Collision and collusion: the strange case of Western aid to Eastern Europe, 1889-1998

Conrad's Heart of Darkness comes to mind when one considers Western involvement in Eastern Europe and the countries of the former Soviet Union during the past decade. Like Kurtz, certain political, academic, and business leaders in the West once harbored lofty notions of weaning former communists from their savage ways and bringing them into the light of democracy and free markets. There was much rhetoric about how the West was going to help those countries transform their decrepit political and economic systems into burgeoning capitalist economies. Beneath all the eloquence, however, lay something much more mundane--greed and self-interest. Just as Kurtz discovered a heart of darkness behind all of his enlightened words, on examining the past ten years of financial aid to Eastern Europe and the former Soviet Union, one finds mostly empty promises, squandered hopes, and bilateral corruption. Wedel's book, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, provides a fascinating and troubling window into this rapacity.With the collapse of the Berlin Wall in 1989 and the subsequent dissolution of the Soviet Union in late 1991, what Wedel calls triumphalism prevailed in the West. The forces of capitalism and democracy had won the cold war, yet no clear demarcation existed between victor and vanquished. Many in the East felt like victims, believing that defeat had either been imposed on them by the former elites or that the West shared responsibility. While many Westerners gloated, they displayed little urgency to help the former communist countries. Minus the physical destruction caused in a traditional war, Western analysts argued that advice, planning, and recommendations would serve as the mortar for the countries to rebuild. And there was no shortage of those willing to proffer (and profit from) this advice.The inconclusive cold war victory would not have permitted the West to occupy the countries of Eastern Europe, so many Western governments decided to channel aid through private firms. Smelling a fresh new market, Western consulting firms pounced and willingly accepted the role of political and economic consultants for these fledgling governments. However, the political and economic lessons those firms taught were not the most ennobling.Although the consulting firms claimed to represent Western interests, they were mostly concerned with generating profit for themselves. As Wedel points out, the overwhelming share of Western aid ended up in the coffers of the consulting companies. The often overpaid and underqualified consultants demonstrated their capitalist talents by constructing a nearly foolproof laundering mechanism. The secret to the scheme was the blurred lines between academic experts, private consultants, and government bureaucrats. For instance, Jeffrey Sachs, as economic/academic expert, could work with his former colleague, high-level bureaucrat Larry Summers, to ensure that Sachs's private consulting firm would get the contract for the privatization agenda for country X. The intended recipients were left out.The consulting firm's Eastern colleagues soon cracked the code as to how the aid game was played. Because the West was reluctant to work with those who once espoused Marxist principles, little coordination or collaboration existed between consulting firms and former government officials. Clever former communist bureaucrats (now free market champions) created their own private consulting firms. These private firms could then work with their Western counterparts and take their cut of any remaining aid.Because the bulk of aid money was not funding the rebuilding of factories, roads, or schools, but rather ephemeral advice, there were questions as to how to measure progress. If nothing else, the Western consulting firms were experts at creating glossy brochures and hosting high-level meetings where their future successes could be touted and discussed. …