be desirable if managed carefully by both donors and recipi-
ents. Lack of direction on donors’ parts may, however, devolve decision-making
to groups in recipient countries that many in those countries distrust (Wedel
2001).
Poor donor oversight has at times led Tacis funds to be allocated to projects
initiated to serve the political interests of incoming administrations (Lainela and
Sutela, WAP). While solving the problem of privileging donor over recipient
interests, this failed to serve the most pressing recipient country needs. Tacis
projects have been funded by grants, limiting donors’ ability to impose condi-
tions. The formal decision-making structure of Tacis projects, intended to pro-
mote recipient country involvement and empowerment, has been divided
between European Commission directorates and recipient National Coordi-
nation Units. These units initiate and can delay development projects, determine
which domestic organisations will implement and benefit from projects, and
supervise domestic tendering and contracting. The broad and vague goals
outlined in EU Tacis framework documents allow considerable scope for recipi-
ent country authorities to determine which projects Tacis will fund in their
country. Lainela and Sutela (WAP) argue that this has resulted in a proliferation
in Russia of small, brief and varied projects lacking coherence or clear links to
policy goals, and note that other EU technical assistance projects may face
similar problems.
Lesson 3: Donor Coordination in Programme Design Affects Outcomes

There may be no single set of recipient interests or priorities that can be
incorporated into aid programme design, even should donors wish to do so.
Nor may there be a generic set of outcomes to strive for. The model, some assert,
for recipient countries to emulate is simply that of the donor countries them-
selves. Yet even were recipients to emulate, uncritically, donor ‘models’ of
sectoral and institutional outcomes, this emulation would not be straightforward
in countries in which multiple aid programmes have been funded by multiple
donors. Not only have American, French, German and Scandinavian models
been adopted in civil service reform, but some recipient countries have also
sought to implement several of these models at once, argues Markku Temmes in
‘Public Administration in Transition: The Role of Tacis, Phare and Twinning’
(WAP). Piirainen (WAP), following De la Porte and Deacon (2002), notes that EU
Tacis experts have tended to promote the social service provision models of their
own welfare states, with little reference to recipient needs or to incompatible
approaches by other expert teams working before or after them in the same
recipient country.
Given the number of donors operating in the postcommunist space, some
coordination might be expected. Global donor coordination has variously been
attributed to the Organisation for Economic Cooperation and Development, the
United Nations, the Group of Eight industrialised countries, and other joint
initiatives. Despite these institutions and mechanisms, formal coordination in
Russia and in other postcommunist countries has been notably absent or was
quickly abandoned (US GAO 1995, 2000). Plans by international donors in the
early 1990s jointly to aid Russia through a Grand Bargain or Russian Marshall
Plan did not materialise, and bilateral aid to Russia, particularly prior to the 1998
crisis, was marked more by donor competition than coordination (Lainela and
Sutela, WAP). Davis and Dombrowski (2000) concur that bilateral aid coordi-
nation has ‘been long on rhetoric and short on results’, noting that neither formal
G-7 donor coordination meetings nor informal donor meetings within particular
recipient countries have led donors to coordinate priorities or responsibilities.
Recent global aid initiatives have suggested that bilateral donors coordinate their
support for sectoral intervention in recipient countries rather than focusing on
discrete projects (UNDP 2003).
The need for greater coordination among donors has long been acknowl-
edged with regard to aid to African, Asian, and Latin American countries.
Coordination was advocated in the 1980s to alleviate the strain of multiple donor
activity in a single country, which led to proliferating and mutually inconsistent
aid projects, and which overloaded recipient administrative capacities and
matching resources. This coordination has not, however, been realised in those
regions: donors were reluctant to curtail their freedom to pursue their own
interests via aid; often disagreed on development policies or models; and did not
wish to bear the administrative burden that coordination might entail (Cassen et
al. 1994).
Despite efforts toward coordination, aid processes, as well as aid goals, in the
postcommunist countries have suffered from its lack. One partial solution
advocated by Temmes (WAP), following Corkery et al. (1998), is the creation of
‘lead agencies’ on the recipient side to coordinate administrative and civil
service reform in the countries preparing for EU accession, and to manage donor
interaction (from the recipient, rather than the donor, side). Yet while centralis-
ing recipient decision-making in lead agencies may facilitate coordination of aid
administration across donors and even across sectors over time, its value can be
limited when the agency’s position with respect to government structures is
ambiguous.
Temmes (WAP) notes that even the form that aid takes may lack coordination
across donors: Some donors define aid as loans to be carefully repaid, while
others define aid along a continuum ranging through considerably softer loans
to grants. Multiple concurrent financing instruments may generate mixed mes-
sages and conflicting pressures on recipient countries long after aid has been
disbursed, creating incentives to play one donor against another.
Lesson 4: Participation by Local Agents in Aid Programme Implementation

May Benefit Groups With Little Interest in Those Programmes’ Success
Intermediators of postcommunist aid interactions also impact outcomes. Em-
powering recipient groups to implement projects, like empowering recipients to
define projects, can result in programme benefits not being realised—or dis-
tributed—as expected (Henderson 2002). Wedel (2001) underlines the
significance of to whom, through whom and from whom aid is channelled, as
well as the reactions it catalyses.
In US democracy promotion in the Kyrgyz Republic, ‘through whom’ con-
sisted of long chains of multiple, dispersed and minimally accountable agents,
Matthew Spence argues in ‘The Impact of US Democracy Promotion in the
Kyrgyz Republic’ (WAP). US funding was channelled through international and
local NGOs linked via complex contractor and subcontractor relationships. US
domestic politics shaped the impact of US democracy promotion abroad. More-
over, USAID12 and US diplomats stationed in the Kyrgyz Republic possessed
few tools with which to react to the Kyrgyz Republic’s increasing authoritarian-
ism. Following initial steps toward political liberalisation, during which Strobe
Talbott of the US referred to President Akayev as a ‘true Jeffersonian democrat’,
indicators of political and economic freedoms plunged. Due in large part to
Congressional and bureaucratic constraints on US policymakers, US democracy
promotion policy was slow to react to undemocratic trends during the 1990s.
The US’s incoherent and uncertain requests, and underestimation of the com-
plexity of local conditions, resulted in low costs to Akayev for undemocratic
behaviour. Spence asserts that the US government’s tendency to focus on
superficial democracy indicators such as the number of NGOs or media outlets
led to an increase in the number of NGOs and media outlets, while real political
freedom and government accountability declined. Although US democracy
promotion did not cause the Kyrgyz Republic’s increasing authoritarianism,
Spence (WAP) argues, the mode of American engagement, in which aid and
diplomacy were not linked, and in which aid project mediation and implemen-
tation were dispersed among many local actors, did little to reverse the undem-
ocratic trend.
12
USAID (United States Agency for International Development) is a US federal agency
conducting bilateral assistance programmes.
Aid to promote democratisation and civil society has also been channelled
through local NGOs in Southeastern Europe. Donors have used the number of
NGOs to gauge levels of democratisation attained, yet NGO proliferation is
often an artefact of aid disbursement, Steven Sampson argues in ‘What Really
Happens When We Export Democracy: Experiences from the Balkans’ (WAP).
NGO channels of aid administration and disbursement have led a Western-
oriented, grant-focused NGO elite to draw talented members of recipient soci-
eties away from less lucrative positions in government and enterprise.
Lesson 5: Recipients May Not Observe Standards Donors Do Not Themselves

Maintain
Like the distribution of decision rights for project definition and the structure of
agency chains for project implementation, the actions of donors in their direct
and indirect encounters with recipients also shape aid outcomes. Sampson
(WAP) suggests a corollary of the ‘Do it yourself’ maxim: ‘Practice what you
preach’. If donors seek to change recipient administrative and social practice,
they must model scrupulously, throughout the life of projects, behaviours they
seek to promote.
In Sampson’s (WAP) analysis of Western democracy promotion in the
Balkans, donors’ orchestration of the aid process determines its effectiveness.
Donors (and their consultants) in Romania often cast recipients as idealised,
unrealistic images of themselves, expecting recipient NGOs to rely on volun-
teers, while relying entirely on paid staff themselves, and frowning on recipient
networks of personal loyalty and relationships, while relying on similar, West-
ern networks. Recipients, in turn, learned to view dichotomies of word and deed
as constitutive of aid interactions that served primarily to channel Western
resources to groups skilled at maintaining illusions donors expect but do not
themselves practice. Donors in postcommunist countries have sought to replace
loyalty to an authoritative individual with a ‘Western’, Weberian bureaucratic
model of loyalty to an organisation or principle. Yet donor and consultant
processes for delivering monetary aid and technical assistance often reflect the
interpersonal loyalties, group interest and self-dealing donors seek to supplant
in recipient countries. As Lainela and Sutela (WAP) note, the opaque and
cumbersome bureaucracy of the European Commission’s Tacis programme
administration has not facilitated introducing the rational, efficient, disinterested
organisational culture that Tacis was designed to instil.
Lesson 6: Detailed Understanding of Recipient Counterparts Has Been Lack-

ing, Despite Being Urgently Needed
No single model of donor behaviour guarantees aid’s success. The aid encounter
involves at least two parties, yet donors have seldom made the same effort to
understand recipient cultures, needs, and interests that recipients have made to
understand those of donors.
Donors’ first task in constituting such relationships is to choose—or prop
up—local negotiating partners. In the early 1990s, some donors professed that
radical change (‘shock therapy’) could be forced whole on countries from the
top, via an alliance of Western advisors and Westernised elite policymakers in
recipient countries. ‘Reformers’ were those domestic counterparts most closely
allied with Western advisors. As Jan Björklund (2002) noted in his Aleksanteri
Seminar lecture, ‘The Peacock and the Sparrow: The Symbolic and the Mundane
in Aid to Eastern Europe’, donors paid large sums, under the rubric of democ-
racy promotion, to the 1996 political campaign of Boris Yeltsin to render his
defeat in free elections impossible.
Knowing with whom one is dealing means thoroughly understanding recipi-
ent country administrative cultures, internal constituencies and their needs, asserts
Irina Dezhina in ‘Policy, Activity and Impact of International Organisations
Providing Assistance to Russian Science (1992–2002)’ (WAP). In the early 1990s,
donors’ lack of detailed knowledge of countries emerging from behind the Iron
Curtain might have been understandable. Demand for technical assistance in the
CIS countries during the early 1990s, Piirainen (WAP) notes, soon overwhelmed
Western consultancies’ culturally competent labour supply. Yet a decade-and-a-
half after the fall of communism, such understanding remains insufficient.
Recipient social relations and agendas, and relationships between donor and
recipient representatives, largely determine outcomes of aid interactions (Wedel
2001); donors’ knowledge of social relations under communism is thus crucial to
understanding with whom they are dealing in postcommunist countries. The
‘inadequate capacity of local counterparts to participate’ has limited the effective-
ness of social sector technical assistance projects in the CIS countries (Piirainen,
WAP). Temmes (WAP) and Piirainen (WAP) note that designation of counterpart
ministries for civil service or social sector reform in donor and recipient countries
has led donors to expect recipient ministries to operate according to the same
organisational logic as their own, and to be capable of supporting technical
cooperation, when in fact they might not be. Former Sovietologists and area
studies specialists within and outside the postcommunist countries blame late-
comers to the region for advocating programmes without understanding the
specific cultures involved. Cooley (2003) echoes Temmes’ assertion regarding
capacity-building projects ‘twinning’ donor and recipient bureaucratic agencies:
donors often assume that recipient agencies play roles similar to those in their
own countries. Temmes notes that projects building recipient agency administrat-
ive capacity ‘without truly redefining their Soviet-era organisational roles and
responsibilities’ may do more harm than good.
Donors’ failure to understand the marked differences between postcommunist
social structures and those in donor countries have resulted in attempts to build
a broad-based, community-centred civil society that instead created a Western-ori-
ented NGO elite skilled at winning Western grants, stratifying recipient societies
by making a few better off, rather than improving the condition of the ordinary
or worst-off (Sampson, WAP).
Lesson 7: Aid May Help Most Those Who Need It Least

Aid that does little for the worst off might not only be an occasional failing.
Donors may most successfully aid those countries least in need of their assist-
ance, Vladimir Mau and Konstantin Yanovskiy argue in ‘Postcommunist Coun-
try Assistance Programmes: Some Approaches to the Evaluation of Factors
Affecting Efficiency’ (WAP). The finding that ‘assistance programmes proved to
be most successful in countries where due to a timely schedule and consistency
in reform implementation, governments can easily do without’ them substanti-
ates claims in the scholarly and technical literature on aid programmes regard-
ing the difficulty of reaching ‘the poorest of the poor’, or those groups or
countries most in need.
Aid’s timing, Mau and Yanovskiy argue, has been crucial to its effects in
particular postcommunist countries. In Slovenia, the major share of multilateral
aid was disbursed during the rise to power of a reformist government, facilitat-
ing a process already taking place within the country. In Romania, the bulk of
international aid was disbursed during the ascendancy of a socialist govern-
ment, with little liberalising effect. When Romania’s reformist Constantinescu
government presented a new ‘window of opportunity’ (a reformist government
backed by a parliamentary majority) in 1996, large sums had already been
disbursed by donors, little further aid was forthcoming, and the government and
its promised reforms faltered. Spence (WAP) cautions, however, against identify-
ing particular leaders or governments as ‘reformers’ or ‘non-reformers’, citing
the Akayev government in the Kyrgyz Republic. Governments might substan-
tially reform the economy and join the WTO, while consolidating in domestic
politics what an official in Kazakhstan has dubbed ‘authoritarian democracy’.
If governments lack the history, institutions, and capacity to engage with
donors and domestic groups in ways conducive to reform, help from outside
may be unhelpful at best. Hopkins (2000) notes that in the ‘anarchical states’
most in need of aid, ‘state failure’ may lead donor initiatives to fail as well. The
US General Accounting Office (2000) review of US and European aid to Russia
underscores the donor consensus (Andersen 2000) that recipient ownership,
partnership, and participation are necessary prerequisites for aid’s success,
advising donors to focus aid on areas in which Russians indicate readiness to
reform. This may, however, favour programmes with near-term results, rather
than those with longer time horizons but greater importance (Davis and Dom-
browski 2000). Carothers (1999) argues that democracy assistance has been
helpful only in countries ‘willing to democratise’. Cooley (2003) argues that
apparent willingness is insufficient, as in CIS countries in which the effect of aid
has been ‘constrained by Soviet-era practices, extensive, corrupt bureaucracies,
and top-down patronage networks’, a finding echoed by Spence (WAP).
There is emerging consensus in the aid community, contrary to the World
Bank’s earlier privileging of ‘economic’ and ‘social’ over ‘political’ consider-
ations in aid allocation, that aid ought to be channelled to the poorest countries
that also practice good governance (Piirainen, WAP). Yet among Tacis pro-
gramme recipients, ‘only Mongolia could without hesitation be said to qualify
for assistance on both counts: it is a poor country with a GDP per capita of
approximately $400, it has a relatively efficient and honest public administration
at all levels, and poverty reduction and social issues are given a priority status
in government policy’ (Piirainen, WAP).
Donors might bridge the gap between recipient words and deeds through
conditionality (Cooley 2003), yet this depends on donors’ ability to enforce
compliance with conditions, and says little about the side-effects, highlighted by
critics of World Bank Group structural adjustment programmes, of those condi-
tions. The World Bank’s (1998) own assessment of ‘what works…and why’ in
aid negotiation notes that ‘donor financing with strong conditionality but
without strong domestic leadership and political support has generally failed to
produce lasting change’.
Lesson 8: While Contexts Have Changed, Paradigms Have Not

Donor framing of aid’s contexts, models and purposes often neglects the
unique exigencies of postcommunist countries’ actual, current situations, argues
Hans-Joachim Spanger in ‘Western Democracy Promotion in Russia’ (WAP).

World War II, the Cold War, and the War on Terror have all been adduced by
donors as framing narratives of postcommunist aid interaction. Donors have
uncritically applied the European Marshall Plan experience of the 1950s, and
‘Third World’ development experience of the 1960s and 1970s, to the postcom-
munist context, with poor results.
The Bretton Woods institutions that arose after World War II rebuilt Europe’s
roads, bridges, and dams. Following the collapse of the communist political,
economic, and social system, however, the World Bank and other donors
endeavoured to build recipient country institutions, which may be more difficult
to build than roads.13 At few points in history has so much been demanded of
institutions: donors and recipients alike have described postcommunist institu-
tions as mechanisms, and even agents, of radical social change. It remains an
open question whether or not institutions are up to this transformative task. It
is also not clear that donor bureaucratic routines and processes developed since
World War II are capable of building or transferring institutions in postcommu-
nist countries.
Aid negotiations by parties that recognise postcommunist countries’ distinct
historical circumstances may fare better than negotiations too closely modelled
on the experience of other times and regions. Donor and recipient framing of
aid’s tasks was crucial to outcomes of EU Tacis aid to Russia (Lainela and Sutela,
WAP). Although Russia was the greatest single recipient of EU funding in the
1990s, this aid’s effect has been minimal. Nor has Tacis’ substantial funding of
CIS countries, including €627 million to Ukraine between 1991 and 2001,
approached the impact the EU Phare14 programme, coupled with the prospect of
EU membership, has had on reform in Central and Eastern Europe. However
well-intentioned and well-funded, Tacis aid lacked a compelling narrative frame
and historical context.
Donors must not only guard against ‘fighting the wrong war’, but must also
beware pyrrhic victories gained by misapplying theoretic models of develop-
ment in postcommunist contexts. Like historic paradigms and narratives of the
aid interaction, models derived from economics have also been applied to
postcommunist aid negotiations. Critics (Murrell 1995; Przeworski 1992) have
reviewed the origins and chequered career of the ‘Washington consensus’
(Williamson 1992, 1993) and of neoliberal, neoclassical approaches to the post-
communist countries;15 Stiglitz (1998) and Kolodko (2000) assert that this consen-
sus applies best to its original Latin American context, and has not travelled
well, even after its revision.
13
In Eastern Germany, in contrast, the federal government has spent over one trillion
euro on refurbishing infrastructure, subsidising local governments and providing welfare
benefits (Benoit 2004), while largely replacing GDR with West German institutions, and
without allocating comparable funds to develop ‘local’ institutions or to facilitate adap-
tation (Offe 1996b).
14
Phare (Poland Hungary Reconstruction Programme) is the European Union’s assist-
ance programme for candidate and acceding countries.
15
While Williamson has downplayed connections between a ‘Washington consensus’
and neoliberalism—or neoconservatism—other commentators use these terms inter-
changeably (Williamson 2000).
The Western ‘economic’ model of postcommunist aid goals and processes

dominates the discourse of both West and East. Its orienting concept is the
market. Dezhina (WAP) notes that much Western aid to Russian sciences has
promoted market-based scientific funding and production. Yet one might ques-
tion who has benefited from marketisation of the Russian scientific establish-
ment when many of Russia’s best scientists have found financial security in the
West, contributing to a deskilling of and disinvestment in Russian science and
technology without precedent (Reddaway and Glinski 2001).
Lesson 9: Donors May Coordinate Most Effectively When Collaborating on

the Same Project
While prior lessons noted the consequences of too little coordination and focus,
too much aid targeting has also proved detrimental. Once donors target particu-
lar sectors, aid may become overly concentrated in those sectors. Sweeping,
simultaneous changes in postcommunist countries create opportunity for conflict
between levels of transformation (Offe 1996a); this may also hold true of
individual aid programmes. Donor concentration in some countries and sectors
has led to poor coordination within those countries and sectors, and to neglect
of other countries and sectors.
Too much of a particular kind of aid may accomplish some goals in one
sector, but hinder development in other sectors to an extent that outweighs its
achievements. Projects successful in one sector can also draw resources away
from other sectors. Spanger (WAP), following Reddaway and Glinski (2001),
notes that concentrated allocation of Western resources to economic aid in
Russia may have undermined more diffuse programmes to promote democrati-
sation—contributing to a resurgence of authoritarian politics and the develop-
ment of an oligarchic market. IMF focus on macroeconomic aid to Russia may
have led to neglect of institutions crucial to the economy’s functioning. Deterio-
rating economic conditions in Russia, in turn, undermined the impact of useful
democratisation and civil society-building projects (Spanger, WAP). In other
postcommunist countries, rapid industrial development, even when successful,
may lead to overwhelming social and welfare burdens that neither recipients nor
donors are prepared adequately to mitigate, which may then undermine politi-
cal stability (Temmes, WAP).
Donors may concentrate aid not only in particular countries or sectors, but
also in regions, and particularly in capital cities (Davis and Dombrowski 2000).
Aid to support Russian sciences, however, has emphasised regions outside
Moscow, as donors have sought to develop research capabilities elsewhere by
keeping talented individuals away from the centre (Dezhina, WAP).
Aid to postcommunist countries has nonetheless included instances of coor-
dination by multiple donors. Some large cooperative projects, with joint partici-
pation by multiple donor agencies from several countries, have fared better than
similarly large projects involving single donor agencies.
Häyrynen (WAP) notes that the multi-donor project to improve St. Peters-
burg’s water sector, though one of the largest environmental projects undertaken
in the postcommunist countries, met most of its goals, including financial
stability for Vodokanal, which was recently ranked the most efficient water
utility in Russia. Funding began in 1993, with the Finnish Ministry of the
Environment as sole donor, and has continued over more than a decade,
primarily under EBRD16 auspices, with participation of other donors including
the Nordic and European Investment Banks, DFID,17 the Danish Environmen-
tal Protection Agency and Tacis.
While both donors and recipient shared compelling interests in ensuring
adequate wastewater treatment so close to the Baltic Sea, the scope of the
attention to St. Petersburg’s water sector may also have contributed to its
success. One phase of this initiative, the development of a wastewater treat-
ment plant for over €160 million with more than a dozen donor counterparts,
scheduled for completion in 2005, has emerged as one of the largest environ-
mental projects in Europe. Häyrynen (WAP) asserts that this cooperative donor
initiative in St. Petersburg has had measurable positive effects on the water
sector and on the Baltic Sea, although from a broader organisational and
societal perspective Vodokanal’s modernisation involved Russians’ adapta-
tions to Western organisational practices rather than shared learning by donors
and recipient. Such a large, cooperative, multi-donor project may have suc-
ceeded by minimising donor competition and congestion—endogenising a
coordination problem that might otherwise have manifested itself within the
sector, making this instead a coordination problem within the project. Donors
could reliably share information not only in the contexts of high policy, high
office and high concept but also in routine on-the-ground operations within a
common overall programme. Thus the project ensured that the water sector
was neither neglected nor oversubscribed by conflicting donor approaches or
by multiple projects competing for recipient administrative resources—as has
been the case in many other countries and sectors.
Lesson 10: Aid Programmes Benefit When Donors Listen to Recipients

The need for donors to listen, rather than dictate, to recipients is a near-univer-
sal axiom of externally assisted social and economic change. Häyrynen (WAP)
asserts that, rather than merely transmitting know-how or catalysing planned
reactions, aid encounters characterised by mutual learning generate new,
shared meanings and practices. Yet such two-way aid encounters have been
rare. Nor has the capacity to consult with, and learn from, people in recipient
countries been great. The capacity building the West might require to partici-
pate in such two-way encounters would not be slight.
As Temmes (2002) has noted, at the top of the pyramid of aid interactions
stands a collaborative dialogue that postcommunist ‘East’ and ‘West’ have not
attained. Such collaboration would require adaptive characteristics of interact-
ing, listening, and responding, mindfully, in real time. Aid interventions,
under such collaboration, would be customised to local conditions, absorbing
and incorporating local models from recipient countries into programmes of
administrative, political, environmental, social, and economic reform. Aid
negotiations would occur at the local level, while the sum of donor interven-
tions would be coordinated at the level of countries or regions.
16
EBRD (European Bank for Reconstruction and Development) is a multilateral facility
for financing private enterprise and assistance programmes in postcommunist countries.
17
DFID (Department for International Development) is the official bilateral assistance
agency of the UK government.
Yet the history of aid negotiation between ‘West’ and ‘East’ suggests that it
is difficult to transmit expertise without transferring models, to teach just
literacy while reading only the Bible. Donors may not be able to support
institutional development without imposing institutional models. Perhaps, how-
ever, models might be constructed interactively, in an evolutionary way, within
the transforming societies themselves. Under the prevailing ground rules of aid
provision, dominated by donor models, interests, conditions and projects, who
would fund such an endeavour?
Can the Lessons of Postcommunist Aid Negotiation Be Learned?

The dialogue informing the present essay might best contribute by highlighting
its own limitations. Scarce lessons extracted from the postcommunist and other
aid experiences (Pritchett 2002), published and discussed in international fora,
are with few exceptions produced by and for donors (World Bank 1998, CBO
1997). Generalisations and prescriptions by and for aid recipients have been
insufficiently elaborated. Nor has an independent ‘public sphere’ spanning
multiple postcommunist countries emerged outside the auspices of Western
donors. While groups of neighbouring countries have developed some elite
dialogue in recent years, no cadre specialising in sharing aid knowledge and
experience among recipients yet exists. Nor is there yet wide practical appli-
cation of the notion—reflected in recent research on harvesting technology
‘spillovers’ from foreign investment (Barclay 2003; Lall 1996, 1997)—that recipi-
ents must make active efforts and build dedicated, mediating institutional
structures, beyond participation in individual donor ‘projects’, in order to derive
benefit from aid. Stiglitz (1999) has suggested that, rather than demanding
imposition of Western models, postcommunist countries provide fertile ground
for experimentation with institutions and aid regimes: ‘not one but many
experiments’. Yet who, having experienced all that those in postcommunist
countries have since 1989, would want to be experimented on?
What went wrong with postcommunist aid negotiations is reflected in the
structure of those negotiations themselves.18 Aid negotiations need not solely
constitute an exchange, centred on interests and crises, conducted by those with
resources with those without. Ad hoc, short-term, competitive, interest-based
approaches by donors to negotiations with recipients have shown limited
results.19 Björklund (2002) underlines the need for greater attention by scholars
18
Whether or not there have been distinct and consistent ‘American’, ‘European’, or
‘multilateral’ approaches to postcommunist assistance (Antonenko 2003) is a question for
further research. While the EU in some two-way negotiations wielded accession as a
bargaining tool and employed its prior enlargement experience as a template, its interest
in accession candidates’ stability may have weakened its bargaining position (Ioniţă and
Muntean 2004). US influence over multilateral institutions and the resources it brought to
bear led to separate but largely similar recipient negotiations with bilateral and multilat-
eral donors. Distinct discourses about the postcommunist aid experience have arisen in
different donor contexts: While there is a transnational debate on the activities of the IMF
and World Bank, discussion (disproportionately focused on the acceding countries) of the
activities of European donors has been left largely to the Europeans, and discussion
(disproportionately focused on Russia) of US intervention to the Americans.
19
Van den Berg et al.’s (2002) idealised hierarchy of collaborative interaction between
Western donors and postcommunist recipients begins with information-sharing and ends
in ongoing, cooperative institutional partnership. Sillitoe et al. (2002) and Bicker et al.
(2003) describe an alternative model for donor-recipient interaction: Donor agencies may
solicit ’indigenous knowledge’ by employing anthropologists to mediate between aid
professionals and recipient population groups other than government, enterprise or civil
society elites.
to the interests and operating procedures of donor agencies. Increased aware-

ness by donors of the assumptions they bring to aid negotiations, and of the
interactions of their own efforts with those of other donors, might help them to
improve cooperation with recipients.
Discrete aid negotiations might not soon evolve into a shared public sphere
of Habermasian rational communication between and among donors and recip-
ients, through which numerous asymmetric, uncoordinated, overlapping and
conflicting aid interactions in recipient countries could be forestalled. It might be
unlikely that aid programmes could be designed not to teach but rather to learn;
that top-down negotiations between donors and recipients might be replaced by
a thick web of multidirectional, multi-party interactions; or that donors might
adopt the roles not of doctor, engineer, banker, teacher, or enforcer, but of the
convenor and facilitator participating in dialogue. Nor might aid, or the inter-
ventions of external actors, routinely change history; perhaps our estimation of
aid’s potential efficacy should be reduced. Yet aid has been very much a part of
postcommunist countries’ recent history; its lessons merit further study and
debate.
The research agenda suggested by the lessons reviewed in this essay might
include studies of alternative archetypes of ‘donor’ and ‘recipient’ interaction
(Schein 1999), ‘Western’ or otherwise—not only those in which one group knows
better than another how to prescribe, fix, design, install, transfer, build or
refurbish (Block 2000), but also other social roles through which individual,
organisational and community change are catalysed (e.g. the healer, the mid-
wife, the cleric, the counsellor, the coach). Detailed, empirical research might
also be undertaken into the structure of existing donor-recipient interactions.
Debates on abstract goals of aid, development and transition, and quantitative
evaluation of the implementation of specific projects against donor-defined
goals, might both be supplemented by inquiry into the modes of intervention of
multiple donors, and into the totality, and the unintended consequences, of
those interventions’ effects.
Legal scholars, social scientists, and universities in postcommunist countries
have struggled to recreate their disciplines to correspond with emerging models
of society, in the context of limited collaboration and exchange across countries.
Fragmentation and lack of regional integration may be understandable given
postcommunist countries’ recent independence and imperative to assert sover-
eignty and self-determination in the Soviet aftermath. The presence of Western
donors, as missionaries and as models, in Washington and in Brussels, has also
drawn recipients’ attention away from opportunities to cooperate with neigh-
bours toward pressures to compete for Western attention and resources. An
absence of mechanisms for knowledge-sharing by people in postcommunist
countries with each other, and a focus on interactions with donors, has led to
iteration of similar learning processes and dysfunctions across recipients, with
little transfer among them of ‘lessons learned’ other than via donors and their
consultants—a dialogue in the West ‘for’ or ‘about’ postcommunist countries,
but largely not with them.
The ‘lessons’ of postcommunist aid negotiation point both to the problem of
donor congestion20 and to two possible solutions to this problem, beyond
competition or coordination of existing donors in postcommunist countries. The
20
Donor distribution across postcommunist countries has not been uniform; some
countries have seen intensive donor activity, while others have suffered relative neglect.
first is donor reduction and consolidation; the second is redefinition of donor

roles and of the structure of donor-recipient interactions.21
Since the establishment of the multilateral aid institutions following the
Bretton Woods conference, there has been little systematic or sustained collusion
or ‘cartelisation’ among the growing roster of donors.22 There is no single
regulatory or licensing body for donors (or for such aid mediators as NGOs or
consulting firms), although international organisations have made efforts to
create networks, frameworks, representative bodies, peer reviews, and other
coordination mechanisms (Wolfensohn 1999; Wolfensohn and Fischer 2000),
many of which have been region- or sector-specific. Bilateral donors take aid
allocation decisions at the sovereign level; multilateral donors are formally
beyond sovereign jurisdiction. Coordinating bodies such as the United Nations
maintain significant presences in recipient countries, generating interactions and
interests beyond their coordination of other donors. The OECD Development
Assistance Committee issues non-binding aid policy guidelines for donors from
the official sector—an important group, but far from an exhaustive one. While
lender groups have met to fix policy for repayment of sovereign debt, this
represents only a part of aid activity.
Recipient cartelisation has failed as well—with an important set of excep-
tions. Donors have long resisted the formation of cartels of sovereign debtors at
the ‘macro’ (national) level (Tussie 1998). Yet during the past decade, in South
Asia and the Americas, donors have learned that peer-group cartels work
wonders at the ‘micro’ (enterprise, village and municipal) level of microfinance
lending programmes. Small debtors’ interactions with each other (rather than
only donor-to-recipient) have been a primary factor in the success of aid
programmes providing microfinance to local communities (CGAP, 2004). It has
also been considerably less difficult for a single donor to stake out or monopolise
a particular aid negotiation ‘space’ when that space has been populated by
individual entrepreneurs or local groups of potential entrepreneurs, than when
it has been populated by central governments.
Figure 1 schematises selected types of interaction between and among donors
and recipients. In the simplified microfinance model in the upper-left corner of
Figure 1, a single donor negotiates with multiple recipients. Interactions among
recipients, while these may not involve financial transfers, are an important
element of the lending process in this model. Interaction between donor and
recipients is asymmetric and largely ‘vertical’: aid comes ‘from’ the donor ‘to’
the recipients. Yet ‘horizontal’ communication among recipients who enter the
process in similar situations also partly constitutes the aid interaction. In the
simplified sovereign lending model on the upper right, in contrast, a single
donor negotiates with multiple recipients as in the microenterprise model, but
communication among recipients is not institutionalised and aid negotiations
remain one-to-one, asymmetric, and distinct. In the expanded model of aid
21
Reducing the number of donor organisations as an alternative to the present system
(one of intermittent coordination of existing donor organisations, few formal barriers to
the entry of new donors and a tendency for donor bureaucracies to persist once
established) need not mean reducing the resources dedicated to aid. There ought to be no
reason why a streamlined ‘donor sector’ might not administer aid resources equivalent to
or greater than present levels. The ‘lessons’ reviewed in the present essay suggest that a
smaller donor sector might more effectively administer existing levels of aid resources.
22
Easterly (2002) argues the opposite, suggesting decentralised aid ‘markets’ as a
remedy for the passive collusion of donor bureaucratic cartels.
Figure 1. Structural models of aid negotiation.
across sectors and levels of society on the lower left, multiple donors transact
‘vertically’ with multiple recipients in a particular postcommunist country, with
little ‘horizontal’ (peer) coordination or interaction among donors or among
recipients. ‘Congestion’ may occur when donor traffic is heavy, overlapping, and
little directed or controlled. In the model on the lower right, perfect coordination
by donors, without coordination by recipients, might function like the single-
donor model on the upper right, or as an iterated set of such non-overlapping
interactions.
Perhaps, as in the hypothetical model in the centre of the figure, donor
congestion might be alleviated not by fewer but rather by more complex
communicative links between and among donors and recipients, were such links
to privilege recipient coaching, monitoring and information-sharing of, by and
with each other.
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Cambridge Review of International Affairs

ISSN: 0955-7571 (Print) 1474-449X (Online) Journal homepage: https://www.tandfonline.com/loi/ccam20

Postcommunist aid negotiation: a review of recent

David Lehrer & Anna Korhonen

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Postcommunist Aid Negotiation: A Review of Recent

David Lehrer and Anna Korhonen1

An historical account of ‘postcommunism’ or the ‘triple transition’ (Offe 1996a)

ISSN 0955-7571 print/ISSN 1474-449X online/04/030593-24 © 2004 Centre of International Studies

some postcommunist countries relied on official aid amounting to nearly a

toward a largely empirical, compound question: What was ‘transition’ (or

to articulate a reactionary view of reform in which ‘everything backfires’

Lesson 1: Non-Cooperative Interest Definition May Fail Donor and Recipient

that would employ Swedish environmental knowledge, technology and equip-

Lesson 2: Empowering Recipients to Define Programme Goals May Have

Lesson 3: Donor Coordination in Programme Design Affects Outcomes

Lesson 4: Participation by Local Agents in Aid Programme Implementation

Lesson 5: Recipients May Not Observe Standards Donors Do Not Themselves

Lesson 6: Detailed Understanding of Recipient Counterparts Has Been Lack-

Lesson 7: Aid May Help Most Those Who Need It Least

Lesson 8: While Contexts Have Changed, Paradigms Have Not

Hans-Joachim Spanger in ‘Western Democracy Promotion in Russia’ (WAP).

The Western ‘economic’ model of postcommunist aid goals and processes

Lesson 9: Donors May Coordinate Most Effectively When Collaborating on

Lesson 10: Aid Programmes Benefit When Donors Listen to Recipients

Can the Lessons of Postcommunist Aid Negotiation Be Learned?

to the interests and operating procedures of donor agencies. Increased aware-

first is donor reduction and consolidation; the second is redefinition of donor

Figure 1. Structural models of aid negotiation.

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