Can External Donors Build State Capacity?

This is from another but related policy area. External support for AIDS treatment programs in developing countries saves people from dying in the short-run. There is a tension here in that there is a simultaneous need to build up the health system capacity of these countries. Perhaps with sufficient funding for both, we can simultaneously save lives and build capacity. This task of health system capacity has been recognized in recent funding proposals from the Global Fund. However, how skilled are we at the task of state-building? Maybe we do it better in health systems than other areas, but there are reasons to think that we in the West may not be very good at this.

Sebastian Mallaby has a recent op-ed on this, critiquing some of the transformational rhetoric in Condoleeza Rice’s recent speeches. Drawing on a recent book on governance by Francis Fukuyama, he writes:

The United States lacks the instruments to transform other societies, Fukuyama argues; to build nations you must first build institutions, and nobody knows how to do that. Conservatives, who have long preached the limits to what government can achieve with domestic social policies, should wake up to government’s limits in foreign policy as well.

The words of warning for state-building in Iraq may also be important in the health care sector. Without local sources of support, outsiders may be creating unsustainable dependencies, distributing funds and saving lives in the short-run without adequate support for domestic institution-building. Worse, these efforts may be self-defeating if the domestic political structure actively opposes the intervention (as may be happening some in S. Africa and Zimbabwe). This is not an argument against external support for HIV/AIDS treatment, but something to watch out for and be concerned about.

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