Collision and Collusion: The Strange Case of Western Aid to Eastern Europe

by Janine R. Wedel

When the Soviet Union's communist empire collapsed in 1989, a mood of euphoria took hold in the West and in Eastern Europe. The West had won the ultimate victory--it had driven a silver stake through the heart of communism. Its next planned step was to help the nations of Eastern Europe to reconstruct themselves as democratic, free-market states, and full partners in the First World Order. But that, as Janine Wedel reveals in this gripping volume, was before Western governments set their poorly conceived programs in motion. Collision and Collusion tells the bizarre and sometimes scandalous story of Western governments' attempts to aid the former Soviet block. He shows how by mid-decade, Western aid policies had often backfired, effectively discouraging market reforms and exasperating electorates who, remarkably, had voted back in the previously despised communists. Collision and Collusion is the first book to explain where the Western dollars intended to aid Eastern Europe went, and why they did so little to help. Taking a hard look at the bureaucrats, politicians, and consultants who worked to set up Western economic and political systems in Eastern Europe, the book details the extraordinary costs of institutional ignorance, cultural misunderstanding, and unrealistic expectations.

Genres: History, Economics

304 pages, Paperback

First published October 15, 1998

Reviews

[Jonathan · Rating 4 out of 5]

Interesting book about the US's aid practices after the cold war era during rebuilding in Russia and Eastern Europe. Jeffery Sachs and others from Harvard are mentioned throughout the book for the role they had in the rebuilding effort in a not so positive light.

[Ipswichblade · Rating 3 out of 5]

Interesting book but seemed to be telling the same story over and over

[Austin Barselau · Rating 4 out of 5]

Collision and Collusion is a critical examination of how Western aid to Central and Eastern Europe after the fall of the Soviet Union, though motivated by good intentions, often produced unintended and damaging consequences. Janine R. Wedel, professor of anthropology at George Mason University, shows how poorly conceived projects, combined with cultural misunderstandings, failed to create lasting partnerships and instead generated impasses that frustrated the mission of Western donors—the promotion of market economies and democracy. Based on intensive fieldwork with donor agencies, recipient institutions, and the spaces between them from 1991 to 2000, Wedel’s self-described ethnography convincingly demonstrates that relationships and trust must be central to any successful aid strategy.

Wedel first examines the interplay between Western donors and local elites in the three “model” Central European countries—Poland, Czechoslovakia, and Hungary—where the “return to Europe” was seen as most achievable. She outlines three phases of the donor-recipient process: triumphalism (high hopes for quick reform and idealized views of the West), disillusionment (recognition that donor incentives were misaligned with recipients’ needs), and eventual adjustment to this reality. Eager for simple solutions and rapid relief, these countries instead encountered a brigade of consultants, lawyers, and economists, largely funded by U.S. dollars. She provides vivid examples of “Beltway Bandits”—large Washington, D.C.–based firms—and the “Marriott Brigade” of fly-in, fly-out consultants who, while comfortably lodged in international hotels, offered hurried, standardized solutions that ignored cultural sensitivities and entrenched mentalities. She cites one Polish official who likened the result to “a surgeon who comes, does his work without talking to the patient, and leaves without checking to see whether the operation was successful.”

Wedel then shifts to Russia, where the U.S. government delegated much of its reform agenda to the Harvard Institute for International Development. Here, aid flowed through a network of self-styled Russian reformers known as the “Chubais Clan.” With substantial USAID backing, these efforts accelerated privatization but fostered what Wedel describes as “tycoon capitalism,” characterized by looting, asset stripping, and capital flight. Prominent Harvard economists, including Jeffrey Sachs and Lawrence Summers, appear in Wedel’s account of an aid regime in which oversight was lax and deniability institutionalized.

Ultimately, Collision and Collusion underscores the importance of trust-building and social networks in shaping aid strategies. Drawing on hundreds of interviews and informal conversations, Wedel reveals how the opportunities of the post-Communist transition were too often exploited for the wrong reasons. Donors, flush with U.S. funding and armed with blueprints ill-suited to local conditions, failed to align their incentives with the actual needs of recipients. The resulting “collision” of contrasting expectations not only failed to facilitate a smooth transition to democracy and market reform, but in many cases deepened confusion and instability.