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Wed. February 01, 2023
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IA-Forum Interview: Dr. Allison Stanger
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International Affairs Forum: Proponents of government outsourcing make the argument that private enterprise can do projects more effectively than big government. The holy trinity of business tends to be “cheaper, faster, better”. But as your book demonstrates, outsourcing seems to privilege certain insiders and a small number of large corporations. So isn't the argument that outsourcing is good business wrong? Dr. Allison Stanger: That's a great question. I think it's difficult to answer that across the board. Outsourcing in some instances is good, and in some instances is bad-and we need to know the difference, we need to know what context we're in. All of the issues surrounding outsourcing are exacerbated when it's done in wartime. Some of the biggest examples of waste, fraud and abuse that we see are with the contracting in Iraq and Afghanistan. So we need to make a distinction between wartime and peacetime contracting. I think we also need to make a distinction between good and bad privatization. IA-Forum: What's the distinction that you make? Dr. Stanger: I like to point out that there are positive and negative aspects to the privatization of American power. Some of the negative aspects are the loss of transparency, the misuse of resources, the exorbitant costs of the wars in Iraq and Afghanistan – those are negative examples. But on the positive side in the development realm there are some really interesting cases where outsourcing may actually promote sustainable development much better than direct government-to-government top-down foreign aid. So in that realm in particular, I think we need to recognize its potential positive contribution. IA-Forum: Your book focuses on the consequences of privatizing foreign policy, and you devote a chapter to the “end of statesmanship”. Diplomatic functions are being moved out of formal government channels. One tool you mentioned in particular is the “American Presence Post”. What is that function, and why is more diplomatic work being done outside the State Department these days? Dr. Stanger: I think it's a way the internet makes things possible that weren't previously. So you could have a virtual presence somewhere where you may not have a full blown consulate or embassy, and those are an attempt to exploit that advantage. I write in my book about this particular exchange with Felix Rohatyn and Jesse Helms, where it's really just an example of your “teller's window” being open in the provinces. With diplomacy you want to increase connections between people. And you want to have a presence there, so this was a way of doing that at a lower cost. IA-Forum: Since the State Department’s budget is so dwarfed by the Defense Department, where does that leave the State Department in terms of leverage and power at the table at the National Security Council? Dr. Stanger: That's a good question. In my book I talk about the militarization of American foreign policy and the shifting of resources from civilian agencies to the Pentagon. We're seeing a recognition that that's not a good idea - particularly because things aren't going so well in Afghanistan. And so you get a lot of pressure even from the secretary of defense to move resources back to the State Department. I think in 2008, that roughly 80% of the State Department's requested budget went out the door in contracts and grants. So the core business of the State Department has really changed. But I think our strategies and frameworks for thinking about it have lagged behind. IA-Forum: You argue that the current foreign policy process is broken, and recommend there should be one “national security” budget; the defense, diplomacy and homeland security agencies would be funded under it. This is a radical idea that would meet strong resistance. What would be two or three first steps in your mind to achieve that goal? Dr. Stanger: I guess what has to happen is to realize the system at present is broken. Everybody seems to agree on that. And then to step toward that goal, to get all the stakeholders together to talk about what changes they would like to see, and that's how you can get radical change with people still feeling ownership. I think the Goldwater-Nichols Act is a good example of how you might do that. IA-Forum: Let me ask about the public-private programs. Many of them have sprung up in the last decade - from landmine initiatives to laptops for kids in developing countries. What makes good public-private partnerships effective? Dr. Stanger: I think what makes them effective is that they embrace a notion of what can be called “development is freedom” - meaning development is all about giving people choices and if you want to really give people choices that's going to be very context dependent. So what all these successful initiatives share, in my view, is careful attention to local conditions. That's something we've gotten terribly wrong in the past, where we've had kind of a top-down, even “one size fits all”, approach to foreign aid. I think that there's a consensus mounting that's not the way to go, and that the extent to which we encourage bottom-up innovation, you're likely to get more sustainable outcomes. IA-Forum: Can you give us an example of a good public-private partnership you feel is particularly effective? Dr. Stanger: One organization that's impressed me is an NGO called Mothers to Mothers, based in Africa. They are working on HIV prevention, particularly preventing the transmission of HIV from mothers to their newborn infants. They do this in a really interesting way, where they counsel mothers who have effectively managed that, and then turn them into mentors for new mothers. And they actually pay the mothers. They empower the women. They give them a job. That's the way they spread knowledge about HIV prevention. Why that's interesting to me is there are former investment bankers working in that NGO, applying those techniques. The other thing that's fascinating to me is the majority of its budget comes from the U.S. government. Yet, it's operating on the ground independently in a context sensitive sort of way. IA-Forum: The book opens with a startling piece of data – that Lockheed Martin “gets more federal money each year than the Department of Justice or Energy.” Why should citizens and taxpayers be concerned about that? Dr. Stanger: They should be concerned about it because in a sense the business of government has become business. And that’s not necessarily in and of itself bad, but I think when you hollow out a government to such a large extent, that the private sector is really doing the everyday business of governing, there's kind of a tipping point there that once you cross over it, it becomes problematic. It becomes problematic because of the kind of turbo influence of the private sector on governance. Because if they're doing the business of governance, they're going to want to see legislation that continues to channel money their way. You can get some really perverse circles of influence there that aren't necessarily in the public interest. IA-Forum: Do you look at Adam Smith's original vision and say that basically government should provide security and safety, and sanitation and transportation kinds of things, and everything past that really should be private sector? Dr. Stanger: That’s such a great question because part of what I'm trying to say in my book is that we've lost our sense of those things that only government can do well. We've just taken this too far, and it's time to pull it back. It's interesting that people like Adam Smith and even Milton Friedman said security – defense - is the government's interest. Yet we've privatized much of defense, so we've clearly taken things beyond what either of those thinkers would have imagined that it's time to step back and ask whether that's really in the country's interest. IA-Forum: For centuries the church and religion held the power, then the nation-state did. Now it seems corporations and capitalism are the strongest players in the global village. Does the current great recession shift the power back to the state? Dr. Stanger: Here's the problem. It would and it probably should, but because of the way we've changed our governance, because we have this kind of shadow government that's comprised of all these private sector entities acting on behalf of the U.S. government, moving it back is very difficult because there are all sorts of vested interests at stake. You see this playing out in all kinds of interesting ways where it seems as though money has more or less captured our politics. You get this gridlock on things like financial reform and health care reform. I think that's very much linked back to the radical extent to which we've outsourced government functions. IA-Forum: When you say money has gotten a lock on it, do you actually mean lobbying? Dr. Stanger: I mean lobbying because there's obviously that dimension there that once you have these contracts there's a definite pressure to continue them. Every contract is probably primarily situated in a particular Congressman's district, and so you see campaign contributions that follow those patterns too. Take the war. I say Iraq and Afghanistan are our first two contractors' wars. Well if they're contractors' wars, then there are a lot of people who have a vested interest in foreign expeditions and continuing war, which isn't necessarily healthy either. Tom Friedman wrote a [NYT] column about my book recently, and if you look through the comments in response to that column, what really surprised me the most is the extent to which people think that contractors in war are all about Blackwater. Or all about security contractors. What we're really talking about is a much larger phenomenon. They're just the tip of the iceberg - not just in Iraq and Afghanistan but here at home. The way we run our prisons, a lot of prisons have been privatized, and so forth. So I'm trying to paint a picture of a much bigger problem of which security contractors are only a part. IA-Forum: You write that “unenlightened outsourcing is America's standard practice”, and it has allowed “three dangerous developments: gross fiscal irresponsibility, apathy among the public, and inadvertent militarization of American foreign policy.” With the creation of the military-industrial complex in the 20th century, and the National Security Act of 1947, that gave us the DOD, the U.S. Air Force, the CIA and the National Security Council, one could say those developments were fundamental to militarizing U.S. foreign policy. Isn't outsourcing just the latest mechanism for militarizing foreign policy? Dr. Stanger: That's a great connection you're making and I think it probably is. The most important thing to realize about those DOD budgets if you want to get a historical perspective on where America is now, and where we might be going, a lot of people are arguing this kind of back to the past approach, where they see a resurrection of patterns seen previously, such as ‘we should embrace containment’ to ‘we're in a situation analogous to before World War I’. But there are two things that have changed that make this an unprecedented situation. The first is this enormous Defense Department; if you look at the Defense budget, it just shoots up dramatically after 1945. You get a little peace dividend in the '90s, but very little, and it just stay at this very high level. Even with the talk about reallocating resources to civilian agencies, they're still just way up there, in a way they never have been previously in American history. That's one big change, and another I think the information revolution, it's just a radically different information environment, and that has all kinds of consequences for foreign policy that I don't think we've properly considered. IA-Forum: So is the takeaway message from your book that the problem isn't American government is too big, but that it's becoming irrelevant? Dr. Stanger: I think that's a great characterization of one big takeaway. As I often put it, we can't turn the clock back because outsourcing is in some part a rational response to a changed environment that globalization has brought about. But what we do need to do is get it right, and we're not there yet. And it's going to involve government. You simply can't have the public interest without government. We're rediscovering that and it's an important realization. What strikes me is that these debates between big government and small government are now beside the point; the old partisan, Left and Right divisions provide scapegoats but they don't provide solutions to a problem. We don't need big government or small government, we need government that works. We need good government. And good government in the information age is probably going to look a whole lot different than good government in the 19th century. IA-Forum: How does good government in the United States affect international relations? Dr. Stanger: Well there's the challenge of global governance. And that's a large one because we've got these global problems which one country can't address by itself. So that requires kind of a reorientation in our thinking. Good government looks the same everywhere, it's government by the people for the people. And it should be taking place in full sunlight, and everybody should understand how it operates. That's the problem with this excessive outsourcing is that we've rendered much of our governance wholly opaque. What you see when people find government opaque and they don't quite know how things work is you see an eruption of conspiracy theories. And that's what we see in Iraq and Afghanistan, and that's what we see in the United State today, I'm afraid. And it's understandable. IA-Forum: So in place of “unenlightened” outsourcing you advocate for “strategic” outsourcing. You point to “bottom-up innovation and radical transparency” as key tools to ensure fair play in those public-private arrangements. You also say that leadership must come from citizens not government reform efforts. What can citizens do, and how likely are they to do those things? Dr. Stanger: Well, you're going to need government reform efforts. But my point was that you're not going to see them without pressure from the public at large. Because you have a set of interests that benefit from the status quo, the status quo won't change until there's pressure from the American people that this simply is unacceptable, it no longer will be tolerated. That's what I meant by the American people have to lead. I make a point in my book of all these things that you really can do, over the heads of business and government, that push things in the right direction. But you'll definitely need government reform, particularly in what I called enlightened outsourcing and what I have since called “smart-sourcing”, as something different from just in-sourcing. Smart-sourcing involving bringing the right things back in-house, not just saying, “oh my goodness, this situation has gone too far, whatever we can bring in-house, bring it in” because that's not going to solve the problem. IA-Forum: You're talking about personnel as much as anything in the “smart-sourcing”. Dr. Stanger: Yes, you've got to reimagine government itself. If so much of governance is in the hands of the private sector, you really do need these what I call “21st century network managers” who are in government upholding the public interest and managing these contracts and grants across the public-private divide. What we really need are people in government who are doing the managing as the projects are ongoing not just having inspectors general for after the fact. IA-Forum: What is the “post-industrial foreign policy”? Dr. Stanger: Post-industrial foreign policy is an effort to capture the strategic reorientation we need for the information age. We don't need a new prescription for our glasses, we need a new eye chart, we need to change exactly what we see. I think there are really three planks to a post-industrial policy that I'd highlight. The first being to demilitarize American foreign policy, the second being to embrace smart-sourcing, and don't just blindly turn to in-sourcing, but the third that we haven't talked about is to embrace a form of radical transparency. Because if you're going to have this outsourced policy to the private sector it's got to take place in full sunlight. People have to be able to see where the money is going and how well it was spent. President Obama's been great at moving things in the right direction both as a senator and as a new president, with USASpending.gov, which is this website that allows the American people to see where their taxpayer dollars go. Contracts and grants are all up there, you can really track it. But if you look on that website what you'll also see under the category, “subcontracts and sub-grants”, is that those areas were supposed to be online by January 2009, and the site is still under construction. Well if you've got transparence at the big contract level, but then they're turning around and doling it out to all these subcontracts and that's opaque, you've still got a problem. So we're moving in the right direction but there's still a lot of work to be done. IA-Forum: Do you think that one of the weak links in this idea of moving towards good governance is that citizens have become consumers, not primarily citizens, and there's a loss of a civic sense of responsibility to hold people accountable and to participate in government constructively in trying to make things better as opposed to just being critical of what's happening? Dr. Stanger: You put your finger exactly on what the problem is. We've become a nation of consumers, not citizens, and that's precisely what we need to change. I think that that really comes from our almost blind market fundamentalism which has since been exposed as a faith that was misplaced, because markets can solve a lot of problems, but they're not going to solve all our problems, and they're certainly not going to tell us what we believe in as a community or as a people. And so in a sense reinventing a robust notion of service, of public service. The flip side of which is citizenship, is precisely where we need to go. Because you're not going to get these people in government who can uphold the public interest if everybody values making as much money as possible. So it's a reorientation of values that's involved here in some very large sense. IA-Forum: Thank you, Dr. Stanger. Dr. Allison Stanger is the Russell Leng '60 Professor of International Politics and Economics and Director of the Rohatyn Center for International Affairs at Middlebury College. Her most recent book, One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy, was published by Yale University Press in fall 2009. She is a member of the Council on Foreign Relations. Stanger received her Ph.D. in Political Science from Harvard University.

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