"Why Inequality Doesn't Threaten the CCP: A Rawlsian Take on Chinese Inequality," p. 51-7

Spring 2014, Volume 16

Dear Reader,

After another semester of hard work, I am proud to present the Spring 2014 Journal of Undergraduate International Studies. Each semester, we receive submissions from around the world pertaining to international [VWPJZ�HUK�P[�PZ�V\Y�LKP[VYPHS�Z[Hќ�[OH[�JVTIZ�[OYV\NO�[OL�HZZVY[TLU[�[V�ÄUK�[OL�IYPNO[LZ[�PU�\UKLYNYHK\H[L�YLZLHYJO��:OV^JHZLK�PU�[OPZ�PZZ\L�are academic pieces, both innovative in their approach and thought-provoking in their arguments; the literature presented not only looks H[�J\YYLU[�HќHPYZ��I\[�HSZV�JVTWYPZLZ�OPZ[VYPJHS�^VYR�[OH[�YL�L]HS\H[LZ�preexisting frameworks.

In our eleventh year as a publication, a special thanks goes out to the Coddon Family Foundation and the L&S Honors Program; their continued support is a testament to the strength of our journal. David Coddon founded the journal as an undergraduate at the University of Wisconsin-4HKPZVU�PU�HU�LќVY[�[V�OPNOSPNO[�\UKLYNYHK\H[L�YLZLHYJO�PU�[OL�NSVIHS�arena. To close this issue is a guest article by Coddon, on page 69, about the transnationalization of the oil industry.

The other six submissions cover topics as diverse as aid in Palestine to piracy in Somali. I hope you enjoy volume 16 of the journal, as much as we enjoyed putting it together. Stop by next semester for another round of international insight. Until then…

Sophia Jones Editor-In-Chief

Journal of Undergraduate International Studies

Letter from the Editor

32014Spring

The views expressed in JUIS are those of the authors alone, and do not mean an editorial consensus. The authors are responsible for all information contained in articles. The editors do not assume responsibility for the validity of the facts expressed in the articles.

JUIS is published bi-annually and its contents are copyrighted and cannot be reproduced or re-written in any way without written permission.

The Journal of Undergraduate International Studies would like to acknowledge its founder HUK�ÄYZ[�LKP[VY�PU�JOPLM��+H]PK�*VKKVU��;OL�ÄYZ[�[^V�PZZ\LZ�VM�[OPZ�QV\YUHS�^LYL�W\ISPZOLK�with the generous support of the University of Wisconsin-Madison Leadership Trust and continued publication is made possible through the Coddon Family Foundation. Additional support is provided by the University of Wisconsin-Madison College of Letters and Science /VUVYZ�7YVNYHT��[OL�6ѝJL�VM�[OL�=PJL�7YV]VZ[�MVY�;LHJOPUN�HUK�3LHYUPUN��[OL�+LWHY[TLU[�VM�Political Science, the Global Studies Program, Publications Committee, and the University of Wisconsin-Madison Library System.

The cover photograph was taken by Ashley Entringer, University of Wisconsin-Madison.

Surf's Up. Walking along the shores of Muizenberg Beach, one of Cape Town’s most popular HUK�ZOHYR�PUMLZ[LK�Z\YÄUN�HYLHZ��0�JHTL�HJYVZZ�H�SVUN�YV^�VM�ILH\[PM\S�ILHJO�O\[Z��;OL�various colors struck, as representative of the racial diversity present in South Africa, and how in recent years South Africans have demonstrated the ability to come together as one “Rainbow Nation.”


For questions, comments, or feedback write to:

[email protected]

http://juis.global.wisc.edu/

JUIS4

Journal Staff

Sophia JonesEditor-in-Chief, Layout DesignerSophia Jones is a senior completing her undergraduate degree in Communication Arts and Art History at the University of Wisconsin-Madison, where she will graduate in 2014. She works at WSUM, the local studet radio station as their Website and Social Media Director and is the Gallery Coordinator for the Overture Center for the Arts. In her spare time in Madison, she co-hosts the weekly radio show El Monde E Musiv, a world music program on WSUM 91.7 FM Madison Student Radio. Outside of school, she enjoys practicing yoga, reading, and cooking.

Grace LeppanenManaging EditorGrace is a sophomore majoring in Political Science. She plans to attend law school.

David GlicksteinEditor, Grant CoordinatorDavid is a senior majoring in Political Science, Music Performance, and Latin. Within political science, he has a particular fascination with nuclear policy, terrorism, and the Israeli-Palestinian JVUÅPJ[��<WVU�NYHK\H[PVU��OL�OVWLZ�[V�

continue his studies on these topics. Besides having a passion for politics and PU[LYUH[PVUHS�HќHPYZ��OL�PZ�HU�HK]VJH[L�MVY�classical music and frequently attends the symphony and other concerts.

Emily PankenEditor, Social Media CoordinatorEmily, a freshman from White Plains, New York is undecided in her major. Her main interests include journalism and international relations with a JVUJLU[YH[PVU�PU�4PKKSL�,HZ[LYU�HќHPYZ��She hopes to study abroad in Israel her junior year and further explore the Israeli-7HSLZ[PUPHU�JVUÅPJ[�HUK�WLHJL�WYVJLZZ��Upon graduation she would love to work at a news station either as a foreign news correspondent or a producer of a news show.

Sarah KvithyllEditorSarah is a senior majoring in Political :JPLUJL�^P[O�H�JLY[PÄJH[L�PU�(MYPJHU�Studies. She has spent time studying JVUÅPJ[�YLZVS\[PVU�HUK�KLTVJYH[PaH[PVU�in Israel and South Africa, respectively. After she graduates in May 2014, she would like to move to Washington DC to work with democratizing countries to improve the quality of their elections and reduce corruption within their

governments. In her free time, she enjoys listening to good music and watching movies.

Elizabeth StephensEditor Elizabeth Stephens is a freshman, undecided in her major. She is most PU[LYLZ[LK�PU�^VYRPUN�PU�[OL�ÄLSK�VM�journalism or studying creative writing or English. Outside of school she enjoys running, writing, and spending time with family and friends. She hopes to study abroad in England as a junior or senior.

Ainsley NelsonEditorAinsley is a freshman at the University of Wisconsin-Madison and has not yet decided on her major. She is interested in international studies and learning foreign languages. Her free time is spent hanging out with friends, reading, dancing, eating, or listening to music. She is from Door County, Wisconsin and spends her summers working in area restaurants.

Hannah KitslaarEditorHannah is a freshman from Green Bay, Wisconsin, pursuing majors in International Studies with a focus in


52014Spring

global security, legal studies, and Russian. She will begin the Russian Flagship Program at the start of the Spring 2014 semester. In coherence with the program, she will spend six weeks studying at Lomonosov Moscow State University in the summer of 2015 as a prerequisite to the capstone academic year of study at St. Petersburg State University. An enthusiast of foreign languages and national security, she hopes to pursue a career in the Intelligence Community after graduation. Outside of class she enjoys exploring all [OH[�[OL�JP[`�VM�4HKPZVU�OHZ�[V�VќLY�

Maham HasanEditor Maham is a Sophomore and Spring se-mester transfer student from Oman, who originally comes from Pakistan. She is a 7Z`JOVSVN`�THQVY�^P[O�ZWLJPÄJ�PU[LYLZ[Z�in social and behavioral psychology. She hopes to one day be a professor at a University, with her own research lab. Other than that she enjoys writing snarky literature columns every week for The Daily Cardinal, classic rock, binge watch-ing movies and traveling. Currently she is WSHUUPUN�OLY�ÄYZ[�JYVZZ�JV\U[Y`�(TLYPJHU�road trip.

Yi JiangEditorYi is a freshman majoring in Political Science, focusing on international relations, economics, and history, with particular interest in international development concerning global poverty HUK�OLHS[O�PULX\P[`��ZWLJPÄJHSS`�PU�Asia. She is also studying French and Mandarin Chinese. When she has spare time, she enjoys creative writing, painting, reading, wandering outside, and pursuing graphic design. In the future she plans on attending graduate school and working to develop sustainable solutions to rural poverty.


JUIS6


72014Spring

pages 8-22 1. Foreign Funding to Palestine: Perceptions of International Aid, How it Demobilized Civil Society, and What Are the Next Steps? by Lexi Doolittle

pages 23-29 2. Football in Bosnia: As an Aim towards Reconciliation by Sebastian Dutz

pages 30-38 3. An Ambiguous Lesson: Tracing the Munich Analogy in Anglo-American Relations

by Dexter Fergie

pages 39-50 4. Distinguishing Pinochet and the Proceso: International and Domestic Frameworks of Analysis for the Rise of Neoliberalism under Authoritarianism in the Southern Cone, 1973-1981 by Hannah Mullen

pages 51-57 5. Why Inequality Doesn't Threaten the CCP: A Rawlsian Take on Chinese Inequality

by Sam Sussman

pages 58-68 6. Global Shipping and the War on Somali Piracy

by Elizaveta Klimenko

pages 69-80 7. Deconstructing a Transnational Petroleum Order by David Coddon

Table of Contents

Spring 2014, Volume 16

JUIS8

alestinians are a small group of thoughtful, committed citizens, who seek to change their part of the world, but are prevented from facilitating that transformation by a broken system of foreign aid that ZPT\S[HULV\ZS`�Z\Z[HPUZ�HUK�KPTPUPZOLZ�[OLPY�SP]LZ��;OL�ÄST�+VUVY�6WP\T��WYVK\JLK�I`�.LVYNL�(aHY� HUK�4HYPHT�:OHOPU��KLZJYPILZ� MVYLPNU�HPK� [V�7HSLZ[PUL�HZ�NVSKLU�OHUKJ\ќZ!� L_WLUZP]L��

but restrictive and imprisoning for the Palestinian people. Aid currently given to the Occupied Territories (the Gaza Strip and the West Bank) saves lives, but it is so poorly rendered that it obstructs independent economic KL]LSVWTLU[��LќLJ[P]L�NV]LYUTLU[HS�JOLJRZ�HUK� [OL�L]VS\[PVU�VM�JP]PS� ZVJPL[ �̀�^OPSL�JVUJ\YYLU[S`�KYP]PUN� [OL�Palestinian people deeper into impoverishment and despair. A few voices within Palestinian civil society respond LK�[V�HPK�PULќLJ[P]LULZZ�I`�JHSSPUN�MVY�H�YLMVYT�VM� PU[LYUH[PVUHS�HPK�HUK�H�YL]P]HS�VM�KVTLZ[PJ�JVTT\UP[`�based aid, through which Palestinians can reclaim the trajectory of their own national development. This

original research explores the literature evaluating the issues and results of giving foreign aid to Palestine, the local WLYJLW[PVUZ�VM�[OL�LќLJ[Z�VM�[OH[�HPK��HUK�the recent trend in remobilizing civil society in the call to reform aid to the occupied Palestinian territories (OPT).

;OLZL� ÄUKPUNZ� PUKPJH[L� [OH[� [OL�majority of Palestinians recognize the importance of humanitarian foreign aid for their quality of life, but are unhappy with how that aid is rendered, to which organizations and projects that aid is given, and the strict donor preconditions for organizations receiving the aid. The amount of aid and the rendering procedures have demobilized Palestinian

civil society, promoting a national discourse of defeatism and lack of trust in the government and NGOs’ abilities [V� HќLJ[� ZPNUPÄJHU[� WVSP[PJHS� JOHUNL�� ;OPZ�bleak prognosis of foreign aid is somewhat tempered by recent grassroots trends within the West Bank and Gaza Strip to take back projects and fund management on the community level. Spearheaded by the Dalia Association, this movement is spreading across the West Bank, Gaza Strip, and diaspora groups, and is igniting the reemergence of a sense of responsibility and accountability in villages and neighborhoods seeking to develop their own economies and political agency.

Evaluated over the course of this

^VYR�HYL�KPќLYLU[�[`WLZ�VM�X\HU[P[H[P]L�HUK�qualitative data. First the major schools of thought are outlined concerning the LќLJ[Z� VM� MVYLPNU� M\UKPUN� [V� 7HSLZ[PUL��presenting a hypothesis, this paper follows with a methodological approach, highlighting the major sources of data. Findings and evaluations are presented using public opinion survey data, foreign HPK�JHWP[HS�ÅV^�YLWVY[Z�HUK�]HYPV\Z�TLKPH�representations of foreign aid to Palestine. Additionally, summarized are positive perspectives of foreign aid to the West Bank and Gaza and the burgeoning small-ZJHSL�5.6�WYVQLJ[Z�LќLJ[PUN�JOHUNL��;OPZ�paper concludes by positioning this work within the greater scholarly discourse,

Lexi Doolittle. Lexi Doolittle is a senior at the University of Richmond, double majoring in Arabic Studies and International Studies with a concentration in World Politics and Diplomacy. Lexi is passionate about travel and developed the guiding questions for this body of research while studying abroad in Morocco, Jordan and Israel. Lexi would like to thank Dr. Monti Datta, her senior thesis advisor, for his tireless support and guidance throughout the completion of this work.

P

Foreign Funding to Palestine:

by Lexi DoolittlePerceptions of International Aid, How it Demobilized

Civil Society, and What Are the Next Steps?

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discussing how to continue this research given greater time and resources, and VќLYPUN�WVSPJ`� YLJVTTLUKH[PVUZ� MVY�OV^�the system of foreign aid to Palestine should evolve.

Literature Review Palestine is an occupied territory

and is thus an exception to the traditional Westphalian notions of state and

NGOs, and many politicians would like [V� WLYZVUHSS`� JHWP[HSPaL� VU� [OH[� PUÅ\_� VM�capital.

To understand the post-Oslo transformation of Palestinian society, it PZ� ULJLZZHY`� [V� ÄYZ[� L_HTPUL� [OL� THQVY�schools of thought regarding the role HUK� LѝJHJ`� VM� 5.6Z� ^P[OPU� 7HSLZ[PUL��There are three major schools of thought, all of which agree that Palestine needs MVYLPNU� HPK�� I\[� KPZHNYLL� VU� [OL� LѝJHJ`�of the funding to Palestinian NGOs (many of which have collaborated to create a network under the name PNGO). The ÄYZ[� ZJOVVS�� [OL� ,TWV^LYTLU[� :JOVVS��posits that international funding of NGOs

is positive, empowering, and perhaps democratizing. The second school, [OL� 0ULќLJ[P]L� :JOVVS�� HZZLY[Z� [OH[�aid provided to NGOs has a negative impact on the formation of civil society. ;OL� ÄUHS� ZJOVVS�� [OL� 7VSP[PJHS� )HSHUJL�School, propounds that although NGOs PU� 7HSLZ[PUL� HYL� UV[� HZ� LќLJ[P]L� HZ� [OL`�could be in serving humanitarian needs, they do provide a modest political check and balance on the virtually unchallenged Palestian National Authority (PNA).

The Empowerment School argues that NGOs are successful in both serving humanitarian needs and empowering Palestinians to campaign for their rights utilizing Western aid. This school does not have a large following outside the immediate Palestinian NGO community. NGO leaders see their organizations as providing the majority of Palestinians with health care, education and rehabilitation services, which for them has the dual LќLJ[� VM� Z\Z[HPUPUN� [OL� SP]LZ� VM� THU`�Palestinians, and enhancing NGO legitimacy in Palestine.2 NGOs are working to develop Palestinian civil society separate from Israel through democracy, lobbying and empowerment workshops. (S[OV\NO�5.6Z�Z[Y\NNSL�^P[O� [OL�KPѝJ\S[�relationship between Israeli law and the 7(�� [OPZ� ÄYZ[� ZJOVVS� JVU[LUKZ� [OH[� [OL�organizations’ struggles promote positive civil society development and foster NGO legitimacy.3

The second school of thought, the 0ULќLJ[P]L� :JOVVS�� THUPMLZ[Z� PU� YLZLHYJO�conducted by Manal Jamal in “Democracy

"This research delves into how foreign funding has transformed Palestinian civil society since 1994 (when

the Oslo Peace Accords were signed) with regards to the WVSP[PJHS�LɈLJ[Z�VM�5.6�WYVMLZZPVUHSPaH[PVU��HUK�OV^�[V�better render aid to promote positive mobilization within

civil society."

sovereignty. Palestine’s exceptional status creates circumstances in which the role of non-governmental organizations (NGOs) within the West Bank and Gaza PZ� YLKLÄULK�� ]HYPLK� HUK� ZPNUPÄJHU[S`� SLZZ�traditional than it would be in most other developed or developing countries. This research delves into how foreign funding has transformed Palestinian civil society since 1994 (when the Oslo Peace Accords were signed) with regards to the political LќLJ[Z� VM� 5.6� WYVMLZZPVUHSPaH[PVU�� HUK�how to better render aid to promote positive mobilization within civil society. It is important to note that NGOs in Palestine are not necessarily non-governmental, as

the Palestinian government often seeks [V� ILULÄ[� TVUL[HYPS`� MYVT� HU� HSSPHUJL�with NGOs. Politicians in the Palestinian Authority (PA), the governmental structure in the West Bank, have developed close relationships with NGOs to capitalize on foreign funding, generating an expanding attitude of “BYO-NGO” in political circles.1

There is a substantial amount of money ÅV^PUN� PU[V� 7HSLZ[PUL� LHYTHYRLK� MVY�

Foreign Funding to Palestine: Perceptions of International Aid, How it Demobilized Civil Society, and What Are the Next Steps? / Lexi Doo-little

JUIS10

Promotion, Civil Society Building, and the Primacy of Politics.” Jamal compares the role of foreign funding in the formation of civil society in Palestine to El Salvador, after country-wide peace accords. She ÄUKZ� [OH[� >LZ[LYU� KVUVY� HZZPZ[HUJL� KPK�LќLJ[P]LS`� WYVTV[L� H� Z[YVUN� JP]PS� ZVJPL[ �̀�when the peace accords were inclusive of all prominent parties within the society, but when the peace accords were exclusive, Western donor assistance further polarized and weakened civil society.4 Jamal proposes that El Salvador’s successful civil society is at least in part due to its PUJS\ZP]L� WVZ[�JVUÅPJ[� WLHJL� ZL[[SLTLU[��While civil society in Palestine is weak and polarized because the Oslo Accords were not inclusive to all Palestinians and ostracized those not aligned with the PLO at the time.

This Oslo exclusivity has created circumstances of unequal distribution of foreign aid, resulting in three types of NGOs working in Palestine: Liberal Moderate organizations, Fatah Clientalistic organizations, and the Opposition organizations. The Liberal Moderates are those who have supported the Oslo Accords, and as a result received ample foreign funding, allowing them to professionalize and create hierarchical relationships between themselves and grassroots mobilizers. The Fatah Clientalistic organizations are closely aligned with Fatah and maintain a clientalist relationship with the Palestinian government from which they derive [OL� THQVYP[`� VM� [OLPY� ÄUHUJPHS� Z\WWVY[��

The Opposition organizations (generally Leftist or Islamist) are perceived by Western donors to historically oppose at least part of the Oslo agreements, for which they are now shunned and denied funding. Opposition organizations must instead rely on zakat, community donations and support from Gulf States. They are almost exclusively grassroots in nature, and are thus more connected to the Palestinian population than either of the other types of organizations. In El Salvador, comprehensive and all-inclusive peace accords created circumstances in which foreign funding could support a strong multi-party civil society, whereas in Palestine, Jamal argues, the exclusivity of the Oslo Accords established a weak civil foundation, which was only further polarized and diminished by unequal Western funding to the Liberal Moderate organizations.5

;OL�ÄUHS�ZJOVVS�VM�[OV\NO[�YLNHYKPUN�foreign funding of Palestinian NGOs and civil society, the Political Balance School, is primarily based on the work of Rema Hammami in “NGOs: The Professionalisation of Politics.” 6 Hammami builds on Jamal’s work and posits that the continuation of unchallenged Fatah rule, beside a professionalized network of foreign-funded NGOs has created a political Palestinian discourse of defeatism. Foreign-funded Palestinian 5.6Z� JHU� HќVYK� [V� WH`� LTWSV`LLZ� MHY�above established labor market rates, creating a cadre of semi-professional NGO Z[Hќ� \UPU[LYLZ[LK� PU� W\YZ\PUN� NYHZZYVV[Z�

projects connected to the needs of the general population. This hierarchy undermines opportunities for mass political mobilization and diminishes the capacity of NGOs to check the power of the PA.7 The divide between the Western-funded Liberal Moderate NGOs in Palestine and Jamal’s more bottom-up Opposition organizations has fostered a “discourse of defeat” in Palestinian civil society, sanctioning Palestinian acceptance of hegemonic PA governance.

The Empowerment School supports the current model of foreign funding to NGOs in the West Bank and Gaza, places too much emphasis on the humanitarian impact of the funding, while disregarding its political implications. Articles, which praise NGO work in Palestine were almost exclusively written by Palestinians within the NGO network, who are therefore inherently biased and may seek to please Western donors. Therefore the Empowerment School is not concurrent to this research. This paper focuses on the schools discussed by Jamal and /HTTHTP�� [OL� 0ULќLJ[P]L� :JOVVS� HUK�the Political Balance School, combining their two perspectives as a foundation on which to further examine Palestinian civil society and foreign aid. Currently, foreign funding that supports Liberal Moderate organizations, which allegedly seek to promote democracy and social empowerment, is inadvertently inhibiting democratic progress. The unequal aid distribution makes organizations more accountable to foreign donors than to


112014Spring

Palestinians, discouraging fair competition, and creating a system, in which the needs of Palestinians are not represented by their government or their NGOs. Therefore, foreign donors are working against their own interests by uniquely supporting the organizations, whose projects align with the pro-Oslo Western discourse. This paper will further explain how donor aid can be appropriately allocated across all types of organizations to provoke Palestinian NGOs into strengthening their bases in civil society, attuning their projects to Palestine’s needs, concurrently reversing the national discourse of defeat.

Hypothesis

Poorly-rendered foreign aid to Palestine has thus far stagnated the development of civil society and resulted in negative economic development. Responses to these circumstances are the recent non-governmental organizational developments that promise an opportunity for the logical re-emergence of civil society and a system of checks and balances on the PA through a bottom-up reform approach. Organizations such as the Dalia Association spearhead this popular movement, and represent the potential for a burgeoning civil society that could provoke domestic and international aid reform. While overcoming many of the barriers to independent economic development in Palestine is conditional on Israeli law revisions, there may be a small opportunity for these types of organizations to obtain their aid reformation demands.

MethodologyPalestine is dependent on foreign aid,

as about one-third of their Gross National Income (GNI) is foreign capital, and most facets of the society, its health care and education services in particular, require constant infusions of foreign donations.8 Palestine is also a Westphalian black hole. The standard rules of governance, sovereignty and use of force do not apply in Palestine, and thus the territory is unique in its relationships with Israel and Western donors such as the European Union, the World Bank and the United States. These uncommon relationships provide a unique foundation on which to build an understanding of the perceptions HUK�LѝJHJ`�VM�MVYLPNU�HPK�^P[OPU�7HSLZ[PUL��By re-conceptualizing the dichotomy of domestic versus foreign aid, this paper focuses on foreign aid provided to domestic organizations. Utilizing the existing body of research regarding foreign aid and Palestine, focus here is on how and [V�^OVT�MVYLPNU�HPK� PZ�NP]LU��HUK�HќLJ[Z�the formation, economic development and democratization process of Palestinian society. The evolution from an initial YLZLHYJO� [VWPJ� SLHK� [V� [OL� ÄUHS� X\LZ[PVU!�how has foreign aid rendered to non-governmental Palestinian organizations demobilized civil society, and further, how are Palestinian NGOs reacting to this demobilization?

The constant challenge of researching Palestine in particular is that the idea of Palestine itself is polarizing, compelling

scholars and researchers alike to scrutinize all sources of information for its biases. There are additionally a countless number of topics concerning Palestine and the Palestinian-Israeli relationship, which due to space and time are not thoroughly HKKYLZZLK��;V�ILZ[�KPZZLJ[� [OL�LќLJ[Z�VM�foreign funding on Palestinian civil society, H�U\TILY�VM�KPќLYLU[�[`WLZ�VM�ZV\YJLZ�HYL�\ZLK�[V�IHSHUJL�JVUÅPJ[PUN�WLYZWLJ[P]LZ��

Research is based on information collected from scholarly articles and books focused on Palestine, civil society, foreign funding and donor reform. The works of major scholars such as Rema Hammami, Benoit Challand and Manal Jamal provide scholarly perspectives that position the social impact of foreign funding within the greater global scholarly discourse. This paper also delves into two economic assessments conducted by the World Bank: Stagnation or Revival? Israeli Disengagement and Palestinian Economic Prospects and Four Years - Intifada, Closures and Palestinian Economic Crisis, for a deeper understanding of Palestinian ÄZJHS� JOHSSLUNLZ� HUK� [OLPY� YLSH[PVUZOPW�with foreign funding. Further evaluated is a decade long survey of donor funding to Palestine conducted through the Palestine Economic Policy Research Institute (MAS) with funding from the World Bank. This study, Tracking External Donor Funding to Palestinian Non-Governmental Organizations In the West Bank and Gaza 1999-2008, was compiled and analyzed I`�1VZLWO�+L=VPY�HUK�(SHH�;HY[PY��(S[OV\NO�


JUIS12

the entirety of their raw data is unavailable for public viewing, much of their information can be accessed and evaluated in their report. Additionally interviewed is Mr. ;HY[PY� PU�HU�LќVY[�[V�IL[[LY�\UKLYZ[HUK�OPZ�methodology and opinions on the future of foreign funding to Palestine.

Also looked at is raw data from the United States Organization for Economic Cooperation and Development (OECD), which publishes statistics regarding the impact of reforms made under the 7HYPZ� +LJSHYH[PVU� VU� (PK� ,ќLJ[P]LULZZ�signed in 2005. The Paris Declaration is a major international treaty that seeks to reform international aid on the basis VM� Ä]L� WYPUJPWSLZ!� V^ULYZOPW�� HSPNUTLU[��harmonization, results and mutual accountability.9 The OECD statistics published in 2010 are a measure of the LѝJHJ`� VM� [OL� �� 7HYPZ� +LJSHYH[PVU�reforms. The OECD systematically measures data such as: what countries and organizations are giving aid, how much aid is distributed to the West Bank and the Gaza Strip, what form does that aid take, and how much of the aid is untied? In addition this paper uses the results of public opinion surveys from Fafo conducted in both the West Bank and the Gaza Strip. Originally founded as the Norwegian Confederation of Trade Unions, Fafo today operates as a tool to develop and disseminate knowledge about living and working conditions, economic data, and developmental challenges. Fafo uses sample sizes of about 1,000 people in each territory and provides the original

questionnaires and actual respondent numbers. Focus is particular to their most recent study, conducted and published in 2010, concerning Palestinians’ attitudes towards foreign donors, receiving aid from those donors, and Palestinians’ opinions of their own NGOs and government. This more representative data supplies a solid and objective bedrock from which to evaluate sources that may be less thoroughly substantiated, but are more closely tied to the current pulse of Palestinian civil society.

Also numerous Palestinian blogs and newspapers that regularly update their articles and provide competing WLYZWLJ[P]LZ� VM� [OL� KPќLYLU[� JOHSSLUNLZ�facing Palestinians daily are referenced. These blogs are easily accessible on the internet to both Arabic and English speakers, and when possible, the Arabic blogs and political cartoons are translated here to include as much of the Palestinian discourse as possible. These blogs are used as passive virtual interviews to gather opinions regarding the rendering of foreign aid and its ability to mobilize, demobilize, HUK� HќLJ[� JOHUNL� PU� [OL� [LYYP[VYPLZ��Another source of public opinion and commentary was the documentary ÄST� +VUVY� 6WP\T� JYLH[LK� I`� [OL� [^V�aforementioned reporters who have produced multiple documentaries and written and photographed for al-Jazeera and other news outlets. In Donor Opium, a number of Palestinians are interviewed about their perceptions of foreign aid in Palestine. Their voices are used here to

better understand Palestinian perspectives on aid. This paper also examines the satirical play, “House of Yasmine,” which is a commentary on foreign aid written and performed by Palestinians.

As mentioned earlier, Alaa Tartir is interviewed, who co-wrote the MAS report “Tracking Foreign Funding,” with Nora Lester Murad, a founder of the Dalia Association. These interviews are used to inform both the scholarly research and media research conducted here. The combination of scholarly articles, blogs, political cartoons, a documentary, a play, interviews and the World Bank assessments provides a thorough and balanced understanding of the challenges facing Palestinian civil society, as they relate to foreign funding. Not investigated is aid transparency, following the money from the donors’ hands to the Palestinian people, measuring what is spent where, who is hired for what type of projects, and how Palestinians engage with these projects. An entire portion of research could be devoted to the triangular relationship between Israel, the United States and Palestine, assessing the truth of perceptions of donor-imposed dominance, political conspiracies and the correlations between incidents of Palestinian violence, Israeli violence, suspension of foreign aid and the peace WYVJLZZ�� ;OL� HTV\U[� VM� JHWP[HS� ÅV^PUN�into Palestine is not trivial, and merely asking, “where is the money going?” does not adequately address the incredibly complicated Palestinian aid system.


132014Spring

FIGURE 1. Per Capita Foreign Aid to Palestine FIGURE 2. External Aid Distrubuted to Palestine

Findings: Understanding the Quantitative Data

7HSLZ[PUL�PZ�ÅVVKLK�̂ P[O�MVYLPNU�JHWP[HS�HUK��HZ�.YHWO�(�ZOV^Z��ÄN\YL�� P[� PZ�[OL�highest per capita recipient of foreign aid; however, that foreign aid is not enough to sustain more than 3 million people without further independent economic development. Unemployment rates hover at 30 percent in the Gaza Strip, one of the highest proportions in the world, and at 20 percent in the West Bank.10 Graph )� �ÄN\YL� �� YL]LHSZ� [OH[� [OL� THQVYP[`� VM�foreign aid goes to domestic governmental budget support, while only 10 percent of all foreign aid is given to Palestinian 5.6Z�� YLZ\S[PUN� PU� H� ��TPSSPVU� KLÄJP[� PU�the NGO sector as of 2006.11 Additionally, the 10 percent of aid which is awarded to Palestinian NGOs is unequally distributed between those PNGOs, with about 80

percent of the funding going to only 20 percent of the roughly 2,000 organizations.12 The 20 percent (about 400 NGOs) tends to comprise the Liberal Moderate organizations that continue to support the Oslo Accords, [OL�VѝJPHS�WLHJL�WYVJLZZ��HUK�Z\JJLZZM\SS`�adheres to Western stipulations and standards. The unequal dispensation of aid [V�5.6Z� PZ�H�JSLHY�JH\ZL�HUK�LќLJ[�VM� [OL�previously mentioned professionalization of the NGO community. Awareness of these ÄN\YLZ� PZ� [OL�ÄYZ[�Z[LW� [V^HYKZ� YLJVNUPaPUN�that aid reform is no small challenge in Palestine.

Understanding the intricacies of both [OL� PTTLUZL�HTV\U[�HUK�KLÄJPLUJ`�VM�HPK��combined with its lopsided distribution are PU[LNYHS�[V�KPZZLJ[PUN�P[Z�LќLJ[Z�VU�7HSLZ[PUPHU�perceptions of aid, Palestinian public opinion of aid, and the aid reformation process. Figure 3 and 4 demonstrate how Palestinians

view foreign aid and Palestinian NGOs, the graphs are created using Fafo data from public opinion surveys conducted in 2010. The variations in responses between the Gaza Strip (GS) and the West Bank �>)�� HYL� TVZ[� SPRLS`� K\L� [V� [OL� KPќLYLU[�political and humanitarian situations in the [LYYP[VYPLZ�� .HaH� OHZ� ZPNUPÄJHU[S`� OPNOLY�levels of poverty and unemployment, and the United Nations Relief Works and Agency in Palestine (UNRWA) is engaged throughout Gaza. The West Bank is in a slightly better economic situation, is less dependent on foreign aid, and does not have the same level of UN participation and engagement.

The majority of respondents, when asked about their opinions regarding the purpose and consequences of international assistance, felt strongly that it does help LHZL� [OLPY� Z\ќLYPUN� ��>)�� .:��


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but felt almost as strongly that it helps Israel continue the occupation, helps Palestine bear the burden of corruption and helps the donor countries impose their aims. Although the three additional sentiments are unfortunately concerning, they highlight the issues which civically-minded organizations can address to best engage and mobilize the Palestinian people. The second set of data that directly relates to Palestinian perception of international aid also calls attention to the challenges that grassroots organizations should seek to address. Just over 60 percent of respondents in both the West Bank and Gaza felt strongly that international assistance is only compensation from those responsible for the situation, and that it is humiliating

and hurts their personal pride. In the Gaza Strip, 60 percent of respondents had positive feelings towards international aid, whereas in the West Bank, fewer than half of the respondents felt that “it is always good to get help.”13 Looking forward, therefore, it would be most LќLJ[P]L� PM� TVIPSPaPUN� VYNHUPaH[PVUZ� ZLLR�to overcome the professionalization of NGOs by responding to how Palestinians feel about foreign aid. They should also tailor their calls for reforms on how that aid can be rendered to better respect the Palestinian people, and address concerns of domination through foreign funding.

A Case Study of the Conditionality of Foreign Aid: USAID

Most foreign aid, governmental and

Foreign Funding to Palestine: Perceptions of International Aid, How it Demobilized Civil Society, and What Are the Next Steps? / Lexi Doolittle

non-governmental alike, to Palestine is subject to extreme preconditions by the donor nations and many PNGOs are reluctant to agree to these conditions in order to receive the aid. An examination of the particularly stringent United States Agency for International Development (USAID) preconditions reveals why there is a stigma for PNGOs to accept most foreign governments’ aid in particular. A report published through the Congressional Research Service by Jim Zanotti outlines the intricacies of rendering USAID to Palestine, which make it especially exasperating for Palestinians. The primary precondition of USAID is that the funds cannot be given to any organization, committee or group at all associated with Hamas or the Palestine Liberation Organization (PLO). This is especially problematic as Hamas is the

FIGURE 3. Opinions Regarding International Assistance in the West Bank and the Gaza Strip

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FIGURE 4. Perceptions of International Assistance in the West Bank and the Gaza Strip

Foreign Funding to Palestine: Perceptions of International Aid, How it Demobilized Civil Society, and What Are the Next Steps? / Lexi Doolittle

elected party governing the Gaza Strip, which is home to about 1.7 million people, half of all Palestinians. The United States has a very clear policy of not supporting those whom they label terrorists, and Hamas is designated by the United States as a Foreign Terrorist Organization, a Specially Designated Terrorist, and a Specially Designated Global Terrorist. While it may be understandable why the United States government would not fund organizations and individuals who seek to subvert its own national security, Palestinians take issue with how the terror label is designated.

4HU`�7HSLZ[PUPHUZ�ÄUK�[OH[�[OL�<UP[LK�States’ policies that classify terrorists, versus non-terrorists, are not equally applied across political alliances. Most Palestinians believe that the actions of Hamas, the PLO, and those who violently WHY[PJPWH[LK� PU� [OL� PU[PMHKHZ�^LYL� Q\Z[PÄLK�on the grounds that the Israeli military is

enforcing an unjust occupation and daily violating their human rights.14 Therefore, many Palestinians perceive their violent acts such as throwing stones at tanks, VY�ÄYPUN�YVJRL[Z�H[�0ZYHLS�UV[�HZ�[LYYVYPZT��but as proportional responses to the violence perpetrated against them using the weapons available to them.15 USAID conditionality also maintains that no funding may be given to a power-sharing government that includes Hamas as a

member, or over which Hamas exercises ¸\UK\L� PUÅ\LUJL¹� ¶� [OH[� PZ�� \USLZZ� HSS�ministers have accepted both of the following two principles: 1) recognition of “the Jewish state of Israel’s right to exist” and 2) acceptance of previous Israeli-Palestinian agreements.16

USAID restrictions beyond the Hamas [LYYVYPZ[�KLZPNUH[PVU�LќLJ[P]LS`�LUZ\YL�[OL�impossibility of democratic development and accountable governance. A further

"The preconditions also forbid the Fatah government MYVT�JVSSHIVYH[PUN�^P[O�P[Z�.HaH�JV\U[LYWHY[��/HTHZ��

and make the PA accountable to foreign nations rather than to its own people. This misplaced accountability WHYHKV_PJHSS`�JVTWYVTPZLZ�[OL�ÅLKNSPUN�7HSLZ[PUPHU�

democracy."

FIGURE 3. Opnions in the Purpose and Consequences of International Assistance in the West Bank and the Gaza Strip

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precondition of USAID stipulates that it cannot be provided to “support a future Palestinian state” unless the secretary of Z[H[L� JLY[PÄLZ� [OH[� [OYLL� JVUKP[PVUZ� OH]L�been met for the plans.17 The governing entity of the state must demonstrate “a ÄYT�JVTTP[TLU[�[V�WLHJLM\S�JVL_PZ[LUJL�with the state of Israel, that the state is “taking appropriate measure to counter [LYYVYPZT� HUK� [LYYVYPZ[� ÄUHUJPUN�¹� HUK�ÄUHSS`�[OH[�[OL�Z[H[L�PZ�^VYRPUN�^P[O�V[OLY�countries in the region to “vigorously W\YZ\L�LќVY[Z� [V�LZ[HISPZO�H� Q\Z[�� SHZ[PUN��and comprehensive peace in the Middle East that will enable Israel and an independent Palestinian state to exist.”18 These preconditions demonstrate how aid is used to maintain the current power balance between Israel and Palestine and undermine any attempt at sovereignty for [OL� 7(�� ;OL� ÄYZ[� JVUKP[PVU� PSS\Z[YH[LZ� [OPZ�inequity because the “demonstration of H� ÄYT� JVTTP[TLU[� [V� WLHJL� PU� VYKLY� [V�support a future Palestinian state” imposes restrictions on aid given to the Palestinian government, which is not applied to aid given to the Israeli government. The preconditions also forbid the Fatah government from collaborating with its Gaza counterpart, Hamas, and make the PA accountable to foreign nations, rather than to its own people. This misplaced accountability paradoxically compromises [OL� ÅLKNSPUN� 7HSLZ[PUPHU� KLTVJYHJ �̀� ;OL�United States is not the largest contributor of aid to Palestine, but its capital is important to sustaining life in Palestine, and aid suspension because of non-

compliance is a serious threat. The threat is enough to force the Fatah government to accept the Israeli-U.S. political position, instead of accurately representing the desires of the Palestinian people. In a political situation such as Palestine’s, this creates even further distance between the “democratic” government and the people, forcing Palestinians to rely on those few NGOs, who are not subject to similar foreign aid preconditions, to represent them, and to develop projects for their ULLKZ�V\[ZPKL�VM�>LZ[LYU�PUÅ\LUJL��

USAID is additionally poorly rendered because it is misappropriated to projects to which the aid preconditions preclude success. Zanotti’s report cites that much of the USAID “assistance is in direct support of the PA’s security, governance, development, and reform programs aimed at building Palestinian institutions in advance of potential statehood.”19 It is the epitome of the Palestinian aid-dependence conundrum that the U.S. annually pours an average $170 million into developing PA-Fatah governance, reform, and advancing the possibility of statehood, while the conditions of USAID simultaneously prevent serious Palestinian independent political action against the Israeli state, which occupies the territories. USAID purportedly aims to help Fatah develop independent governance, but simultaneously requires that it pledges allegiance to Israeli political thought, accepts all past peace agreements and ignores the Gaza Strip. The United States has some of the most stringent

aid-recipient restrictions, but it is not the only nation that imposes these types of restrictions on the Palestinian government and the PNGOs. These constraints are meant to give the donor state oversight, but in the Palestinian situation, where there is not a strong and representative NV]LYUTLU[��[OLYL�HYL�ZL]LYL�YHTPÄJH[PVUZ�[V� [OLZL� JVUKP[PVUZ�� ;OL� YHTPÄJH[PVUZ�paradoxically inhibit democratic progress, infringe on humanitarian relief and highlight short-term projects, without providing for long-term development.

Perceptions of Foreign Aid in the Media: A Drugged State

Examples of how the preconditions of foreign aid have demobilized civil society, inhibited democratic progress, and prevented independent economic development are evident throughout the reporting media within and about Palestine. Donor Opium depicts how aid is misappropriated in Palestine, funds meaningless projects, perpetuates a broken political system and keeps the Palestinian people in a listless drugged state of hopefulness. Before the Oslo Accords, about half of all Palestinians worked in the agricultural sector, growing enough food for their own needs and making a living selling and exporting their surplus.20 Today, 16 percent of the total labor force works in agriculture, and the sector represents only 4 percent of the West Bank's GDP.21� ;OL� KPќLYLUJL� JHU�be accounted for by the Oslo Accords, which gave Israel complete control of the


172014Spring

water resources and the majority of the land in the West Bank, inhibiting further agricultural development.22 According to the World Bank, if Palestinians gained access to 3.5 percent of the Israeli controlled Oslo-designated Area C, about 12,500 acres of uncultivated land, they could agriculturally generate one billion dollars (USD) of revenue annually.23 Instead of addressing the land inequities and economic possibility of expanding the agriculture sector, donor funded projects, which focused on constructing industrial zones for technological plants never became operational, resulting in even less land for agricultural use. These conditions lead to further dependence on foreign aid, rather than the development of an independent economy.

Donor Opium documents how this dependence in turn further professionalized the NGO network, widening the chasm between the grassroots mobilization LќVY[Z� H[[\ULK� [V� [OL� WLVWSL»Z� ULLKZ��and the organizations implementing donor-dictated projects. It shows how the organizations which more readily receive foreign capital, the Liberal Moderates cited PU�[OL�0ULѝJPLU[�:JOVVS��HYL�VM[LU�MVJ\ZLK�on expanding Palestinian democratization through empowerment workshops. The workshops focus on teaching Palestinians how to lobby their representatives, generate petitions and take part in creating laws. All of these skills are important, but their usefulness is limited to a functioning democratic government, which represents and responds to the people. The classes are therefore misdirected donor-driven

exercises that ignore the immediate needs of Palestinians. As one NGO worker in 7HSLZ[PUL� YLÅLJ[LK� PU� ¸0U[LYUH[PVUHS� (PK�Hurts Palestinian Civil Society,” “I can’t go into a Bedouin community that doesn’t even have water for their animals and give them a workshop about democracy or computer skills.”24 This sort of donor

directed project implementation leads to many Palestinians considering foreign aid as referred to in Donor Opium to be a set VM� ¸NVSKLU� OHUKJ\ќZ�¹25 These golden OHUKJ\ќZ� HYL� ZOPU`� HUK� L_WLUZP]L�� I\[�[OL`�HYL�OHUKJ\ќZ�UVUL[OLSLZZ��SVJRPUN�PU�a broken political and economic system, which sustains Palestinians’ immediate needs without addressing the issues underlying post-Oslo society and providing for the future of the West Bank and Gaza.

Frustration with this imprisoning dependence has also been satirically

portrayed on stage in a collaborative LќVY[� IL[^LLU� [OLH[LYZ� PU� 9HTHSSHO�and Jerusalem. The play, called “House of Yasmine,” or “Beit Yasmine” in Arabic, depicts how donor aid sidelines Palestinian opinions and undermines civil society.26 “House of Yasmine” is the story of Yasmine, a UN worker who is critically

wounded by a sniper shot, which forces her family and friends to seek outside medical assistance. Her loved ones JVU[HJ[� H� MVYLPNU� VѝJPHS�� ^OV� ZH`Z� [OH[�she can help, and after a long period of time she eventually procures a “green TLKPJPUL�¹� ([� ÄYZ[�� @HZTPUL»Z� SV]LK� VULZ�distrust the “green medicine” and ask [OL� MVYLPNU� VѝJPHS�� ¸PZU»[� P[� HKKPJ[P]L&¹�;OL� MVYLPNU�VѝJPHS�HZZ\YLZ�L]LY`VUL� [OH[�in small doses it will only have a positive LќLJ[�� @L[� HZ� [OL� WVZP[P]L� LќLJ[Z� ILNPU�to manifest in Yasmine, it seems as if


FIGURE 5. President Obama announces U.S. commitment to West Bank Infaustructure Needs

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everyone around her has found a way [V� ILULÄ[� MYVT� OLY� PUQ\YPLZ�� HUK� ^V\SK�rather that she stay wounded. Yasmine’s illness and recovery process represent Palestine and the struggles faced by the West Bank and Gaza in their post-Oslo aid dependence. This play was intended to spark discussion not only among 7HSLZ[PUPHUZ� HIV\[� [OL� ZVJPL[HS� LќLJ[Z� VM�aid dependence, but also among foreign donors to Palestine, some of whom were invited to the play. Although the donors invited did not come to watch, the play was successful enough to warrant media attention in both Arabic and English. The creation and enactment of this play is a positive step towards meaningful aid reform to the territories because it recognizes the role that Palestinian complicity plays PU� PTWLKPUN� [OL� LќLJ[P]LULZZ� VM� HPK� [OH[�seeks to promote independent economic and democratic reform in the West Bank and the Gaza Strip.

“House of Yasmine” and Donor Opium are theatrical portrayals of Palestinian anger, disappointment and disenchantment with foreign aid, sentiments that are also YLÅLJ[LK�PU�H�U\TILY�VM�WVSP[PJHS�JHY[VVUZ��Two published political cartoons highlight the United States’ role in entrenching the Israeli occupation and stalling independent economic development. Cartoons about the United States are particularly prevalent due to public frustration with the rigorous USAID preconditions to West Bank recipients and the close Israeli-(TLYPJHU� YLSH[PVUZOPW�� ;OL� ÄYZ[� ^PKLS`�KPZ[YPI\[LK� JHY[VVU� �ÄN\YL� �� KLWPJ[Z� [OL�perceived hypocrisy of President Obama’s


announcement that the United States will commit a substantial amount of USAID to the West Bank for infrastructure needs.27 This political cartoonist depicts how USAID, which on the surface seems positive, is in reality only part of a duplicitous cycle where the United States helps perpetuate continued destruction and reconstruction, further embedding the Israeli occupation and precluding positive development in the West Bank. In this instance the funds are not misappropriated to democratizing

or empowerment workshops, but rather utilized as a broom to sweep up a mess that the United States played a hand in creating.

;OL� ZLJVUK� JHY[VVU� �ÄN\YL� ��is a satirical representation of the asymmetrical distribution of foreign aid, ^OPJO�^HZ�HSZV�YLÅLJ[LK�PU�HU�PU[LY]PL^�PU�Donor Opium 28 Written in Arabic across

the top of the cartoon is a phrase that [YHUZSH[LZ�[V�¸6IHTH»Z�=PZP[�[V�[OL�4PKKSL�East!!” and it shows Obama giving Israel a bomb, while simultaneously giving Palestine a balloon. A Donor Opium interview with Iyad Al Riyahi at the Bisan Center for Research and Development in Ramallah refocuses this attitude globally, rather than strictly, against the U.S. Al Riyahi comments that “at the same time [OH[� .LYTHU`� NP]LZ� \Z� H� IHN� VM� ÅV\Y� P[�gives Israel nuclear submarines.”29 Though

an exaggeration, it is important to note that although some of the most vocal criticism of Palestinian foreign aid is against the United States, many nations have similar aid preconditions towards Palestine and close relationships with Israel.

The views expressed by these cartoonists are echoed by bloggers in Palestine, particularly Nora Lester Murad

FIGURE 6. "Obama's Visit to the Middle East."

192014Spring

FIGURE 6. "Obama's Visit to the Middle East."

who founded the Dalia Association, which attempts a grassroots approach to aid reform in the West Bank and Palestine. Murad writes in her blog that aid in Palestine has only led to “local NGOs chasing international funding by modifying their programs, publishing information in English rather than in Arabic, and hiring L_[YH� Z[Hќ� [V� Z\ITP[� ÄUHUJPHS� YLWVY[Z� PU�foreign currencies.”30 Murad is speaking to the professionalization of Palestinian 5.6Z��WHYHSSLSLK�PU�[OL�0ULќLJ[P]L�:JOVVS��which has led to humanitarian non-governmental organizations representing donor interests, instead of the interests of those to whom they provide services. This professionalization, also emphasized by Hammami in the Political Balance School, created a system in which the very organizations designed to assist Palestinians are as removed from their needs as their government.

Alternative Perspectives on Foreign Aid

>OPSL� [OL� YHTPÄJH[PVUZ� VM� MVYLPNU�aid may demobilize civil society, the humanitarian support provided does WVZP[P]LS`� HќLJ[� [OL� SP]LZ� VM� TPSSPVUZ� VM�Palestinians. The Empowerment School is rooted in well-founded data that documents the expansive humanitarian YLSPLM� LќVY[Z� THKL� WVZZPISL� I`� MVYLPNU�capital. As of data available in 2005, the NGO sector is believed to cover over 60 percent of all healthcare services, 80 percent of all rehabilitation services and almost 100 percent of all preschool

education.31 Additionally, the roughly 2,000 NGOs operating in the West Bank and Gaza Strip employ more than ��PUKP]PK\HSZ�PU�KPќLYLU[�JHWHJP[PLZ��These employment and humanitarian resources are critical to sustaining life in the territories and without foreign capital there would be a dramatic decrease in the availability of services to Palestinians, and in their quality of life.

;OL� PSS�LќLJ[Z� VM� YLUKLYLK� HPK� HYL�not just the responsibility of independent donors, but can also be attributed to the donors’ fear of being found guilty by the media for funding terrorism. Donors are forbidden by their governments to fund terrorism, and Palestinians who commit violence against Israel are widely considered terrorists rather than military combatants because Palestine is not an internationally-recognized sovereign nation.32 This makes donors fearful of giving medical supplies to hospitals, or KPYLJ[PUN� NV]LYUTLU[� ÄUHUJLZ�� ZPUJL�Fatah or Hamas could use materials to help those accused or convicted of terrorist acts against Israel.33 A quick internet search perennially reveals a host of articles depicting how foreign aid to Palestine is being channeled into the hands of terrorists. While the legitimacy of the claims leveled in these articles may be questionable, donors fear media scrutiny into their funding activities to Palestinians.

If non-governmental donors do choose to fund Palestinian organizations, they are obliged by their own governments

to require extensive and detailed reports from their benefactors, leading to additional professionalization by PNGOs. Palestinian organizations respond to these requirements by hiring individuals ^P[O� \UJVTTVU� ZRPSSZ� Z\JO� HZ� Å\LUJ`�in multiple languages or competency in certain computer programs, which contributes to creating a systemic NGO hierarchy. In an interview conducted with Nora Lester Murad, she said, “both on the Palestinian side and on the donor side, they are hiring people to service the donors. So this creates NGOs that are not political, but bureaucratic. They are designed to implement projects, not to respond to communities, to analyze and IL�ÅL_PISL�PU�YLZWVUZL�[V�WVSP[PJHS�L]LU[Z��They’re less relevant organizations than they could be if they weren’t constructed this way.”34 Placing the blame uniquely on [OL�ZOV\SKLYZ�VM�KVUVYZ�MVY�[OL�PSS�LќLJ[Z�of PNGO professionalization is not only unfair, but also detracts from the agency of Palestinians.

Looking ForwardIt is clear that foreign aid to the

West Bank and Gaza needs to be re-conceptualized. Funneling billions of conditional funds into Palestine since the Oslo Accords has resulted in a professionalization of the NGO community and created a hierarchical relationship between grassroots mobilizers’ and organizations with the capital necessary to implement reforms. As well as a demobilization of civil society, and has


JUIS20

not yet stimulated independent economic growth. Palestinians and donors alike are frustrated and fatigued, but the Israeli government - the prodigious impediment to change- is currently immovable. What Palestine needs more than money is agency, and the Dalia Association is the forerunner of a movement that is working to redevelop that agency through domestic aid reform.

The Dalia Association is an organization founded in 2007 in response to an upheaval in civil society and the perceived need to address aid reform, with the mission, “to mobilize and properly utilize resources necessary to empower a vibrant, independent and accountable civil society.”35 Its aim is highly relevant to contemporary challenges, as PNGOs receive about 80 percent of their revenue from foreign aid, making the PNGO program implementation almost exclusively accountable to their donors, rather than to their constituents.36 Dalia OHZ�PUP[PH[LK�H�U\TILY�VM�KPќLYLU[�ZTHSS�scale economic programs, such as “community foundations” across the West Bank, East Jerusalem, Gaza Strip, Israel and the Diaspora to counter the misplaced accountability and professionalization of many PNGOs, and the decrease in volunteerism. A community foundation is funded by endowment and dispersed collectively by the community. The funds are generally used for micro-lending to invest in small scale sustainable projects such as opening a neighborhood shop, or buying the seeds and supplies to start a tree farm.37�4\YHK�ÄUKZ�[OH[�+HSPH»Z�^VYR�

in helping initiate these small community MV\UKH[PVUZ� OHZ� H� WYVMV\UK� LќLJ[� VU�Palestinian neighborhoods. She notes that, “the whole village decides how to make the grants and then there’s a local monitoring and evaluation committee, and they realize that they have a responsibility to hold their own accountable. And when they do their own projects they value their local resources.”38 Through projects such as community foundations, the Dalia Association instigates reform at the grassroots level, allowing Palestinians to empower themselves without the preconditions of foreign aid, or project implementation beholden to outside donors. These programs remobilize citizens, eliminating the majority of bureaucratic aid burdens, while also positively politicizing Palestinians. The Dalia Association is a rational response to the professionalization of the PNGO community that addresses many of [OL� PZZ\LZ� YHPZLK� I`� [OL� 0ULќLJ[P]L� HUK�Political Balance Schools.

ConclusionForeign aid to Palestine provides

modest humanitarian relief, but the combination of its preconditions and the broken political systems of the West Bank and Gaza Strip facilitates a professionalization of Palestinian NGOs. This in turn creates a divide between the needs of the people and the responsiveness of the organizations. Donors are fatigued as they see billions of dollars fail to catalyze independent Palestinian economic development or

build a truly functioning democratic society. Donors feel forced to institute aid preconditions because they fear unknowingly funding terrorism, while many Palestinians feel that violent action against their occupiers is the only means [V� HќLJ[� WVSP[PJHS� KL]LSVWTLU[�� ^OPJO�conditional aid ostensibly seeks to inspire. It is a cycle that will be perpetuated unless connections can be fostered between the larger, well-funded, pro-Western PNGOs and grassroots movements, between the Palestinian people and their government, and between foreign donors and NGOs with productive ideas for developing the West Bank and Palestine.

;OLYL� HYL� ZPNUPÄJHU[� YLSL]HU[�WVSPJ`� PTWSPJH[PVUZ� [V� [OL� ÄUKPUNZ� VM�this research for donors, governments and aid recipients globally. Donor organizations and governments alike OH]L�[V�IL�H^HYL�[OH[�HPK�PZ�TVZ[�LќLJ[P]L�when its implementation is dictated by its recipients. Mandating certain projects because they align with donor values without respecting benefactors’ input preordains project failure, or at least does not qualify guaranteed success. The United States government in particular needs to reassess its rigorous aid preconditions, since current guidelines preclude the outcomes, which aid is purportedly intended to facilitate. Giving is admirable, but it should be done so that both the donor and the recipient JHU� ILULÄ[� M\SS �̀� PUZ[LHK� VM� IV[O� MLLSPUN�\UZH[PZÄLK�HUK�L_HZWLYH[LK��

Scholars are very aware of the issues in rendering aid to Palestine,


212014SpringJUIS21

but they now have a responsibility to disseminate that awareness beyond the academic community. They should compel politicians, donors and recipients to reevaluate their roles in perpetuating a broken system that preserves an inequitable status quo between Israel and Palestine, while also weakening the Palestinian economy and limiting the lives of millions. Foreign aid is meant to help, and in small ways it does, but in the case of Palestine, the small successes often serve to conceal the larger more important issues. Organizations like the Dalia Association should be prioritized, donors should allow Palestinians the space to donate time and money, collectively distribute funds and account for their own projects. The Dalia Association and similar types of programs have the potential to remobilize civil society and encourage positive development in the West Bank and Gaza Strip; these small groups of thoughtful committed citizens, if given the right opportunity, can change Palestine.

Endnotes1. Sheila Carapico. "NGOs, INGOs, GO-NGOs:

Making Sense of Non-Governmental Organizations." Middle East Report 214 (Spring 2000):12-15. JSTOR.

2. Ismail Daiq. "Palestinian Civil Society and the Peace Programs." Palestine - Israel Journal 12, no. 1 (2005).

3. Allam Jarrar. "The Palestinian NGO Sector: Development Perspectives." Palestine - Israel Journal 12, no. 1 (2005): 43-48.

4. Manal A. Jamal. "Democracy Promotion, Civil Society Building, and the Primacy of Politics." Comparative Political Studies 45 (2010):

3-31. April 27, 2010.

5. Manal A. Jamal. "Democracy Promotion, Civil Society Building, and the Primacy of Politics." Comparative Political Studies 45 (2010): 3-31. April 27, 2010.

6. Rema Hammami. "NGOs: The Professionalisation of Politics." Race & Class 37, no. 2 (1995): 51-63.

7. Hammami. "Palestinian NGOs Since Oslo: From NGO Politics to Social Movements?"

8. The Organization for Economic Co-operation and Development (OECD). Survey on Monitoring the Paris Declaration. August 12, 2011. Raw data.

9. "Paris Declaration and Accra Agenda for Action." OECD.org. Accessed October 10, 2013.http://www.oecd.org/dac/LќLJ[P]LULZZ�

10. Mary Koussa. "Country Brief." The World Bank - West Bank and Gaza. September 2013. http://web.worldbank.org

11. Joseph DeVoir, and Alaa Tartir. Tracking External Donor Funding to Palestinian Non-Governmental Organizations in the West Bank and Gaza 1999-2008. Report. 2009.

12. DeVoir and Tartir, Tracking External Donor Funding to Palestinian Non-Governmental Organizations in the West Bank and Gaza

13. OECD


15. Liu, Jing, and Age A. Tiltnes. Surveying Palestinian Opinion: Results from an Opinion Poll in the West Bank and the Gaza Strip February and May 2010. Report no. 0804-5135. Fafo, 2011.

16. Jacob Shamir and Khalil Shikaki. "Self-Serving Perceptions of Terrorism Among Israelis and Palestinians." Political Psychology 23, no. 3 (September 2002): 537-57. JSTOR.

17. Shamir and Shikaki,"Self-Serving Perceptions of Terrorism Among Israelis and Palestinians."

18. Jim Zanotti, U.S. Foreign Aid to the

Palestinians, report (Congressional Research Service, 2013).

19. Zanotti, U.S. Foreign Aid to the Palestinians



22. Donor Opium. Directed by Mariam Shahin and George Azar. Palestine: Rosa Luxemburg Foundation, 2011. YouTube. http://www.youtube.com/watch?v=wVTYyRLMljc.

23. "The West Bank." Central Intelligence Agency World Factbook. December 5, 2013. https://www.cia.gov/library/publications/the-world-factbook/geos/we.html

24. Marie, Rama, and Dalia Association. "International Aid Hurts Palestinian Civil Society." YouTube. September

25. Donor Opium

26. Michelle Gyeney. "Play Satirizes How Aid Donors Sideline Palestinians." The Electronic Intifada (Jenin Refugee Camp), July 1, 2012. http://electronicintifada.net/content/play-satirizes-how-aid-donors-sideline-palestinians/11450?utm_source=EI+readers&utm_campaign=d708c5e328-RSS_EMAIL_CAMPAIGN&utm_medium=email

27. Nora L. Murad, PhD. "Should Palestinians Boycott International Aid?" Shabbah Report (web log), October 24, 2012. http://sabbah.biz/mt/archives/2012/10/24/should-palestinians-boycott-international-aid/.

28. "Obama's Visit to the Region." Cartoon. The Palestine Chronicle. November 10, 2013. http://www.palestinechronicle.com/images/.

29. Nora L. Murad, Should Palestinians Boycott International Aid?

30. Shahin and Azar, Donor Opium.

31. Allam Jarrar, The Palestinian NGO Sector: Development Perspectives

32. Alex P. Schmid, The Routledge Handbook of Terrorism Research. Routledge, 2011.

33. Edwin Black. "How British and American Aid Subsidises Palestinian Terrorism."


JUIS22 222014Spring

Theguardian.com. November 11, 2013. http://www.theguardian.com/commentisfree/2013/nov/11/british-american-aid-subsidises-palestinian-terrorism.

34. Nora L. Murad, PhD. "Perceptions of Foreign Aid to Palestine." Telephone interview by author. December 10, 2013.

35. Dalia Association: A Palestinian Community Foundation. Accessed November 2013. dalia.ps.


37. Nora L. Murad, PhD. "Five Guaranteed Ways [V�7YVÄ[�MYVT�0U]LZ[TLU[�PU�[OL�7HSLZ[PUPHU�Community." Noralestermurad.com (web log), January 3, 2013.

38. Nora L. Murad, Perceptions of Foreign Aid to Palestine

ReferencesAlesina, Alberto, and David Dollar. "Who Gives

Foreign Aid to Whom and Why?"Journal of Economic Growth 5 (March 2000): 33-63.

Anderson, Mary B. "Aid: A Mixed Blessing." JSTOR 10, no. 3/4 (August 2000): 495-500. JSTOR.

Browers, Michaelle L. Democracy and Civil Society in Arab Political Thought: Transcultural Possibilities. Syracuse, NY: Syracuse University Press, 2006.

Brynen, Rex. "Buying Peace? A Critical Assessment of International Aid to the West Bank and Gaza." Journal of Palestine Studies 25, no. 3 (Spring 1996): 79-92. JSTOR.

Brynen, Rex. "International Aid to the West Bank and Gaza: A Primer." Journal of Palestine Studies 25, no. 2 (Winter 1996): 46-53. Accessed October 14, 2013. JSTOR.

Bueno De Mesquita, Bruce, and Alastair Smith. "Foreign Aid and Policy Concessions." Journal VM�*VUÅPJ[�9LZVS\[PVU��:(.,�

Bueno De Mesquita, Bruce, and Alastair Smith. "A Political Economy of Aid."International Organization 63 (2009): 309-40. Journals.cambridge.org.


Carapico, Sheila. Political Aid and Arab Activism: Democracy Promotion, Justice, and Representation. Cambridge: Cambridge University Press, 2013.

Challand, Benoit. Civil Society, Autonomy and Donors: International Aid to Palestinian NGOs. Working paper no. 2006/20. Florence: European University Institute, 2006.

Challand, Benoit. Palestinian Civil Society: Foreign Donors and the Power to Promote and Execute. Routledge, 2009.

Dalia Association. "Does the International Aid System Violate Palestinians' Rights?"This Week in Palestine, August 2008, 124th ed. http://www.thisweekinpalestine.com/details.php?id=2537&ed=156&edid=156.

Dana, Tariq. Palestinian Civil Society: What Went Wrong? Issue brief. Al-Shabaka: the Palestinian Policy Network. http://al-shabaka.VYN�ZP[LZ�KLMH\S[�ÄSLZ�+HUHF7VSPJ`)YPLMF,UFApr_2013.pdf.

Easterly, William, and Tobias Pfutze. "Where Does the Money Go? Best and Worst Practices in Foreign Aid." The Journal of Economic Perspectives 22, no. 2 (Spring 2008): 29-52. JSTOR.

Gubser, Peter. "The Impact of NGOs on State and Non-State Relations in the Middle East." Middle East Policy IX, no. 1 (March 2002): 139-48.

Hijab, Nadia, Alaa Tartir, and Jeremy Wilderman. "A New Approach to Palestinian Aid." Foreign Policy, November 6, 2012. http://mideast.foreignpolicy.com/posts/2012/11/05/a_new_approach_to_palestinian_aid#!

Hijab, Nadia. "Rethinking Aid to Palestine." Foreign Policy, August 3, 2012. http://mideast.foreignpolicy.com/posts/2012/08/03/rethinking_aid_to_palestine.

Jad, Islah. "NGOs: Between Buzzwords and Social Movements." Development in Practice 17, no. 4 (August 2007): 622-29. JSTOR.

Jamal, Amaney A. Barriers to Democracy: The Other Side of Social Capital in Palestine and the Arab World. Princeton, NJ: Princeton University Press, 2007.

Kamrava, Mehran, and Frank O. Mora. "Civil Society and Democratisation in Comparative Perspective: Latin America and the Middle East." Third World Quarterly 19, no. 5 (198): 893-916.

Khalidi, Raja. "Reshaping Palestinian Economic Policy Discourse: Putting the Development Horse before the Governance Cart." Journal of Palestine Studies 34, no. 3 (Spring 2005): 77-87. JSTOR.

Levitt, Matthew. "Broken Aid System to Palestinians." Middle East Strategy at Harvard (web log), January 30, 2009. https://blogs.law.harvard.edu/mesh/2009/01/broken-aid-system-to-palestinians/.

Marie, Rama, and Dalia Association. "International Aid Hurts Palestinian Civil Society." YouTube. September 23, 2013. http://www.youtube.com/watch?v=kR1F0XDNWNQ.

Morgenthau, Hans. "A Political Theory of Foreign Aid." The American Political Science Review 56, no. 2 (1962): 301-09. JSTOR.

OCHA, “Humanitarian Fact Sheet on the Jordan Valley and Dead Sea Area,” February 2012, http://www.ochaopt.org/documents/ocha_opt_jordan_valley_factSheet_february_2012_english.pdf.

Seitz, Charmaine. "The Tar Baby of Foreign Aid: How Palestinians Are Trying to Keep Their Hands Clean." Middle East Report 35 (Spring 2005).

Souri, Helga T. "Marginalizing Palestinian Development: Lessons Against Peace.” Society for International Development 49 (2006): 75-80. Sidint.org/development.

Tartir, Alaa. "Your Perceptions of Foreign Aid to Palestine." Telephone interview by author. November 15, 2013.

"US Senate Threatens to Halt Aid to Palestinians After Historic UN Vote." PressTV(Tehran), December 1, 2012. http://www.presstv.com/detail/2012/12/01/275541/us-threatens-to-cut-palestinian-aid/.

Woods, Ngaire. "The Shifting Politics of Foreign Aid." 0U[LYUH[PVUHS�(ќHPYZ��UV��4HYJO��!�393-409. Wiley Online Library.

232014Spring

early two decades after Dayton, the Bosnian state remains divided, dysfunctional and deadlocked. Attempts at reconciliation and integration through a political framework have stalled or failed. An HS[LYUH[P]L�Z[YH[LN`�PZ�[O\Z�ULLKLK��;OPZ�WHWLY�^PSS�L_HTPUL�[OL�LќLJ[�[OH[�ZWVY[Z�IHZLK�PUP[PH[P]LZ�have as a strategy for reconciliation and in creating co-ethnic unity in Bosnia and Herzegovina. A

two-pronged analysis of sports, looking at the professional, as well as the grassroots level will be utilized. Placing particular emphasis on football, the “world’s sport,” this paper will analyze the Bosnian national football team and NYHZZYVV[Z�5.6�LќVY[Z�[V^HYK�WLHJLI\PSKPUN��([�[OL�WYVMLZZPVUHS�HUK�YLJYLH[PVUHS�SL]LSZ��MVV[IHSS��HUK�TVYL�IYVHKS`�ZWVY[Z�� PZ�H�TLHUZ�VM�HќLJ[PUN�JOHUNL��^OPSL�H]VPKPUN� [OL�WVSP[PJHS�X\HNTPYL�VM�)VZUPHU�ZVJPL[ �̀�;OPZ�WHWLY�^PSS�demonstrate that although football based initiatives face limitations, in some cases severe, grassroots level sports projects are potentially an important way to advance Bosnia’s deadlocked society, which deserves support and further exploration.

TOL� Z[YH[LNPJ� VIQLJ[P]L� HUK� LќLJ[� VM�[OL� JVUÅPJ[� PU� )VZUPH� ZLYPV\ZS`� KP]PKLK�ethnic communities. Approximately 2.2 million people were displaced after years of ethnic cleansing.1 Rape, mass execu-tions and other atrocities committed dur-PUN�[OL�JVUÅPJ[�KLZ[YV`LK�[OL�YLSH[PVUZOPWZ�and the trust between Bosnia’s three main ethnic group: Bosniaks, Croats and Serbs. 0U�[OL�^HRL�VM�[OL�JVUÅPJ[��WLHJLI\PSKPUN�LќVY[Z�OH]L�MVJ\ZLK�VU�[VW�KV^U�JOHUNL�through the sphere of politics. The Dayton Accords, implemented in 1995, prioritized immediate stability over long-term inte-gration. The creation of ethno-nationalist LU[P[PLZ� YLJVNUPaLK� HUK� YLPÄLK� [OL� L[OUPJ�cleansing that occurred during the con-

ÅPJ[��>OPSL�[OL�\ZL�VM�L[OUPJ�X\V[HZ�MVY�WV-sitions in government, such as a revolving presidency, and the provision of an ethnic veto ensured stability, these provisions now mean that political change in Bosnia PZ� HSS� I\[� PTWVZZPISL�� =L[V� WV^LY� PZ� MYL-quently wielded to block reforms that do not serve ethnic interests. As Roberto Bel-loni mentions in, State Building and Inter-national Intervention in Bosnia, since Day-ton, “top down projects with discrete and observable results have been preferred to more challenging, longer term social initia-tives.”2 This is evidenced by the push to organize free and fair elections, seen as an important benchmark of progress, without addressing the deep-rooted problems of

ethnic bloc voting and societal divisions. The main issue with recent attempts to integrate society through politics is that reform is reliant on ethno-nationalist politi-cians, who lack the political will to reform. Politicians play up fears of the “other” and reinforce segregated ethnic homogeneity. ;OL�ZHK� YLHSP[`� [OH[�L[OUPJP[`� PZ� [OL�KLÄU-ing principle of political life is evidenced by the fact that 57 percent of all cam-paign messages in the 2002 election were framed as ethnic issues.3 Reform through a political framework has also lost cred-ibility amongst the Bosnian people. People OH]L�SVZ[�MHP[O�PU�WVSP[PJZ��;OPZ�PZ�YLÅLJ[LK�PU�the view of local activist Nedim Jahic, who says that “all politicians are vain, incompe-

Football in Bosnia:

by Sebastian Dutz

Sebastian Dutz. Sebastian Dutz is a third-year student at the University of Toronto specializing PU�0U[LYUH[PVUHS�9LSH[PVUZ�HUK�7LHJL��*VUÅPJ[�HUK�1\Z[PJL�:[\KPLZ��;OPZ�WHWLY�PZ�[OL�WYVK\J[�VM�Z\TTLY�ÄLSK�YLZLHYJO�PU�)VZUPH�\UKLY�[OL�N\PKHUJL�VM�7YVMLZZVY�9VILY[�(\Z[PU�

As an Aim towards Reconciliation

N

JUIS24

tent and corrupt” and by polls that say 77 percent of Bosniaks, 82 percent of Serbs and 84 percent of Croats think the coun-try is unfairly run by a couple major inte-rests.4 In sum, top-down peacebuilding has failed. There are no functional politi-cal multiethnic institutions and the current political elite are obstructive. No “national narrative” or identity in Bosnia exists.5 Re-lationships between the three major ethnic groups still tend to be considered as a zero sum game.6

A new alternative strategy is sorely needed. But in what form could this nonpolitical strategy manifest itself? Looking at civil society and sports may be an LќLJ[P]L� TLHUZ�for reconciliation, cooperation, and the creation of a co-ethnic identity in Bosnia.

Why Sport>O`�ZWVY[&�([�ÄYZ[�IS\ZO��ZWVY[��KL-

ÄULK�I`�[OL�<UP[LK�5H[PVUZ�HZ�¸HSS�MVYTZ�VM�physical activity that contribute to physical Ä[ULZZ��TLU[HS�^LSS�ILPUN�HUK�ZVJPHS�PU[LY-action ”may seem trivial.7 However, the el-ement of social interaction found in sport has important consequences. As a com-mon ground for positive interaction, sports OH]L� H� WV[LU[� ZVJPHSPaPUN� LќLJ[� [OH[� JHU�lead to interethnic communication, co-VWLYH[PVU��HUK�PU[LNYH[PVU��(Z�2VÄ�(UUHU�

says, “Sport is a universal language...at its best it can bring people together, no mat-ter what their background.”8 The interna-tional community has recognized the im-portant role sports can play in documents, such as UN Resolution 61/10 14, which states that sport has the ability to promote and take action to foster peace.9 In addi-tion to its positive power, sport is an area worth focusing on because it is a pervasive

component of Bosnian society. As a 2008 report by the Sport For Development and Peace International Working Group makes clear, sports are an important part of Bos-nian civil society. In fact, sports based organizations make up 19 percent of all registered associations in Bosnia.10 Sports are especially popular with youth; 30 per-cent of all youth use their free time to ac-tively participate in sports. Sports are also the second most popular leisure activity in Bosnia.11 This paper will focus on the im-pact of football. While there is no empirical study charting sports preferences in Bos-UPH�� ÄLSK� VIZLY]H[PVUZ�THRL� P[� JSLHY� [OH[�

football is highly popular. In both Mostar HUK�:HYHQL]V��MVV[IHSS�ÄLSKZ�HYL�JVTTVU��;OLZL�MVV[IHSS�ÄLSKZ�HYL�HSTVZ[�HS^H`Z�M\SS�of children playing. Furthermore, adver-tisements for football teams were present on store signs, and football stadiums were passed by on each city tour taken as part VM�[OL�ÄLSK�[YPW��+\L�[V�P[Z�WVW\SHYP[ �̀�MVV[-ball is a worthy area to focus initiatives on.

HistoryA brief history

of football in Bosnia serves useful to set the context for both elite and local level football initiatives. In the Yugo-slav era, sport played H� ZPNUPÄJHU[� YVSL� MVY�“brotherhood and uni-ty.” Under the rule of Josip Tito, a national professional Yugoslav

football league was created. Football teams were rebranded and renamed to YLTV]L�UH[PVUHS�VY�L[OUPJ�HѝSPH[PVUZ��*VT-munist symbols and names, such as “Red Star” or “Partizan” were used.12 As Zero, a tour guide from Sarajevo fondly remem-bers, “in the days of Yugoslavia, football was a peaceful, enjoyable activity... fami-lies could go watch national league games and there was never any violence.”13 While there may be some Yugoslav nostalgia present in this statement, the sentiment demonstrates how positively football is re-membered as part of Bosnia’s past. Foot-ball was an important symbol of unity and

Football in Bosnia: As an Aim towards Reconciliation / Sebastian Dutz

"...the element of social interaction found in sport has important consequences. As a common ground for posi-[P]L�PU[LYHJ[PVU��ZWVY[Z�OH]L�H�WV[LU[�ZVJPHSPaPUN�LɈLJ[�

[OH[�JHU�SLHK�[V�PU[LYL[OUPJ�JVTT\UPJH[PVU��JVVWLYH[PVU��and integration."

252014Spring

prestige. Support for the multiethnic na-tional Yugoslav team was high and helped people of all ethnicities “feel connected.”14 However, football became infected with nationalism in the lead up to the dissolution of Yugoslavia. Football fans began to use nationalistic slogans and chants at games. Football stadiums, as it states in Targeting :VJPHS� *VOLZPVU� PU� 7VZ[� *VUÅPJ[� :VJPL[-ies through Sport, were soon turned into “laboratories for mass behavior and the NLULYH[PVU�VM�JVUÅPJ[�¹�-VV[-ball fans were some of the ÄYZ[�[V�ILJVTL�YHKPJHSPaLK�15 :WVY[� HUK� JVUÅPJ[� ILJHTL�intertwined as many foot-ball fans became voluntary TPSP[PH� ÄNO[LYZ�� +\YPUN� [OL�JVUÅPJ[�� HSS� )VZUPHU� MVV[IHSS�[LHTZ�KPZPU[LNYH[LK��*VUÅPJ[�raged and sport died. Now, football has reemerged in [OL� WVZ[�JVUÅPJ[� ZVJPL[ �̀� (�new domestic league and national football team were created shortly after Dayton. Unfortunately the violence that became ingrained in Bosnian football remains to a certain extent. In Sarajevo, the tour guide claimed that “it is now unsafe to go watch SLHN\L�NHTL�K\L�[V�]PVSLUJL�HUK�VќLUZP]L�signs and chants.”16 In Mostar, the tour guide explained that violent clashes are common between supporters of the Bos-nian and Croat league teams in the city.17 There is thus a negative side to football, in addition to its positive ability to bring people together. It is in this ambiguous, uncertain context, where sport can lead to

violence that elite and local level football initiatives are being launched.

Football at the Professional Level

At the professional level, the Bosnian national football team is a rare example of a successful multiethnic institution that MVZ[LYZ�JV�L[OUPJ��\UPÄLK�)VZUPHU�PKLU[P[ �̀�The team, which has joint Bosniak and

Serb co-captains, is made up of a diverse mix of all major ethnicities. The team was recently readmitted to international com-petition after Bosnia’s Football Federation reformed its structure. A single presidency was created for professional soccer in Bosnia in place of a three member cabi-net based on ethnic quotas.18 The team has reached a new high, ranking 15th in the world, and support is increasing. As a Bosnian Serb fan says, “If you told me 10 years ago I’d feel something for the Bosnian national team, I’d have said, as a Serb: ‘Never!’ But I’ll be watching and wanting them to win.”19 In both Sarajevo and Mostar, shops can be found that sell

national team paraphernalia and photos of the national team’s star player, Edin Dzeko, are plastered outside of sports bars.20 Supporting the national team has created a common interest for Bosniaks, Serbs and Croats.Through cheering for a “Bosnian” team, the notion of a shared, non-ethnic Bosnian identity can develop. Funding and promoting the national team can in this way, create positive changes in Bosnian society.

Improving football at the professional level does, however, have limitations. While co-ethnic support for the national team may ex-ist, this support is mostly temporary and conditional on the team’s performance. When asked, youth activ-ist Nedim Jahic explained, “there is not much support for the Bosnian national

team...maybe if they do well, like qualify for the world cup.” 21 When the Bosnian team performs poorly, people tend to revert to [OLPY� WLYZVUHS� L[OUPJ� HѝSPH[PVU� PU� MVV[IHSS��For example, during the Euro 2008 football tournament, Bosniaks in Mostar cheered for Turkey, whilst Croatians cheered for Croatia. Ethnic clashes ensued.22 Even ^OLU� [OLYL� PZ�\UPÄLK�Z\WWVY[� MVY� MVV[IHSS�at the professional level, this support may not be positive or peaceful. The competi-tive nature of professional sports can lead to the development of a win at all cost mentality and stoke aggression.23 Take for example, the multiethnic football supporter


0[�PZ�PU�[OPZ�HTIPN\V\Z��\UJLY[HPU�JVU[L_[��where sport can lead to violence that elite and lo-cal level football initiatives are being launched."

JUIS26

ÄYT�)P/�-HUH[PJVZ��ÔVZL�^LIZP[L�Z[H[LZ�they are “ready in any way to defend the colour and emblem of their country.” The ^LIZP[L� HSZV� LUKVYZLZ� [OL� \ZL� VM� ÅHYLZ�and catalogues supporter songs such as “No Surrender”.24 Football based initiatives at the professional level then, while they can inspire brief moments of co-ethnic unity, are unsustainable in the long run.

Football at the Grassroots Level

It is at the grassroots community level that projects utilizing football can really THRL�H�KPќLYLUJL��.YHZZYVV[Z� ZWVY[Z�VY-NHUPaH[PVUZ�� HZ� KLÄULK� PU��Guidelines for Good Governance in Grassroots Sports, HYL� ¸UVUNV]LYUTLU[HS�� UV[� MVY� WYVÄ[� HUK�democratic organizations that organize sport and physical activities on a regular basis for other purposes than high level performance.”25 These organizations can be a powerful force for reconciliation.26 Football can assist with this by creating positive experiences and interactions be-tween divided peoples. As Huma Haider, an academic who studies transitional jus-[PJL�UV[LZ��P[�PZ�KPѝJ\S[�[V�V]LYJVTL�WYLQ\-dices and stereotypes in “the absence of positive experiences with the other.”27 Sports projects create a positive space for dialogue that can slowly, but surely erode barriers between people. Sociological lit-erature shows that through sport, people can develop reciprocity, build friendships and establish mutual trust.28 Sports help bridge social capital. Prejudices are re-duced, and opportunities are expanded

through the loose ties and connections forged through sport.29 As a fun and rou-tine activity, playing sports humanizes “the other.” Sports foster a sense of under-standing and respect. Importantly, com-munity level football initiatives can focus on the positive recreational aspect of the sport, rather than the competitive aspect present at the professional level. Football is an especially useful mechanism be-JH\ZL� P[� VќLYZ� HU� LUQV`HISL�� UL\[YHS� HUK�natural place for interaction. As many Bos-nians already play or follow sports, it is not an imposed or awkward means of interac-tion. Football has the potential to open the door to further interaction and cooperation in other areas. It is a vital “icebreaker” in the peacebuilding process. The success-es of two prominent grassroots organiza-tions, Open Fun Football Schools and the Balkan Alpe Adria Project demonstrate the transformative power of sport.

Founded in 1998 by a Danish hu-manitarian organization, the Open Fun Football School project targets children from 7-11-years-old in Bosnia. It has the stated aim of “building friendship and sports cooperation among children and adults from divided communities based on equality and non-discrimination.”30 The project attempts to achieve this aim by Y\UUPUN�Ä]L�KH`�SVUN�¸ZJOVVSZ¹�ÔLYL�JOPS-dren learn technical football skills in mixed ethnic groups, while parents attend work-shops and coaches participate in training sessions. The project places heavy em-phasis on involving local communities and has developed a large network of local

volunteers and leaders.31 Since its incep-tion, the project has setup 216 of these “schools” in Bosnia and has involved roughly 45,000 children.32 Independent evaluations have lauded the organization HZ� H� Z\JJLZZ�� ZWLJPÄJHSS`� [OL� [^PU�JP[`�concept employed by the project. In or-der to be chosen as a site for the football “schools,” local communities have to part-ner with a “twin” community from across the ethnic divide and work in tandem. The OFFS program showed special progress ÔLU�P[�^HZ�HISL�[V�HJOPL]L�[OL�ÄYZ[�WVZ[-war contact between municipalities in Sre-brenica, an especially sensitive area.33 The twin city concept, and the schools in gen-eral, bring together people from divided communities, allow for a productive work-ing relationship, and create bonds among children and parents. The project has suc-ceeded in normalizing relations between children, but also in improving relation-ships of the older generation. Reconcilia-tion is indirectly addressed as parents in-teract over their children’s sport activities. While according to Lars Udsholt’s Evalu-ation Study: CCPA’s Open Fun Football Schools Programme, the project could do more to “connect with other networks out-side of grassroots sport” and “more selec-tively choose project sites”, it is in general a successful example of what community football initiatives.34

Since 2006, the Balkan Alpe Adria Project (BAAP) has sought to educate youth about the dangers of ethnic na-tionalism through football workshops and events. The project takes a wider scope,


272014Spring

looking not only at eliminating prejudices within Bosnia, but also at greater regional cooperation and intercultural exchange. Its website describes how it uses “football as a medium to communicate an integrat-ing message by targeting young people.”35 BAAP runs a similar short run event, like OFFS, but on a regional level, called the Balkaniade. Balkaniade is a tournament for teams of children with friendly compe-tition, workshops, brochures handed out and testimonial speeches by professional football players.36 Now in its second year, this event successfully brings youth from JVUÅPJ[�aVULZ� [VNL[OLY��HUK� PZ�H�]HS\HISL�example of the potential for grassroots sports to lead to regional, as well as do-mestic cooperation and integration.

Looking ForwardGrassroots football initiatives can be

successful, yet are also faced with limi-tations. Simply setting up football activi-ties between divided communities is not enough. Sports programs need to be strategically designed. Football cannot be considered a “natural” and universally ap-WSPJHISL�YLTLK`�MVY�WVZ[�JVUÅPJ[�KP]PZPVUZ�all on its own. As OFFS has done, work-shops and seminar discussions about tolerance and non-discrimination need to supplement sport activities. There is also the fear that connections made through sport, or “sports friendships” will wane af-[LY� SLH]PUN� [OL� ÄLSK�37� (� Ä]L� KH`� ZLZZPVU�opens the door to future communication, but may not create deep lasting connec-tion between players or parents. Grass-

roots football projects also face logistical challenges in Bosnia. Funding from local, regional and national levels of government is lacking in Bosnia and plagued with cor-ruption. Many civil society organizations are founded, only to lose funding shortly thereafter. Only about 6,600 of Bosnia’s 12,000 registered civil society organiza-tions are operational.38 The lack of local support leads grassroots organizations to seek international funding, which is often project based and tied to the interests of donors.39 Football projects also have to deal with an undeveloped volunteer cul-ture in Bosnia. Only 4.5 percent of Bos-nians are registered volunteers.40 These PUP[PH[P]LZ�[O\Z�MHJL� SPTP[Z� PU�OV^�LќLJ[P]L�they can be.

However, these limitations may be overcome. Moving forward, sport based PUP[PH[P]LZ�JHU� PUJYLHZL� [OLPY� LќLJ[P]LULZZ�I`� [HPSVYPUN� [V� ZWLJPÄJ� OPZ[VYPJHS� HUK� J\S-tural contexts. It is more labor intensive, but general policies may not work, as the TLHUPUN� VM� YLJVUJPSPH[PVU� KPќLYZ� ^P[OPU�Bosnia, based on what experiences during [OL�JVUÅPJ[�^LYL�SPRL��;V�LUZ\YL�[OH[�WYVN-ress made through football initiatives is not lost, follow up sessions should be held. Borrowing a tactic from Sports Sans Fron-tiers, a Kosovo NGO, past participants in football schools such as OFFS could be brought back as program leaders. By taking the role of leader, lessons learned from the program would be reinforced.41 Projects should also be tied into broader networks that include other peacebuild-

ing and reconciliation organizations. This would allow expertise to be shared across ÄLSKZ� HUK� Z[YLUN[OLU� [OL� YLJVUJPSPH[PVU�aspect of the sports programs. Addition-ally, links with national organizations like the Football Federation of Bosnia and na-tional football clubs could be pursued for PTWYV]LK� M\UKPUN�� (Z� H� ÄUHS� UV[L�� TVYL�empirical research on sports civil soci-ety organizations and the role of sport in Bosnian society needs to be conducted. Through this research, sports policies can IL�IL[[LY�YLÄULK�HUK�[HYNL[LK��YLZ\S[PUN�PU�PUJYLHZLK�LќLJ[P]LULZZ�

ConclusionAs shown in the essay, sports, spe-

JPÄJHSS`�MVV[IHSS��HYL�HU�HYLUH�^OLYL�L[OUPJ�reconciliation is possible. Although pro-fessional level initiatives like the Bosnian national team are problematic, community level projects have proven to be success-M\S��.YHZZYVV[Z�LќVY[Z�I`�PU[LYUH[PVUHS�HUK�local NGO’s should thus be given addition-al funding and support. In a country where top-down political reform has merely led to paralysis, a new strategy is needed. :WVY[Z�IHZLK�YLMVYT�PZ�VUL�Z\JO�KPќLYLU[�strategy that has a good chance for suc-cess. If reconciliation and integration can be achieved through sport, momentum can be built. Success can then start to ZWPSS�V]LY� [V�V[OLY�TVYL�ZPNUPÄJHU[� PZZ\LZ�and divisions. Connecting football initia-tives to broader networks can accelerate this process. While the establishment of [Y\Z[� HUK� JVVWLYH[PVU� IL[^LLU� KPќLYLU[�


JUIS28

ethnic groups in Bosnia may seem far away, using football to improve relation-ships is an important initial step.

Endnotes1. Pickering, Paula. Peacebuilding in the Balkans:

The View From The Ground Floor

2. Belloni, Roberto. State Building and International Intervention in Bosnia. 6

3. Pickering, Paula. Peacebuilding in the Balkans: The View From The Ground Floor. 150

4. Pickering, Paula. Peacebuilding in the Balkans: The View From The Ground Floor. 150

5. Jahic, Nedim. Interview by author. Personal interview. Hotel Bosnia, Sarajevo, June 12, 2013.

6. Belloni, Roberto. State Building and International Intervention in Bosnia. 2

7. United Nations InterAgency Task Force on Sport for Development and Peace. Sport for Development and Peace: Towards Achieving the Millenium Goals. 2003.

��(UUHU��2VÄ��7YLZZ�9LSLHZL�:.�:4� �� 2004

9. U.N. General Assembly. "Resolution 61/10 [Sport as a means to promote education, health, development and peace]". 8 De-cember 2006.

10. UN Volunteer Report: Civil Society in Bosnia and Herzegovina Seeking the Way For-ward. 2011.

11. Youth Information Agency Bosnia Herzegovi-na (OIA). Independent Evaluation of the Na-tional Youth Policy in Bosnia Herzegovina. Sarajevo, Bosnia. 2005.

12. Mills, Richard. “’It All Ended In An Unsporting Way: Serbian Football And The Disintegration Of Yugoslavia,19892006.” 1195

13. Zero (Tour Guide). Interview by author. Per-sonal interview. Sarajevo, June 11, 2013.

14. Mills, Richard. “’It All Ended In An Unsporting

Way: Serbian Football And The Disintegration Of Yugoslavia,19892006.” 1197

15. Council of Europe and EPAS. Targeting Social *VOLZPVU�PU�7VZ[*VUÅPJ[�:VJPL[PLZ�[OYV\NO�Sport.

16. Zero (Tour Guide). Interview by author. Per-sonal interview. Sarajevo, June 11, 2013.

17. Mostar Tour Guide (Tour Guide). Interview by author. Personal interview. Mostar, June 12, 2013.

18. Vulliamy, Ed. “How Bosnia’s Pioneering Foot-ballers are Succeeding Where the Politicians Failed.” The Guardian

19. Vulliamy, Ed. “How Bosnia’s Pioneering Foot-ballers are Succeeding Where the Politicians Failed.” The Guardian

20. Personal Field Observation. Sarajevo and Mo-star. June 1012, 2013.

21. Jahic, Nedim (Youth Activist). Interview by author. Personal interview. Hotel Bosnia, Sa-rajevo, June 12, 2013.

22. Mostar Tour Guide (Tour Guide). Interview by author. Personal interview. Mostar, June 12, 2013.

23. Council of Europe and EPAS. Targeting Social *VOLZPVU�PU�7VZ[¨*VUÅPJ[�:VJPL[PLZ�[OYV\NO�Sport. 15

24. "Dobrodošli na BHFanaticos.com." Dobrodošli na BHFanaticos.com. http://www.bhfanati-cos.com/

25. International Sports and Culture Association. Guidelines for Good Governance in Grass-roots Sports. 7

26. Haider, Huma. “(Re)Imagining Coexistence: Striving for Sustainable Return, Reintegration and Reconciliation in Bosnia and Herzegov-ina.” The International Journal of Transitional Justice 100

27. Ibid, 101

28. Council of Europe and EPAS. Targeting Social

*VOLZPVU�PU�7VZ[*VUÅPJ[ Societies through Sport. 13

29. Sport For Development and Peace Interna-tional Working Group. Harnessing the Power of Sport for Development and Peace: Re-commendations to Governments. 213

30. “Open Fun Football Schools Cross Cultures Project Association | CCPA.” International GrassrootsFootball Cross Cultures Project Association | CCPA.

31. Udsholt, Lars. Evaluation Study: CCPA’s Open Fun Football Schools Programme. 25

32. Ibid

33. Sport For Development and Peace Internation-al Working Group. Harnessing the Power of Sport for Development and Peace: Recom-mendations to Governments. 222

34. Udsholt, Lars. Evaluation Study: CCPA’s Open Fun Football Schools Programme. 28

35. Council of Europe and EPAS. Targeting Social *VOLZPVU�PU�7VZ[*VUÅPJ[�:VJPL[PLZ�[OYV\NO�Sport. 26

36. Council of Europe and EPAS. Targeting Social Cohesion in 7VZ[*VUÅPJ[�:VJPL[PLZ�[OYV\NO�Sport. 27

37. Ibid, 15

38. UN Volunteer Report: Civil Society in Bosnia and Herzegovina Seeking the Way Forward. 9

39. UN Volunteer Report: Civil Society in Bosnia and Herzegovina Seeking the Way Forward. 10

40. Ibid

41 "Sport sans frontières | Axes du projet." Sport sans frontières | Accueil. http://www.sportsansfrontieres.org/fr/missions/kosovo/axes¬du¬projet (accessed June 30, 2013).

Bibliography(UUHU��2VÄ��7YLZZ�9LSLHZL�:.�:4� ��


292014Spring

Belloni, Roberto. State Building and International Intervention in Bosnia. London: Routledge, 2007.

Council of Europe and EPAS. Targeting Social *VOLZPVU�PU�7VZ[�*VUÅPJ[�:VJPL[PLZ�[OYV\NO�Sport. 2011.http://www.coe.int/t/dg4/epas/W\ISPJH[PVUZ�/HUKIVVR�F:WVY[7VZ[*VUÅPJ[-Societies.pdf

"Dobrodošli na BHFanaticos.com." Dobrodošli na BHFanaticos.com. http://www.bhfanaticos.com/ (accessed June 30, 2013).

Haider, Huma. "(Re)Imagining Coexistence: Striv-ing for Sustainable Return, Reintegration and Reconciliation in Bosnia and Herzegovina." The International Journal of Transitional Jus-tice 3 (2009): 91-113.

International Sports and Culture Association. Guidelines for Good Governance in Grass-roots Sports. Copenhagen, 2013.

Jahic, Nedim (Youth Activist). Interview by author. Personal interview. Hotel Bosnia, Sarajevo, June10, 2013.

"Open Fun Football Schools Cross Cultures Project Association | CCPA." International Grassroots Football Cross Cultures Project Association | CCPA. http://ccpa.eu/what-wedo/openfunfootballschools/ (accessed June 30, 2013).

Mills, Richard. "'It All Ended In An Unsporting Way: Serbian Football And The Disintegration Of Yugoslavia, 1989 2006." International Journal of the History of Sport 26, no. 9 (2009):1187-1217.

Mostar Tour Guide (Tour Guide). Interview by au-thor. Personal interview. Mostar, June 12, 2013.

Pickering, Paula. Peacebuilding in the Balkans: The View From The Ground Floor . Cornell, NY: Cornell University Press, 2007.

Sport For Development and Peace International Working Group. Harnessing the Power of Sport for Development and Peace: Recom-mendations to Governments. 2008.

"Sport sans frontières | Axes du projet." Sport sans

frontières | Accueil. http://www.sportsans-frontieres.org/fr/missions/kosovo/axesdupro-jet (accessed June 30, 2013).

Udsholt, Lars. Evaluation Study: CCPA’s Open Fun Football Schools Programme. 2011. http://JJWH�L\�ÄSLHKTPU�\ZLYF\WSVHK�KH[H�ÄSLZ�IPSSLKLY�^OH[^LKV�L]HS\H[PVUZYL]PL^Z�ÄUHS-YLWVY[L�]HS\H[PVUZ[\K`VќZTH`��\KZOVS[-nicolajsenmfadksida.pdf

U.N. General Assembly. "Resolution 61/10 [Sport as a means to promote education, health, development and peace]". 8 December 2006.

United Nations InterAgency Task Force on Sport for Development and Peace. Sport for Devel-opment and Peace: Towards Achieving the Millenium Goals. 2003. http://www.un.org/wcm/webdav/site/sport/shared/sport/pdfs/Reports/2003_interagency_report_ENG-LISH.pdf

UN Volunteer Report: Civil Society in Bosnia and Herzegovina Seeking the Way Forward. ��O[[W!��^^ �̂\U]�IH�ZP[LZ�KLMH\S[�ÄSLZ�CivilSocietyinBosniaandHerzegovinaSeek-ingtheWayForward.pdf

Vulliamy, Ed. "How Bosnia's pioneering footballers are Succeeding Where the Politicians Failed." The Guardian, September 5, 2011. http://www.guardian.co.uk/world/2011/nov/05/bosniafootballerssucceedingpoliticiansfailed (accessed June 29, 2013).

Youth Information Agency Bosnia Herzegovina (OIA). Independent Evaluation of the National Youth Policy in Bosnia Herzegovina. Sarajevo, Bosnia. 2005.

Zero (Tour Guide). Interview by author. Personal interview. Sarajevo, June 11, 2013.


JUIS30

OL�PU[LY^HY�`LHYZ�VM�PZVSH[PVUPZ[�HUK�HWWLHZLTLU[�WVSPJPLZ�¶J\STPUH[PUN�PU�[OL�4\UPJO�*VUMLYLUJL�VM�� ¶�HUK�P[Z�JVUZLX\LUJLZ�^LYL�H�MVYTH[P]L�L_WLYPLUJL�MVY�IV[O�[OL�(TLYPJHU�HUK�)YP[PZO�^HY[PTL�generation. American President Lyndon B. Johnson called it “the clearest lesson of… [his] time,” while British Prime Minister Anthony Eden stated that the “lessons of the thirties and their application

[V�[OL�ÄM[PLZ¹�̂ LYL�[OL�YLHZVU�MVY�̂ YP[PUN�OPZ�H\[VIPVNYHWO �̀�+LZWP[L�ZOHYPUN�ZPTPSHY�]PL^Z�VU�[OL�ZPNUPÄJHUJL��HSSLNLK�clarity, and even policy-relevance of the lessons of appeasement, the postwar foreign policies of each country il-S\Z[YH[L�UV�Z\JO�HNYLLTLU[�VU�[OL�SLZZVU»Z�HWWSPJH[PVU��;OYV\NO�[YHJPUN�[OL�KPќLYPUN�\ZHNLZ�VM�[OL�4\UPJO�HUHSVN`�within the early Cold War foreign policies of the US and Great Britain, this paper argues that pre-existing intellectual paradigms within each country’s respective foreign policy community determined contrary interpretations of the Munich analogy. By way of theorizing the role of the Munich analogy, also argued more generally is that the process of historical analogizing is both subjective and experiential, and that a country’s particular history must be factored into any analysis of its employment of analogies.

Introduction: Memory of Appeasement

The failure to confront fascism before the Second World War haunted states-men in Washington and London long after the war ended. Recalling their countries’ and their own experiences in the 1930s, many were committed to learning the les-sons of the past and to preventing their repetition. Former Prime Minister Anthony Eden described in his 1960 memoirs his involvement in the events, recounting the era of the Munich Conference. Only months before Prime Minister Neville Chamberlain returned from Munich de-

claring “peace in our time,” and just one year before Germany attacked Poland, Eden, protesting Chamberlain’s appease-ment policies, resigned as Foreign Secre-tary. Over twenty years later, he named his memoirs “Full Circle,” so as to emphasize how the present world resembled this troubled past. Eden explained his reasons for the book and its title: “the lessons of [OL�[OPY[PLZ�HUK�[OLPY�HWWSPJH[PVU�[V�[OL�ÄM-ties are the themes of my memoirs.”1 The LTWSV`TLU[� VM� [OPZ� OPZ[VYPJHS� TLTVY`� ¶in short, the Munich analogy.2 However, despite both nations’ experiences with the consequences of appeasement in

the 1930s; and even more fascinatingly, despite politicians in the postwar period on both sides of the Atlantic declaring to have learned the same lessons of Munich, the two nations did not agree with each other’s application of the analogy. To ex-plain this divergence however, one must look beyond the Munich analogy. Both the Americans and the British invoked the past only in accordance with their respec-tive pre-existing intellectual frameworks, that is, their pre-existing particular ways of seeing and analysing the world. As a result of the two countries’ dissimilar in-tellectual frameworks, the Americans and

An Ambiguous Lesson:

T

by Dexter Fergie

Dexter Fergie. A recent graduate from the University of British Columbia, Dexter is interested in Cold War intellectual history, and in particular, questions concerning the production and circulation of knowledge between universities, the private sector, and states. He will begin his masters in History at the same university this fall.

Tracing the Analogy in Anglo-American Relations

312014Spring

British could not agree on when those important “lessons of the thirties” were to be applied. Britain, with its intellectual framework grounded in a traditional impe-rial history, recalled the Munich analogy when their immediate strategic, econom-ic, or colonial interests were threatened, while the United States, seeing the world [OYV\NO�[OL�PU[LSSLJ[\HS�MYHTL^VYR�ÄYZ[�LZ-poused by Woodrow Wilson, invoked the analogy when the liberal world order was threatened.

From these empirical claims regard-ing the United States and Great Britain, this paper will also argue more theoreti-cally that historical memory and historical analogizing depend on particular contexts and intellectual frameworks operating on a national level. This analysis will argue against Yuen Foong Khong’s over-esti-mation of analogies, as he outlined in his book, Analogies at War.3 Whereas he ex-plains foreign policy decisions through the HUHSVNPJHS�YLHZVUPUN�VM�MVYLPNU�WVSPJ`�Z[Hќ��this paper suggests that an intellectual framework must already be presupposed.

The Munich Analogy: Les-sons drawn by both the British and Americans

The term “historical analogy,” accord-ing to Khong, refers to an “inference that if two or more events separated in time agree in one respect, then they may also agree in another.” Functionally, these are “intellec-tual devices” employed by policymakers “to perform a set of diagnostic tasks rel-evant to political decision-making.”4 First,

the policymaker uses previous experience [V�KLÄUL�[OL�UH[\YL�VM�[OL�J\YYLU[�WYVISLT�within the coordinates of the past. This highlights similarities between the previous experience and the matter at hand, while HSZV�JVUJLHSPUN�HU`�KPќLYLUJLZ�[OL`�TH`�have. Thus the stakes of the current issue HYL�WYV]PKLK��HUK�[OL�LѝJHJ`�HUK�¸YPNO[-ness” of any alternative solutions to it may be measured against the analogue expe-rience. Taking these tasks together, the analogy helps the policymaker understand [OL�J\YYLU[�WYVISLT�¶IV[O�[OL�UH[\YL�HUK�WV[LU[PHS� JVUZLX\LUJLZ� VM� [OL� WYVISLT¶�and prompts him towards certain policy options, while discouraging others.

The Munich analogy in particular was the analogy most powerfully inform-

ing Washington and London’s decision-making in the immediate postwar years. President Lyndon B. Johnson called it “the clearest lesson of… [his] time,” while his Secretary of State Dean Rusk declared the historical episode “the principal lesson” from the Second World War.5 On the Brit-ish side meanwhile, in his famous postwar speech, the “Sinews of Peace” speech, Churchill grounded the argument for

confronting the Soviet Union in the tragic lessons from the West’s appeasement policies.6 These lessons drawn from their L_WLYPLUJL�^P[O�MHZJPZT�PU�[OL�� Z�ÄYT-ly implanted a disdain for appeasement within the American and British minds.7

;OL� ÄYZ[� HUK� TVZ[� JLU[YHS� SLZZVU�learned from the 1930s and Munich is the following: “aggression left unchecked leads to general war later.”8 In other words, if small acts of aggression are not ad-dressed early on, they will accumulate and KL]LSVW� PU[V� H�T\JO� SHYNLY� JVUÅPJ[�� HUK�eventually draw in other nations, such as the United States. The failure of the West to act against fascist belligerence in the 1930s resulted in the Second World War. Policymakers conjured up this imagery of

fascist behavior repetitively when faced with violent or aggressive acts committed by other countries in the postwar era.

Analogizing to the 1930s in order to describe current foreign policy issues fur-thermore provides the statesman with a considerable sense of the stakes involved. “Our problem is to prevent World War III,” explained Dean Rusk, which is urgent be-cause “no one is going to learn any les-

An Ambiguous Lesson:Tracing the Analogy in Anglo-American Relations/ Dexter Fergie

"Analogizing to the 1930s in order to describe current foreign policy issues furthermore provides the statesman

with a considerable sense of the stakes involved. "

JUIS32

sons from World War III.”9 The British also shared this view of the gravity of appease-ment. When describing Nasser’s regime as a “fascist government” at the height of the Suez Crisis in 1956, Prime Minister An-thony Eden stated, “we all remember, all too well, what the cost can be in giving in to Fascism.”10�9\ZR�HUK�,KLU�KLÄULK�[OL�nature of the current problem within the coordinates of 1930s fascism, and then from this, estimated costs.

The second element of the Munich analogy is the foreclosure of anything resembling a compromise with aggres-sors. Debating to intervene in Korea in 1950, President Harry Truman’s advisors all agreed with his analysis that “refusal to repel the aggression would be nothing but ‘appeasement’… And appeasement as history has shown,” continued Truman, “would ultimately lead to war.”11 This fear of appeasement instructed policymakers, such as Truman to avoid political and dip-lomatic settlements with aggressors, such HZ�*OPUH�HUK�[OL�:V]PL[�<UPVU�¶ÔV�^LYL�using Kim Il-Sung as a pawn, the Ameri-cans thought, to expand the boundaries VM�[OL�*VTT\UPZ[�̂ VYSK¶�HUK�[V�MH]VY�TPSP-tary intervention.

The British also employed this ele-ment of the analogy. Again in reference to the Suez Crisis, Eden implicitly employed the Munich analogy to deny the possibility of negotiations:

I could not return from Geneva with a piece of paper and commend it to the House of Commons, when I knew it had no real value… I had been through so

much of this before…12

Eden referenced his own experience as the Foreign Secretary during the 1930s and Prime Minister Chamberlain’s theatri-cal waving of the Anglo-German Declara-tion (“a piece of paper”) upon returning from the Munich Conference. The point was clear: negotiating with aggressors like Hitler and Mussolini, and by analogy, Nasser, was meaningless.

Although it is evident that the Munich analogy helped frame issues for both Brit-ish and American leaders in the postwar WLYPVK��[OL�[^V�ZPKLZ�YLHJOLK�]LY`�KPќLY-ent conclusions regarding the analogy’s application. In the two case studies to IL� L_HTPULK� ¶[OL� (TLYPJHU� H[[LTW[� [V�PU[LY]LUL� PU� =PL[UHT� PU� � �� HUK� )YP[-ish reaction to Egyptian President Gamal Nasser’s nationalization of the Suez Canal PU�� ¶� [OL� YLSL]HUJL�VM� [OL�HWWSPJH[PVU�was disputed. These disagreements point to a lack of explanatory power in the Mu-nich analogy. Khong rightly argues that ¸[OL�4\UPJO�HUHSVN`�THNUPÄLK�[OL�Z[HRLZ�VM�=PL[UHT�MVY�[OL�<UP[LK�:[H[LZ�ILJH\ZL�it envisioned a 1930s syndrome in South-east Asia.”13 Although this is true, the Mu-nich analogy cannot fully explain why the United States “envisioned a 1930s syn-drome” for this particular region, especially because the country equally gripped by the analogy, England, did not agree with the Americans’ geopolitical diagnosis.14

As the historian Frank Ninkovich ^YP[LZ��[OL�4\UPJO�HUHSVN`�¸ZWLJPÄLK�VUS`�what was not permitted, the only practical injunction deducible from it being a nega-

[P]L� ¶º;OV\� ZOHS[� UV[� HWWLHZL»¶� ÔPJO�ruled out any attempts at negotiation.”15 By providing no clear positive policy in-junctions, Khong’s analysis gives the anal-ogy too much emphasis at the expense of another critically important conceptual stage in the determination of American and British foreign policy in the postwar years. The lessons of the Munich anal-VN`�^LYL�ÄS[LYLK�[OYV\NO�LHJO�JV\U[YPLZ»�OPZ[VYPJHS�KPќLYLUJLZ�HUK�WYL�L_PZ[PUN�JVU-ceptualizations of world politics. As this paper will argue in the following section, the intellectual framework belonging to the Americans was a Wilsonian worldview.

Wilsonian Paradigm: The Metaphor of a Domino World

During the battle of Dien Bien Phu, Eisenhower explicitly detailed his so-called domino theory:

You have broader consider-ations that might follow what you would call the “falling domino” principle. You have a row of dom-inoes set up, you knock over the ÄYZ[�VUL��HUK�ÔH[�^PSS�OHWWLU�[V�the last one is the certainty that it will go over very quickly. So you have a beginning of a disintegra-tion that would have the most WYVMV\UK�PUÅ\LUJLZ¯16

Walking his audience through this worst-case scenario, Eisenhower then predicted the losses of Indochina, Burma, Thailand, and Indonesia. This obsession over the hyper-interdependence of the geopolitical world, Ninkovich argues, is


332014Spring

the American intellectual paradigm.17

The domino metaphor, capturing the worldview of American foreign policy makers, had immediate consequences as to how the world is interpreted. The metaphor emphasizes the principle of “strategic interdependence,” which, ac-cording to Keith Shimko obscures na-[PVUHS� KPќLYLUJLZ"� [OL� KVTPUV� PTHNLY`�makes no distinctions between domi-noes. “Physically, dominoes are alike and interchangeable,” and whatever dif-ferences do exist, “do not alter a domi-no’s susceptibility to being knocked over in a chain reaction.” Shimko rightfully concludes that this tendency to over-SVVR�UH[PVUHS�KPќLYLUJLZ�JHUUV[�IL�KL-rived solely from the Munich analogy.18 It stems instead from the worldview of former American President Woodrow Wilson.

Writing shortly after the armistice of the First World War, Wilson stated, “The facts of the world have changed.”19 Upon witnessing how the world was pulled into a local European war, Wilson anticipated future local wars would also LZJHSH[L� PU[V�TVYL�NLULYHS�JVUÅPJ[Z�� 0U�a letter, Wilson wrote, “any quarrel how-ever small, however limited the ques-tions it involves, may again, if carried to [OL�WVPU[�VM�^HY��RPUKSL�H�ÅHTL�[OYV\NO-out the world.”20 No longer could the national interest lie solely in the imme-diate strategic and economic spheres. With a hyper-connected world of domi-noes ready to fall interest was expanded to include the very maintenance of this

interdependent world, bringing previously peripheral swathes of territory into the realm of national security. An NSC report from September 1953 communicated this UL^�KLÄUP[PVU�VM�[OL�UH[PVUHS�PU[LYLZ[!

The principle of collective security... if it is to continue to survive as a deterrent to contin-ued piecemeal aggression and a WYVTPZL�VM�HU�L]LU[\HS�LќLJ[P]L�world security system, should be upheld even in areas not of vital strategic importance.21

The periphery had become the center for the makers of American foreign policy.

Incommensurability: The Munich Analogy in Anglo-American Relations (I) Dominoes, History, and the near-decision to go to War:

In the spring of 1954, when notable =PL[UHTLZL� .LULYHS� =V� 5N\`LU� .PHW�JVTTHUKLK� [OL�=PL[TPUO� [YVVWZ�HNHPUZ[�12,000 elite French soldiers in a decisive battle at the isolated fortress of Dien Bien Phu, the French were stumbling into a “de-teriorating situation.”22 The United States were watching the events with a deep-ZLH[LK�HU_PL[`"� PM� [OL�=PL[TPUO�KLMLH[� [OL�French and take control of the country, [OL`� MLHYLK�� 0UKVJOPUH�^V\SK�IL� [OL� ÄYZ[�domino of the region to fall to communism ¶H�]PJ[PT�VM�:V]PL[�HUK�*OPULZL� PTWLYPHS-ism.23

While the battle of Dien Bien Phu ^HZ� ILPUN� MV\NO[� IL[^LLU� [OL� =PL[TPUO�and the French, Dulles communicated the

(TLYPJHU�JVUJLYU�MVY�=PL[UHT�HUK�[OL�YL-gion at a press conference:

The United States feels that that possibility should not be passively accepted but should be met by united action. This might involve serious risks. But these risks are far less than those that will face us a few years from now if we dare not be resolute today… The chances for peace are usually bettered by letting a potential aggressor know in advance where his aggression could lead him.24

The lesson is relayed clearly: to not address this act of aggression in the pres-ent would only beget a much more serious crisis in the future.

Consequently Dulles proposed a “United Action;” that is, a coalition com-posed of the United States, Great Britain, France, New Zealand, Australia, and the Associated States of Indochina to pro-tect Indochina from the Communist ag-gressors. Congress secretly endorsed intervention under three conditions: “sat-isfactory commitment” of allies including Britain, an unequivocal French promise to grant independence to Indochina, and another French promise that they would not withdraw prematurely. While they were well aware of the lack of interest among Americans in embarking alone on another “Korea,” Dulles and Eisenhower pursued [OL�ÄYZ[�JVUKP[PVU�^P[O�L_[YLTL�KPSPNLUJL��as the very concept of “United Action” de-pended on it.25


JUIS34

In its attempt to summon support for a United Action, the administration went to great lengths to convince the British that inaction in 1954 would repeat the er-rors of 1938. In a pleading private letter to Churchill, Eisenhower appeals to their shared history of dealing with fascism:

If I may refer again to history, we failed to halt Hirohito, Mus-solini and Hitler by not acting in unity and in time. That marked the beginning of many years of stark tragedy and desperate per-il. May it not be that our nations have learned something from the lesson?26

,PZLUOV^LY�KLÄULK� [OL�J\YYLU[� ZP[\-ation in Indochina within the terminology of 1930s fascism. According to the anal-ogy, the aggressive behavior and plans of world domination of Japan, Italy, and Germany were substituted for the Soviet Union and China.

(S[OV\NO�*O\YJOPSS�^V\SK�ÄUK�HNYLL-ment with Eisenhower’s explication of Munich’s lessons, he disagreed with the application of this lesson to a region such as Indochina. Writing only a few days later, Churchill responds rather tersely to Eisenhower: “We discussed your pro-posal about Indo-China in the Cabinet this morning… it is however a topic which raises many problems for us.”27 He did not intend on committing economic or even military aid to a territory in which the Brit-ish had “no historic connection.”28

Churchill’s response to Dulles spoke to the conceptualizations of global politics separating Britain from the United States. While Eisenhower and his administration

applied the lessons of Munich to a stra-tegically and economically peripheral part VM�[OL�^VYSK�¶HZ�[OL�>PSZVUPHU�^VYSK]PL^�HUK� +VTPUV� [OLVY`� PUZ[Y\J[LK� [OLT� [V¶�Churchill and the British opposed the ap-plication. They did not share the American specter of the falling domino theory and believed that their own colonial posses-sions, such as Malaya, could be defended from the Communist threat even if Indo-china slipped out of the imperial arms of France. As Indochina did not belong to the British Empire, Churchill and his cabi-net were not concerned with defending it. In contrast to the American Wilsonian worldview, the British response points to a more traditional national interest grounded in strategic and economic factors. The dif-ferences between these two paradigms

HYL�M\Y[OLY�JSHYPÄLK�PU�[OL�)YP[PZO�\ZHNL�VM�the Munich analogy during the Suez Crisis.

(II) The Suez Canal Crisis and ‘that Hit-ler on the Nile’

Only two years later, Prime Minister Anthony Eden’s cabinet embarked on its own application of the Munich analogy re-garding the so-called Suez Crisis in Egypt,

^OPJO�[OL�(TLYPJHUZ�ÄYTS`�YLW\KPH[LK��(�British colonial possession since the previ-ous century, Egypt was a relic of the former greatness of the British Empire. However, the British position was severely chal-SLUNLK� I`� [OL� -YLL� 6ѝJLYZ»� 9L]VS\[PVU��which overthrew the British-backed King Farouk, and brought Nasser to power.29 Despite this, the British interest in Egypt did not wane. For geographical reasons, Egypt was the crossroads of the Com-monwealth, linking Britain to its colonies and other economically important regions in the Far East. The British also saw Egypt as a critical bulwark for European defense, “the geopolitical pivot of the Middle East and North Africa… [and] the shield of Af-rica against Russian expansion.”30 Finally, in addition to economic and strategic in-

terests, England wished to save what was left of their Empire during the fast-moving decolonization period.31

;OL�JVUÅPJ[�V]LY�[OL�:\La�*HUHS�IL-gan in July 1956 when the United States, Great Britain, and the World Bank all with-drew promises to fund the Aswan Dam project. Only days later, Nasser decided [V�UH[PVUHSPaL�¶VY�HZ�9VUHSK�/`HT�W\[Z�P[��


"The American framework –a Wilsonian international-ism– predisposed Washington to invoke the memories

of Munich during crises that threatened the liberal world VYKLY��YLNHYKSLZZ�VM�PTTLKPH[L�Z[YH[LNPJ�HUK�LJVUVTPJ�

interests. "

352014Spring

¸Z[YPJ[S �̀�KL�PU[LYUH[PVUHSPaL¹¶�[OL�:\La�*H-nal Company, which brought about imme-diate pandemonium within the Eden cabi-net. At a meeting on 27 July, Eden and his Z[Hќ�HNYLLK�[OH[��¸MHPS\YL�[V�OVSK�[OL�:\La�Canal would lead inevitably to the loss one by one of all …[their] interests and assets in the Middle East.” 32 From this, one can observe that British concerns for Egypt had little to do with the Cold War or the maintenance of the liberal world order, but rather the survival of their Empire.

As the crisis was unfolding, Eden’s cabinet continuously drew parallels to the 1930s. Eden himself made the compari-ZVU�[V�MHZJPZ[�0[HS`�¶L]LU�JOYPZ[LUPUN�5HZZ-er a “Moslem Mussolini”33¶�^OPSL�HSZV�LT-ploying the Munich analogy numerously throughout the crisis as well. For instance, at one point Eden stressed the importance of reducing “the stature of the megaloma-niacal dictator at an early stage. A check to Hitler when he moved to occupy the Rhineland would not have destroyed him, but it would have made him pause.”34 Evi-dently Eden drew from Munich the general lesson that aggression must be addressed early on.

The other aspect of the Munich anal-VN`� ¶¸;OV\� ZOHS[� UV[� HWWLHZL¹35¶� MVYL-closed the possibility of a diplomatic settlement. Upon depicting Nasser and the Crisis as analogous to the fascists of the 1930s, Eden and his cabinet favored H� TPSP[HY`� YLZVS\[PVU� [V� [OL� JVUÅPJ[�� ;OPZ�is suggested by Eden’s comment that “the Arabs will interpret any other course short of military intervention as a sign of weakness.”36 Due to this unwillingness [V� ZLLR�H�ULNV[PH[LK�LUK� [V� [OL�JVUÅPJ[��

the British interfered with both attempts [V� YLZVS]L� [OL�*YPZPZ�KPWSVTH[PJHSS`�ÄYZ[�H[�the Menzies Commission and then at the Anglo-French-Egyptian talks planned for Geneva.37

;OL� )YP[PZO� MHJLK� H� KPѝJ\S[� [HZR� VM�persuading the Americans of their use of the Munich analogy. Resembling the tone and urgency of Eisenhower’s own letter to Churchill during the Dien Bien Phu crisis, Eden wrote to Eisenhower:

In the 1930s Hitler estab-lished his position by a series of carefully planned movements. These began with the occupa-tion of the Rhineland and were followed by successive acts of aggression against Austria, Czechoslovakia, Poland and the West. His actions were tolerated and excused by the majority of the population of Western Eu-rope…38

After imparting this rhetorical history lesson, Eden then posited the parallels be-tween the 1930s and the current situation in Egypt, claiming Nasser to be following in the footsteps of Hitler. Nasser, he wrote, is conducting a “planned campaign” to YLTV]L� HSS� >LZ[LYU� PUÅ\LUJL� MYVT� (YHI�countries. According to Eden, he was even going to “mount revolutions of young VѝJLYZ�PU�:H\KP�(YHIPH��1VYKHU��:`YPH��HUK�Iraq,” eventually leading to a “united Ara-bia” in possession of all Middle Eastern oil. From this diagnosis of the Suez Crisis, Eden concluded with a subtle proposal to intervene militarily.39

Eisenhower’s reply speaks to the incommensurability of their respective

geopolitical worldviews. Harshly criticiz-ing Eden’s hyperbolic reaction to Nass-er, Eisenhower warned Eden that such phrases, as “ignoble end to our long his-[VY �̀¹�KPK�UV[OPUN��I\[�PUÅH[L�5HZZLY»Z�PT-portance, while reducing England’s own power. Overall, Eisenhower wrote, Eden’s depiction was “…a picture too dark and is severely distorting.”40

Moreover, despite their own frustra-tions over Nasser’s “diplomatic black-mail”41 towards the United States, in which Nasser supposedly toyed with the two superpowers, Eisenhower, as well Dulles, were unequivocal in their warnings against the use of force. In another letter, Eisen-hower couched his cautioning of the use of force within symbolic terms:

[T]he peoples of the Near East and of North Africa and, to some extent, of all of Asia and all of Africa, would be consolidated against the West to a degree which, I fear, could not be over-come in a generation.42

Whereas Eden emphasized the prob-lems of the Crisis in terms of the strate-gic, economic, and prestigious losses to the British Empire, Eisenhower was con-cerned not just with Egypt or the British Empire. He feared that the largest threat to the liberal world order would be the reac-tion of world opinion against the West due to Britain’s military campaign in Egypt.43 Not agreeing with the application of the Munich analogy, Dulles attempted to or-chestrate a political settlement out of the *YPZPZ�� ^OPJO� ^HZ� L]PKLU[S`� UV[� [OL� ÄYZ[�resort when the Americans invoked the Munich analogy during the Dien Bien Phu


JUIS36

crisis.

ConclusionWhile analogical reasoning is critical

in all mental activities, including the con-duct of foreign policy, one cannot omit the subject’s own pre-existing notions, and experience from determining the mean-ing of an analogy. Analogies are not no-tions freely suspended in the air without any attachment to a mind, but as mental processes themselves, they presuppose a mind. This is precisely where Khong’s analysis goes awry. For the Munich anal-VN`� [V� PUÅ\LUJL�(TLYPJHU� MVYLPNU� WVSPJ �̀�the American mind must have already been constituted by some intellectual MYHTL^VYR�� ;OL� (TLYPJHU� MYHTL^VYR� ¶H�>PSZVUPHU� PU[LYUH[PVUHSPZT¶� WYLKPZWVZLK�Washington to invoke the memories of Munich during crises that threatened the liberal world order, regardless of immedi-ate strategic and economic interests. In contrast, Britain’s usage of the analogy derived from their imperial past, in which their national interest was determined not by the international order, but the welfare of its empire. This predisposed them to employ the analogy when, and only when, their strategic, economic, and prestigious interests were at risk.

These disagreements over the appli-cation of the Munich analogy illustrate the ambiguity of the 1930s lessons and of his-torical analogies more generally. The pro-cess of historical analogizing is both sub-jective and experiential, and to understand the meaning of analogies used, one must factor in the country’s particular history

and national concerns. It appears, how-ever, that among the policymakers there was an awareness of this; during a meet-ing between President Johnson, his advi-sors, and former President Eisenhower on the eve of the escalation of the American ^HY� LќVY[� PU� =PL[UHT�� ,PZLUOV^LY� THKL�a comment, in which he recognized this intellectual incommensurability between the United States and Great Britain. Eisen-hower observed “Prime Minister Wilson of the U.K. had not had experience with this kind of problem. We, however, have learned that Munichs win nothing.”44 Al-though sharing the experiences of the Sec-ond World War and the struggle against fascism, both countries remembered and YLJHSSLK� KPќLYLU[� OPZ[VYPLZ� ¶L]LU� KPќLYLU[�¸4\UPJOZ¹¶�K\YPUN�KPќLYLU[� JYPZLZ� PU�W\Y-suing their postwar foreign policies, and as Eisenhower explains, neither could under-stand the other’s analogizing.

Endnotes1. Quoted in Peter Beck, Using History, Making

British Policy: The Treasury and the Foreign 6ѝJL�� /HTWZOPYL!�7HSNYH]L�Macmillan, 2006), 8.

2. As a disclosure, I use synonymously the les-sons of Munich, Appeasement, the 1930s, fascism, Hitler, Mussolini, and Hirohito, because the primary documents themselves often substitute one term for another. In this regard, as the clearest example of appease-ment, the Munich analogy is only taken to IL�[OL�ZPNUPÄLY�MVY�[OL�TVYL�NLULYHS�OPZ[VYPJHS�memory of the international struggle against fascism, and its consequences.

3. Yuen Foong Khong, Analogies at War: Korea, Munich, Dien Bien Phu, and the Vietnam Decision of 1965. (New Jersey: Princeton University Press, 1992).

4. Khong, Analogies at War, 6-7; 20.

5. Lyndon B. Johnson, “The President’s News Conference,” April 27, 1965. Online by Gerhard Peters and John T. Woolley, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=26917; Transcript, Dean Rusk Oral History Interview II, 9/26/69, by Paige E. Mulhollan, Internet Copy. LBJ Library, http://www.lbjlib.utexas.edu/johnson/archives.hom/oralhistory.hom/rusk/rusk02.pdf.

6. Winston Churchill, “Sinews of Peace,” March 5, 1946. Transcript by National Churchill Mu-seum, http://www.nationalchurchillmuseum.org/sinews-of-peace-iron-curtain-speech.html.

7. Addressing the problem of truth in political discourse, Khong conducted a quantita-tive analysis of the analogies employed by ZLUPVY�VѝJPHSZ�^VYRPUN�PU�(TLYPJHU�MVYLPNU�policy between 1950 and 1966. Assuming that politicians speak their mind much more genuinely in private than they do in the public record, Khong compared the public and private uses of analogies. Khong discovered that analogies to the 1930s were some of the most popular in both spheres, which suggests that these analogies were not used retrospectively to justify policy decisions, but PU�MHJ[�OLSWLK�ZLUPVY�VѝJPHSZ�MYHTL�J\YYLU[�issues. See Khong, Analogies at War, 60.

8. Ibid., 64.

9. Dean Rusk Oral History Interview II.

10. Quoted in Scot Macdonald, Rolling the Iron Dice: Historical Analogies and Decisions to Use Military Force in Regional Contingencies. (Connecticut: Greenwood Press, 2000), 126.

11. Quoted in Ernest May, “Lessons” of the Past: The Use and Misuse of History in American Foreign Policy. (New York: Oxford University Press, 1973), 82.

12. Quoted in Macdonald, Rolling the Iron Dice, 122-23.

13. Khong, Analogies at War, 184.

14. Churchill to Eisenhower, 7 April 1954, in ed. Peter G. Boyle, The Churchill-Eisenhower Correspondence, 1953-1955. (Chapel Hill: University of North Carolina Press, 1990), 139.


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15. Frank Ninkovich, Modernity and Power: A History of the Domino Theory in the Twentieth Century. (Chicago: The University of Chicago Press, 1994), 187.

16. Quoted in Lloyd C. Gardner, Approach-ing Vietnam: From World War II Through Dienbienphu. (New York: W.W. Norton and Company, 1988), 196-97.

17. Ninkovich, Modernity and Power, xi.

18. Keith L. Shimko, “Metaphors and Foreign Policy Decision Making,” Political Psychology 15, no.4 (Dec. 1994), 667.

19. Ninkovich, Modernity and Power, 51.

20. Ibid., 83.

21. NSC Minutes, 21 December 1954, AWF: NSC Series; FRUS 1952-1954, 2: 496, quoted in Ninkovich, Modernity and Power, 223.

22. Richard H. Immerman, John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy. (Detroit: Scholarly Resources Inc., 1999), 87; James R. Arnold, The First Domino: Eisenhower, the Military, and America’s Intervention in Vietnam. (New York: William Morrow and Company, Inc., 1991), 113.

23. Ninkovich, Frank. Modernity and Power: A History of the Domino Theory in the Twentieth Century. (Chicago: The University of Chicago Press, 1994), 193.

24. Speech to the Overseas Press Club, New York City, March 29, 1954, quoted in ed. Marvin Gettleman et al. Vietnam and Ameri-ca: The Most Comprehensive Documented History of the Vietnam War (Second Edition). (New York: Grove Press, 1995), 50.

25. Arnold, The First Domino, 167-170; Immer-man, John Foster Dulles, 91-92.

26. Eisenhower to Churchill, April 4, 1954, quoted in ed. Boyle, Churchill-Eisenhower Corre-spondence, 138.

27. Ibid., 139.

28. Churchill quoted in Arnold, The First Domino, 193.

29. Ronald Hyam, Britain’s Declining Empire: The Road to Decolonisation, 1918–1968. (Cambridge: Cambridge University Press, 2006), 224.

30. Ibid., 221.

31. John Charmley, Churchill’s Grand Alliance: The Anglo-American Special Relationship, 1940-57. (Great Britain: Hodder and Stoughton, 1995), 313.

32. Hyam, Britain’s Declining Empire, 227.

33. Eden to Eisenhower, Nov. 5, 1956, quoted in Boyle, Eden-Eisenhower Correspondence, 183.

34. Quoted in Macdonald, Rolling the Iron Dice, 123.

35. Ninkovich, Modernity and Power, 187.

36. Quoted in Macdonald, Rolling the Iron Dice, 130.

37. Macdonald, Rolling the Iron Dice, 129-31.

38. Eden to Eisenhower, Sept. 6, 1956, quoted in ed. Boyle, Eden-Eisenhower Correspon-dence,165.

39. Eden to Eisenhower, Sept. 6, 1956, quoted in ed. Boyle, Eden-Eisenhower Correspon-dence, 165.

40. Eisenhower to Eden, Sept. 8, 1956, quoted in ed. Boyle, Eden-Eisenhower Correspon-dence, 167.

41. Macdonald, Throwing the Iron Dice, 133.

42. Eisenhower to Eden, Sept. 2, 1956, quoted in ed. Boyle, Eden-Eisenhower Correspon-dence, 163.

43. Macdonald, Throwing the Iron Dice, 134.

44. Memorandum of a Meeting With President Johnson, 17 February 1965, Foreign Rela-tions of the United States, 1964-1968, II: 133.

BibliographyAmbrose, Stephen. “Bricker, McCarthy, Bravo,

Vietnam.” In Eisenhower: Volume II: The

President. New York: Simon and Schuster, 1983.

Arnold, James R. The First Domino: Eisenhower, the Military, and America’s Intervention in Vietnam. New York: William Morrow and Company, Inc., 1991.

Beck, Peter. Using History, Making British Policy: ;OL�;YLHZ\Y`�HUK�[OL�-VYLPNU�6ѝJL�� 76. Hampshire: Palgrave Macmillan, 2006.

ed. Boyle, Peter G. The Eden-Eisenhower Cor-respondence, 1955-1957. Chapel Hill: University of North Carolina Press, 2005.

ed. Boyle, Peter G. The Churchill-Eisenhower Correspondence, 1953-1955. Chapel Hill: University of North Carolina Press, 1990.

Charmley, John. Churchill’s Grand Alliance: The Anglo-American Special Relationship, 1940-57. Great Britain: Hodder and Stoughton, 1995.

Churchill, Winston. “Sinews of Peace,” March 5, 1946. Transcript by National Churchill Mu-seum. Accessed February 11, 2014. http://www.nationalchurchillmuseum.org/sinews-of-peace-iron-curtain-speech.html

Gardner, Lloyd C. Approaching Vietnam: From World War II Through Dienbienphu. New York: W.W. Norton and Company, 1988.

ed. Gettleman, Marvin et al. Vietnam and America: The Most Comprehensive Documented History of the Vietnam War (Second Edition). New York: Grove Press, 1995.

Hyam, Ronald. Britain’s Declining Empire: The Road to Decolonisation, 1918–1968. Cam-bridge: Cambridge University Press, 2006.

Immerman, Richard H. John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy. Detroit: Scholarly Resources Inc., 1999.

Johnson, Lyndon B.. The Vantage Point: Perspec-tives of the Presidency, 1963-1969. USA: /,*�7\ISPJ�(ќHPYZ�-V\UKH[PVU��

Johnson, Lyndon B.. “The Presdent’s News Conference,” April 27, 1965. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. Accessed April 1, 2013. http://www.presidency.ucsb.edu/


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ws/?pid=26917

Johnson, Lyndon B.. “We Will Stand in Vietnam.” Pamphlet, Department of State, August 1965. Accessed April 1, 2013. http://www.history.navy.mil/library/special/stand_vietnam.htm

Khong, Yuen Foong. Analogies at War: Korea, Munich, Dien Bien Phu, and the Vietnam Decisions of 1965. New Jersey: Princeton University Press, 1992.

Macdonald, Scot. Rolling the Iron Dice: Historical Analogies and Decisions to Use Military Force in Regional Contingencies. Connecti-cut: Greenwood Press, 2000.

May, Ernest. “Lessons” of the Past: The Use and Misuse of History in American Foreign Policy. New York: Oxford University Press, 1973.

Memorandum of a Meeting With President John-son, 17 February 1965, Foreign Relations of the United States, 1964-1968, II: 133.

Ninkovich, Frank. Modernity and Power: A His-tory of the Domino Theory in the Twentieth Century. Chicago: The University of Chicago Press, 1994.

Ninkovich, Frank. The Wilsonian Century: U.S. Foreign Policy Since 1900. Chicago: The University of Chicago Press, 1999.

9LJVYK��1LќYL �̀�4HRPUN�>HY��;OPURPUN�/PZ[VY`!�Munich, Vietnam, and Presidential Uses of Force from Korea to Kosovo. Maryland: Naval Institute Press, 2002.

Rusk, Dean. As I Saw It. New York: Norton & Co., 1990.

Shimko, Keith L. “Metaphors and Foreign Policy Decision Making,” Political Psychology 15.4 (1994), 655-671.

Transcript, Dean Rusk Oral History Interview II, 9/26/69, by Paige E. Mulhollan, Internet Copy. LBJ Library. Accessed April 1, 2013. http://www.lbjlib.utexas.edu/johnson/ar-chives.hom/oralhistory.hom/rusk/rusk02.pdf

Zeiler, Thomas W. Dean Rusk: Defending the American Mission Abroad. Detroit: Scholarly Resources Inc., 2000.


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n the 1970s, both Chile and Argentina experienced military coups leading to brutal military dicta-torships that embraced neoliberal economic policies. This paper argues that despite their surface similarities, Argentinian and Chilean neoliberalism arose from unrelated phenomena. While Chilean policymakers sought to emulate Milton Friedman and other American economists, Argentinian lead-

ers drew upon decades-old loathing for Peronism when crafting their economic policy.

IOn March 24, 1976, a military junta

SLK�I`�.LULYHS�1VYNL�9HMHLS�=PKLSH�ZLPaLK�control of the Argentinian government. Referring to itself as the “National Reorga-nization Process,” or Proceso, the military government set out to fundamentally re-structure the state, society, and economy. Jose Martínez de Hoz assumed control of [OL�ÄUHUJL�TPUPZ[Y`�HUK�ILNHU� PUZ[P[\[PUN�liberal economic policies, slashing price JVU[YVSZ��HUK�SPM[PUN�WYV[LJ[PVUPZ[�[HYPќZ��:P-multaneously, the military embarked on a horrifying process of nearly indiscriminate torture, kidnapping, and murder that left [LUZ�VM�[OV\ZHUKZ�KLHK��,ќVY[Z�I`�WVSP[PJHS�scientists and economists to contextualize and explain the two central facets of the 7YVJLZV�YLNPTL�¶�[OL�YPZL�VM�ULVSPILYHSPZT�HUK�[OL�YPZL�VM�L_[YLTL�YLWYLZZPVU�¶�OH]L�generally been undertaken in separate spheres. Scholars look to the contempo-

rary international context to explain the rise of neoliberalism, examining the rise VM�ULVSPILYHS�[OV\NO[�^P[O�Z\JO�ÄN\YLZ�HZ�Milton Friedman and Augusto Pinochet of Chile. The internationally focused analysis contrasts with the historical analysis un-dertaken to examine the regime’s repres-sive tactics. Scholars tend to examine the regime’s repression as a product of the military’s struggle against Peronism, which began after the coup of 1955. Thus, in the current literature, the Proceso’s neo-liberal policies are contextualized within the contemporary international conditions, while the regime’s repressive policies are contextualized within historical country-ZWLJPÄJ�JVUKP[PVUZ��

This paper will argue that an inter-nationally focused analysis of the rise of ULVSPILYHSPZT� \UKLY� .LULYHS� =PKLSH� PZ� PU-complete. When contextualized within the twenty-year struggle between the military

and Peronist unions, the regime’s choice of neoliberal economic policies takes on a more sinister role. Neoliberal policies dev-astate unions and the working class in the ZOVY[� Y\U��9LK\JPUN� [HYPќZ� YH]HNLZ� PULѝ-cient domestic industry, causing wages to plunge, real prices to rise as price controls are eliminated, and unemployment to in-crease, weakening the collective bargain-ing power of unions. In essence, the ef-fects of neoliberal economic policies were the perfect complement to the Proceso’s WVSP[PJHS� YLPNU�VM� [LYYVY�¶�IV[O�^VYRLK� [V-wards eliminating the political and eco-nomic power of the entity most hated by the regime, Peronist unions. Thus, this paper proposes a framework of analysis in which the regime’s repression and neo-liberal economic policies are not separate organisms, but two arms of one anti-Per-onist beast.

This analysis will be undertaken in

Distinguishing Pinochet and the Proceso:

by Hannah Mullen

Hannah Mullen. Hannah Mullen is a junior Government concentrator at Harvard College. At Harvard, Hannah is also a member of the women's lacrosse team and an Undergraduate Associate at [OL�>LH[OLYOLHK�*LU[LY�MVY�0U[LYUH[PVUHS�(ќHPYZ��:OL�PZ�J\YYLU[S`�YLZLHYJOPUN�TPSP[HY`�Q\Z[PJL�YLMVYT�MVY�her senior thesis and hopes to attend law school after she graduates.

I

International and Domestic Frameworks of Analysis for the Rise of Neo-

liberalism under Authoritarianism in the Southern Cone, 1973-1981

JUIS40

stages. First, a literature review will exam-ine the current frameworks within which Argentina’s neoliberal policies are analyzed. Second, the Proceso will be necessarily dis-tinguished from Pinochet’s Chile, the more MHTV\Z�HUK�X\P[L� PUÅ\LU[PHS� JHZL�VM�HU�H\-thoritarian Southern Cone government in the 1970s implementing neoliberal economic policies. Finally, and most importantly, the rise of neoliberal economic policies during the Proceso will be examined from the per-ZWLJ[P]L�VM�[OL�[^V�KLJHKL�JVUÅPJ[�IL[^LLU�military forces and the Peronist unions.

IIThe work of Karen Remmer, Hector

Schamis, and John Sheahan has followed PU� [OL� PUÅ\LU[PHS� MVV[Z[LWZ� VM� (YNLU[PUPHU�political scientist, Guillermo O’Donnell by examining the rise of neoliberalism and au-thoritarianism in Latin America in the 1970s as a wave. In other words, they focus on common in-ternational conditions that can explain the rise of a new strand of authoritarianism in [OL�� Z�PU�3H[PU�(TLYPJH�¶�VUL�[OH[�KPќLYZ�Z\IZ[HU[PHSS`�from O’Donnell’s famous Bureaucratic Authoritarian model, which described the rise of military regimes in the 1960s oriented towards state-led economic development.

Hector Schamis, in Reconceptualiz-ing Latin American Authoritarianism in the 1970s: From Bureaucratic Authoritarianism to Neoconservatism, works to distinguish

the Chilean and Argentinian coups of the 1970s from O’Donnell’s bureaucratic authoritarian cases of Brazil and Peru in the 1960s. He explains that bureaucratic authoritarian regimes sought the “deepen-ing” of the productive structure through heavy state involvement in the economy,1 a model that does little to explain the “second wave” of authoritarianism in the 1970s.2 The regimes of the 1970s, such as Chile and Argentina, reversed the deepening of the productive structure, banned collective representation, and disavowed corporatism in pursuit of a so-cial order regulated by market relations. Without cooptation, regimes were left only with coercion as an available tool to deal with opposition.3 Within Schamis’s work, ^L� ÄUK� [^V� [OLTLZ� JVUZPZ[LU[S`� LJOVLK�throughout the literature on Chile and Ar-gentina in the 1970s: repression was a

tool to squash opposition to new neolib-eral economic policies, and the two cases were part of a larger ideological wave of authoritarianism that swept across the Southern Cone in the 1970s.

John Sheahan, in Market-Oriented Economic Policies and Political Repres-sion in Latin America, echoes Schamis’s argument that political repression stems from neoconservative regimes’ desire to preserve unpopular economic restruc-turing. He notes that market-oriented economic policies are associated with limitations on arbitrary actions by gov-ernment in Western Europe and North America, but in Latin America the op-posite seems to be true.4 Sheahan ar-gues that the structural characteristics of Latin American economies, including concentrated holdings of wealth and resources, high poverty rates, and “du-alistic labor markets in which a small minority of workers with regular em-ployment have incomes from greater than the average in agriculture or in fringe urban occupations,” predispose

high societal oppo-sition to neoliberal policies and encour-age accompany-ing political repres-sion.5 Sheahan and Schamis both argue that the repressive tactics of Pinochet’s Chile and the Pro-ceso stemmed from the regimes’ desire

to implement unpopular neoliberal eco-nomic policies.

Finally, the work of Karen Rem-mer makes explicit an implicit assump-tion that can be found throughout the

Distinguishing Pinochet and the Proceso: International and Domestic Frameworks of Analysis for the Rise of Neoliberalism under Authori-tarianism in the Southern Cone, 1973-1981/Hannah Mullen

-PUHSS �̀�HUK�TVZ[�PTWVY[HU[S �̀�[OL�YPZL�VM�ULVSPILYHS�economic policies during the Proceso will be exam-PULK�MYVT�[OL�WLYZWLJ[P]L�VM�[OL�[^V�KLJHKL�JVUÅPJ[�between military forces and the Peronist unions."

412014Spring

analysis of neoliberal economic policies. In Evaluating the Policy Impact of Mili-tary Regimes in Latin America, Remmer provides an overview of the debate be-tween economists and political scientists regarding the success or failure of military governments in promoting economic de-velopment. She reviews the arguments of two groups of scholars: one arguing that military governments tend to promote so-cioeconomic development, and a second arguing the opposite. Despite the con-ÅPJ[PUN� WLYZWLJ[P]LZ�� HSS� [OL� HYN\TLU[Z�reviewed by Remmer center around the assumption that any regime, authoritarian or democratic, chooses economic policy with the intention of furthering economic progress in their country. This is an as-sumption that will be seriously challenged upon closer examination of the Proceso’s neoliberal regime.

IIIRemmer, Sheahan, Schamis, and

O’Donnell’s wave-based analysis of 1970s Latin America produces two central con-clusions: that military governments sought to improve the economic outcomes within their country, and that repression was a necessary component of instituting neo-liberal reforms. The characterization of neoconservatism as a wave that swept across Latin America in the 1970s encour-HNLZ� [OL� JVUÅH[PVU� VM� [OL� *OPSLHU� HUK�Argentinian cases. However, as Paul G. )\JOHUHU�Z[H[LZ� PU�¸;OL�=HYPLK�-HJLZ�VM�Domination: State Terrror, Economic Pol-icy, and Social Rupture during the Argen-

tine Proceso,” the understanding that “the prescription of Martínez de Hoz and his “liberal” colleagues was awarded further credence […] by the fact that his policies were being followed with apparent suc-cess by the military regime in neighboring Chile”6� VIZJ\YLZ� KLLW� HUK� JYP[PJHS� KPќLY-ences between the Chilean and Argen-tinian cases. The comparison between Chile and Argentinian neoliberal economic WVSPJPLZ�KLTHUKZ�[^V�WYLJVUKP[PVUZ!�ÄYZ[��an explanation of neoliberal economic philosophy and second, an overview of both regimes’ policy choices. Following the necessary background, this paper dis-tinguishes the Argentinian case from the Chilean case, arguing that concentrating on an internationally focused framework of analysis provides an incomplete expla-nation for the rise of neoliberalism in the Argentinian Proceso.

“Neoliberal” refers to the resurgence VM�SPILYHS�LJVUVTPJ�WOPSVZVWO �̀�HZ�ÄYZ[�WPV-neered by Adam Smith, the Scottish politi-cal economist considered to be the found-ing father of liberal economic thought. The individual takes center stage in liberal phi-losophy; the best interests of society are promoted only when the individual is able to pursue his or her best interests. Thus, there is a strong emphasis on freedom ^P[OPU�SPILYHS�[OV\NO[��HZ�KLÄULK�I`�H�SHJR�of intervention in individual decisions and HќHPYZ��-VY� [OL� SPILYHS��LJVUVTPJ� MYLLKVT�is paramount; removing the government from the economic arena leaves the indi-vidual free to pursue whatever consump-tion, employment, and investment deci-

sions he so chooses and leads to better outcomes for the whole of society.7 The mid-20th century revival of liberal thought was led by economists, such as Milton Friedman, who lashed out against the perceived failure of Keynesian economics, while advocating for smaller government and market-led growth models. In 1973, a group of neoliberal economists known as the Chicago Boys took hold of economic policy in Chile and instituted the most radi-cal free-market experiment in history.8

After overthrowing Salvador Allende’s democratic socialist experiment in 1973, General Pinochet and his military regime in Chile turned to the Chicago Boys to craft economic policy. In October 1973, the military government announced that the YLK\J[PVU�VM�PUÅH[PVU��^OPJO�OHK�L_JLLKLK�600 percent in the past 12 months, was one of its main economic goals; other im-portant short-term goals included reduc-ing government controls, reducing the ÄZJHS� KLÄJP[�� YLVYNHUPaPUN� [OL� WYVK\J[P]L�sector, and avoiding a major balance-of-payments crisis.9 In 1973 and 1974, the regime followed a gradualist approach to KL�PUÅH[PVUHY`� WVSPJ`� HUK� YLK\JPUN� NV]-ernment expenditures, with limited suc-cess. Still, 18 months after the ascen-ZPVU�VM�7PUVJOL[�[V�OLHK�VM�Z[H[L��PUÅH[PVU�remained out of control, with the growth rate of consumer prices reaching 370 per-cent in 1974.10 In April 1975, the regime abandoned its gradualist approach for a drastic shift in policy known as the “shock treatment.” An across-the-board slash-ing of government expenditures between


JUIS42

15 percent and 25 percent, a 10 percent temporary hike in income taxes, an ac-JLSLYH[LK� LќVY[� [V� WYP]H[PaL� W\ISPJS`� OLSK�enterprises, and a tight monetary policy MVSSV^LK�� 0UÅH[PVU� WYVTW[S`� KYVWWLK� [V�26 percent in the fourth quarter of 1975, and the shock program was ended in early 1976.11 Next, the regime moved to nearly LSPTPUH[L�[HYPќZ��YLK\JPUN�[OLT�MYVT�HU�H]-erage of 94 percent in 1973 to an average of 33 percent in 1976, and devaluing the Chilean peso by pegging it to the dollar in 1979.12

The devaluation of the peso, com-bined with a glut of OPEC (Organization of the Petroleum Exporting Countries) oil rev-enues, seeking overseas investment, led to an immense growth of foreign investment in the Chilean economy between 1979 and 1981. The so-called “Chilean Miracle” SLK�[V�Z[\UUPUN�NYV^[O�YH[LZ�¶HU�H]LYHNL�of 8.5 percent per year between 1977 HUK�� ¶�[OH[�JHTL�[V�HU�HIY\W[�LUK�PU�the deep recession of 1981 and 1982.13 Although the stunning growth rates of the late 1970s did not last, the structural changes induced by the Chicago Boys did. Industries that traditionally enjoyed a high level of protection, such as textiles and leather goods experienced large loss-es and widespread bankruptcies, after the trade liberalization. But some industries survived by introducing new technologies, NYLH[S`�PUJYLHZPUN�LѝJPLUJ �̀�HUK�HKVW[PUN�modern management systems.14 In short, the Chilean experience with neoliberalism was one of explosive growth followed by ULHY�ÄZJHS�JVSSHWZL�PU�[OL�LHYS`�� Z�[OH[�

had far-reaching sectoral consequences for industry.

Meanwhile in 1976, the Argentinian military seized power from the govern-ment of Isabel Perón in the context of Y\UH^H`�PUÅH[PVU�MVSSV^PUN�[OL�LSPTPUH[PVU�of price ceilings in June 1975.15 The new regime instituted a three-part plan to [HJRSL�PUÅH[PVU��-PYZ[��P[�JVU[YVSSLK�KLTHUK�through wage restraints that pushed worker incomes down by 56 percent in real terms between 1976 and 1978.16

Second, the government turned to restrictive monetary policy in June 1977 and freed interest rates from Central Bank control. Finally, the tablita monetary policy of 1979 and 1980 allowed the devaluation rate of the peso to trail behind the domes-[PJ� YH[L� VM� PUÅH[PVU�17 Though the tablita yielded very little success in regards to JVTIH[PUN�PUÅH[PVU��P[�OHK�H�Y\PUV\Z�LќLJ[�VU� KVTLZ[PJ� ÄYTZ��THU`� VM� ^OVT�^LYL�driven out of business due to price advan-[HNLZ� HќVYKLK� [V� MVYLPNU� JVYWVYH[PVUZ�18 (SVUNZPKL� P[Z�HU[P�PUÅH[PVUHY`�WVSPJPLZ�� [OL�Proceso implemented major banking liber-

HSPaH[PVU�HUK�H�KYHTH[PJ�KYVW�PU�[HYPќ�YH[LZ�on exportable goods.

The surface similarities between the Chilean and Argentinian cases encour-age an analysis of the rise of neoliberal-ism under the Proceso that focuses on contemporary international conditions. As pointed out by Schamis and other propo-nents of “wave” theories of neoliberalism, the Argentinian regime rose to power only three years after Pinochet’s coup, and ex-hibited a host of common characteristics:

two repressive Southern Cone authori-tarian regimes in the 1970s that rejected state-led development models and re-placed them with market-oriented tech-niques. When discussing the Argentinian Proceso, Schamis argues that “this regime […] was not unique,” and goes on to point out that Pinochet’s Chile also exhibited re-pressive tactics and neo-laissez-faire prin-ciples.19 But beyond the broad common-alities, the two regimes’ experiences with neoliberalism diverge in a variety of ways, suggesting that the example of Chilean


"The surface similarities between the Chilean and Argentinian cases encourage an analysis of the rise of neoliberalism under the Proceso that focuses on

contemporary international conditions."

432014Spring

neoliberalism did not play a central role in determining the Proceso’s economic policy choices.

A closer examination of the two re-gimes reveals a range of questions left unanswered by an international-focused analysis of the rise of neoliberalism in the Proceso, suggesting the need to exam-ine the Proceso’s economic policies from a more historical point of view. While the Chilean Chicago Boys were academic technocrats determined to construct the purest form of neoliberalism possible, Ar-gentina’s Martínez de Hoz embodied the anti-Peronist alliance between the military and the landed elite. Therefore, though the ZPNUPÄJHU[�PU[LYUH[PVUHS�PUÅ\LUJL�VM�4PS[VU�Friedman and other pioneers of neolib-eralism validates the hypothesis that the Pinochet regime’s neoliberalism stemmed from an “wave” of economic thought, the Argentine case demands an alternative, more historical, perspective.

IVThe Chilean Chicago Boys, as aca-

demics removed from Chilean politics un-

til being recruited to join Pinochet’s junta

in 1973, sought to implement in the real

world the neoliberal economic principles

they had learned under the tutelage of

4PS[VU�-YPLKTHU��5H]HS�VѝJLYZ��\UKLY�[OL�

leadership of captains Troncoso, Castro,

HUK� 3VWLa�� ^LYL� [OL� ÄYZ[� TLTILYZ� VM�

the military to advocate a coup in 1973.20

Troncoso, Castro, and Lopez realized that

gime; most notably, they gained control over economic policymaking.

Though the Chicago Boys were cer-tain that neoliberal economic policies were the best choice for Pinochet’s young mili-tary regime, members of the ruling junta were less sure. The Chicago Boys cam-paigned to win over General Pinochet and the rest of the military, many of who were worried about the political consequenc-es of skyrocketing prices on imported goods.24 In 1973, they worked to imple-ment their ‘gradualist’ plan, which paired a removal of price controls on goods and services with current devaluation; this combination resulted, predictably, in dra-matic price increases on imported goods on which Chile was very dependent.25 The Chicago Boys faced backlash within the regime; junta member Admiral Merino furi-ously stated that the price increases were “intolerable […] the military junta cannot be increasing prices. We will be accused of killing the people with hunger.”26 The NYHK\HSPZ[�WSHU�^HZ�PULќLJ[P]L�H[�YLK\JPUN�PUÅH[PVU�� ZV�� PU� � �� [OL� *OPJHNV� )V`Z�designed their ‘shock’ plan. Already fac-ing skepticism about their past policies, the Chicago Boys launched an extensive SVII`PUN� LќVY[� [V� JVU]PUJL� [OL� Q\U[H� [V�HWWYV]L� KLLW� ÄZJHS� ZOVJRZ� HUK� YLZ[YPJ-tive monetary policy, even bringing Milton Friedman to Chile.27 In a whirlwind of pub-lic appearances and television interviews, Friedman insisted that economic reforms by the military government had not gone far enough; he insisted that unless “the diseased parts of the economy were am-

they would have no idea how to run the

economy should a coup succeed and,

through their network, reached out to

Orlando Saenz, the president of the As-

sociation of Chilean Manufacturers. The Association had a research department whose head, Sergio Undurraga, was an economist trained at the Catholic Uni-versity of Santiago and formed part of the local Chicago network. The network consisted of a group of American-trained Chilean economists, who sensing the changing political winds had begun meet-ing informally to discuss the state of the economy. At the urging of the three na-val captains the meetings were formalized and plans were drawn up for the economy in the event of Allende’s downfall.21 The economists at the meetings, soon to be known as the Chicago Boys, were prod-ucts of a U.S. government program that partnered the University of Chicago with Chile’s Catholic University. Between 1956 and 1961, approximately 150 promising Chilean students of economics received full graduate fellowships at the University of Chicago, where they were immersed in the free trade doctrine of professors, such as Milton Friedman.22 As Joseph Collins writes in Chile’s Free Market Miracle: A Second Look, “Many of these Chicago Boys took on the theoretical certitude of their mentors and returned crusader-like to Chile,” determined to spread neoliberal philosophy to their countrymen.23 After the coup, the Chicago Boys were appointed to various positions throughout the re-


JUIS44

W\[H[LK�[OL�ÄUHS�JVZ[Z�^V\SK�IL�OPNOLY�¹28 Won over, Pinochet approved the plan in April 1976, and the ensuing slashes in government spending and contraction of the money supply plunged the country even deeper into recession.29

The intra-regime dynamics between the military junta and the Chicago Boys reveal the depth of the Chicago Boys’ de-votion to Friedman’s neoliberal philosophy. Collins explains that the Chicago Boys were “Determined that the economy would be managed on technical rather than so-cial criteria.”30 As a result, the Chicago Boys set aside immediate general wel-MHYL�PU�MH]VY�VM�SV^LYPUN�PUÅH[PVU�HUK�V[OLY�X\HU[PÄHISL� HJJVTWSPZOTLU[Z�31 In the short run, they advocated neoliberal poli-cies with consequences for the working class, so harsh they alarmed even Admiral Merino and other brutal generals responsi-ble for turning Chile’s national soccer sta-dium into a concentration camp.32 But the *OPJHNV�)V`Z�ÄYTS`�ILSPL]LK�[OH[�[OL�OPNO�short-term costs of unemployment and recession would yield even higher long-[LYT�ILULÄ[Z� MVY�WYVK\J[PVU�HUK�Z[HIPSP[ �̀�and would eventually form the foundations for a stable democratic system. When ac-cused of being anti-democratic, a seem-ingly bewildered Chicago Boy wondered aloud, “We are making a policy in order to lose power, how can we be concentrating it?”33 In short, Pinochet’s economic poli-cymakers were academics, casting aside social consequences and determined to implement the most pure form of neolib-eral economics possible. Therefore, the

hypothesis by Schamis and Sheahan that neoliberalism was a product of the political environment surrounding Latin America in the 1970s can be applied to the Chilean JHZL��;OL�OLH]`�PUÅ\LUJL�VM�4PS[VU�-YPLK-man, the University of Chicago’s program with Chile’s Catholic University, and the Chicago Boys’ technocratic fervor for pure neoliberal philosophy reveal the extent to which neoliberalism in Chile was ideologi-cally linked to forces outside its borders.

However, the hypothesis that neolib-eralism arose in Latin America in the 1970s due to the international environment does not apply as easily to the Argentinian case. Unlike the Chicago Boys, Jose Martínez de Hoz had been involved in Argentine politics for decades before the 1976 coup HUK�OPZ�HWWVPU[TLU[�I`�=PKLSH�HZ�4PUPZ[LY�of Economics in the Proceso. Martínez de Hoz was a former Secretary of Agriculture, VѝJLY�VM�H� SHYNL� SHUKV^ULY»Z�HZZVJPH[PVU�(the Sociedad Rural Argentina), Business Council director, and academician; he had also served as an economic advisor to the military government that overthrew Arturo Frondizi in a 1962 coup.34 Beyond his ex-tensive credentials and past experience, he “symbolized through his personal inter-ests the unity of agrarian, industrial, and ÄUHUJPHS�JVUJLYUZ�¹35 As an heir to one of Argentina’s wealthiest, most well known, and aristocratic families of the agricultural elite, he ensured that the interests of the landed upper class were well represented within the Proceso. More importantly, he WLYZVUPÄLK� [OL�\UKLYS`PUN�WYLTPZL�VM� [OL�Proceso’s rule: an alliance between the

military hierarchy and the upper bour-geoisie built upon “a mutual dedication to the eradication of Peronism as a social and political force in Argentina, something that had been repeatedly attempted with-out success since the overthrow of the ÄYZ[� 7LYVUPZ[� YLNPTL� PU� � ��¹36 Martínez de Hoz, unlike the technocratic Chicago Boys, was a political actor entrenched in the protracted ideological battle against Peronism waged by the military and Ar-gentinian landed elite. As a result, his de-cision to spearhead the implementation of neoliberal economic policies is not served by an analysis focusing on the surrounding international factors.

VMartínez de Hoz, and the Proceso as

a whole, were shaped by variables and ideology contained within the history of Argentina. In order to fully understand and contextualize the Proceso’s embrace of neoliberal economic philosophy, one must turn not to the international context, but instead to the ongoing struggle between two central forces in Argentinian society: the military and Peronism.

Juan Perón served as Argentina’s president from 1946 to 1955.37 During his political rise and reign, pro-working class populist rhetoric spawned Peronism, a movement that incorporated the working class into Argentinian political life. Dur-ing Perón’s term, the working class made both institutional and social advance-ments; the relationship between govern-ment and labor, the extent of unioniza-


452014Spring


tion, and the number of union-sponsored members of congress grew exponentially, as did the less tangible factors of working-class pride, self-respect and dignity.38 Af-ter the military overthrew Perón, in a coup in 1955,39 the Peronist union movement evolved, from the principle institutional channel of the working class’s allegiance to Perón, into the keeper of Perón’s ideol-ogy and legacy. Peronism was more than a union movement, or a political party with the goal of empowering the working class, deeply tied to the identity of being working-class in Argentina, it encapsu-lated the promise of empowerment and self-respect.40

In 1955, after overthrowing Perón, General Pedro Eudenio Aramburu and Admiral Isaac Rojas set up a military re-gime with policy based on the assumption that Peronism was an aberration that had to be eliminated from Argentinian soci-ety.41 All Peronist entities were banned in an attempt to exorcise it from political and economic life; Peronist political parties, unions, and any type of Peronist gathering were banned. The government attempted to remove an entire generation of Peronist [YHKL� \UPVU� VѝJPHSZ� MYVT� M\Y[OLY� \UPVU�activity, consistently repressed and intimi-dated grass-roots union organizations and YHUR�HUK�ÄSL�HJ[P]PZ[Z��HUK�^VYRLK�[V�OVSK�down wages, while restructuring the col-lective bargaining system.42 The military regime hoped to return Argentina to dem-ocratic rule after having purged Peronism from its midst, but Peronism refused to budge. Though forced underground, Per-

onism remained powerfully attractive to the working class; as a result, the military and civilian leaders confronted, what Guill-ermo O’Donnell refers to as, the “impos-sible game.”

In the impossible game, Argentinian leaders faced a no-win situation, in order to return Argentina to a full democracy, as was the goal, Peronism would have to be permitted in the electoral arena. But in 1962 and 1965, civilian govern-ments’ attempts to re-legalize Peronism led to military coups, as the military re-mained staunchly anti-Peronist. As a re-sult, Argentina remained in an apparently unshakeable state of political instability.43 The military’s attempts to weaken Per-VUPZT� OHK� IHJRÄYLK"� 7LYVUPZT� ^HZ� UV[�only surviving the systematic attempts to dismantle its union movement and eradi-JH[L�P[Z�PUÅ\LUJL�^P[OPU�[OL�^VYRPUN�JSHZZ��but it was becoming stronger than ever. By the mid-1960s, Peronism was an entity of great social and political power. In fact as Daniel James states in, Resistance and Integration: Peronism and the Argentine working class, “together with the armed forces [Peronist unions] were, indeed, the two fundamental poles around which Ar-gentine society seemed to revolve.”44

In May 1973, Juan Perón returned triumphantly from exile to again serve as president, an experiment that quickly de-volved into a crisis marked by uncontrolla-ble political polarization, mismanagement of the economy, and severely damaging international economic trends.45 In March 1976 the military overthrew Perón’s widow

and former vice president, Isabel Perón, more determined than ever to stamp out Peronism as a social, political, and eco-nomic force.46 In the words of General 1VYNL�9HMHLS�=PKLSH��ÄYZ[�WYLZPKLU[�VM� [OL�Proceso, “In March 1976, our nation was gripped by one of the most profound cri-ses of its existence, and, without a doubt, the gravest in its contemporary history . . . [a] total crisis, whose most salient point was the total breakdown of the institu-tional system, as power had reached a phase of disaggregation that left Argentina framed in a picture of increased feudal-ization and headed towards extinction.”47 The military, and their elite allies, believed that Peronism was the source of the eco-nomic and political instability that had plagued Argentina for over two decades.48 Faced with civil disorder and economic collapse, the new military regime launched a massive campaign of state terror aimed at eliminating Peronism once and for all.

By reducing the populace to a qui-escent citizenry incapable of generating opposition, the regime hoped to use ter-ror and repression to permanently end the power of Peronism. Military leaders were remarkably candid in explaining the ratio-nale behind state terrorism. General Luci-ano Menendez, then head of the strategic ;OPYK� (YT`� 9LNPVU� PU� *VYKVIH�� VќLYLK�a particularly blunt explanation, stating that “We are going to have to kill 50,000 people: 25,000 subversives, 20,000 sym-pathizers, and we will make 5,000 mis-takes.”49 The judicial system was disre-garded, along with habeas corpus, due

JUIS46


process, and the right to a trial.50 The de-liberate and tragic randomness of those ]PJ[PTPaLK�I`� Z[H[L� [LYYVY� ¶[OL� HIK\J[LK��tortured, and killed include scores of preg-UHU[�^VTLU��JOPSKYLU��HUK�[OL�LSKLYS`¶�PZ�a testament to the regime’s determination to blanket society in crippling fear. The military even placed torture centers near towns, so that the residents could hear the victims’ screams of agony.51

Unsurprisingly, the majority of the vic-tims of the Proceso’s “dirty war” came from social groups associated with supporting Peronism. Forty percent of all those dis-appeared, or kidnapped by government forces and never seen again, were trade union activists and union members.52 An-other 19 percent came from occupations directly related to working class, par-ticularly journalists, medical doctors, and teachers.53 But the Proceso’s targeting of the working class Peronist base stretched MHY� IL`VUK� P[Z� LќVY[Z� [V� RPKUHW�� [VY[\YL��and kill. The navy did not only spearhead [OL� ¸HU[P�Z\I]LYZP]L¹�LќVY[Z��HZ�Z[H[L� [LY-ror was known, but also controlled the Ministry of Social Welfare.54

Through the programs administered by the Ministry of Social Welfare, the navy expanded its assault on the work-PUN�JSHZZ��.LULYHSS �̀� [OL�HTV\U[�VM�ÄUHU-cial resources allocated to public health and social security were cut by more than half between 1976 and 1981.55 The total number of beds provided by public hospi-tals decreased by more than 25 percent, and public hospitals and medical attention facilities in working-class neighborhoods

were systematically closed, most often on the grounds that there was a scarcity of demand.56 Simultaneously, price controls on basic medical products were lifted, causing the expenses associated with caring for oneself outside of a hospital to skyrocket.5These more subtle forms of repression caused disease and mortal-ity rates among the working-class popu-lation to increase dramatically between 1976 and 1981.58 In summary, the Pro-ceso’s determination to target Peronism’s political and economic base manifested itself politically, through state terror, and socially, through the massive drawdown of public health services in low-income neigh hoods.

VIWhen examined within the frame-

work of the Proceso’s determination to stamp out Peronism, the regime’s em-brace of neoliberal economic policies ap-pears more sinister. Minister of Economy Martínez de Hoz, heir to one of Argenti-na’s most well known landed aristocratic names, represented the interests of Ar-gentina’s agricultural elites. 59 As both a landed aristocrat and a former member of the 1962 coup coalition, he also embod-ied the alliance between Argentina’s upper bourgeoisie and military hierarchy. 60 As Paul Buchanan explains, social and mili-tary elites in Argentina believed that “the roots of Argentina’s demise as a world power harked back to the advent of Per-onism as a political and social force in the mid-1940s. Consequently, the underlying

premise of their rule was a mutual dedi-cation to the eradication of Peronism as a social and political force in Argentina.”

61 Thus, the regime’s embrace of neolib-eral principles and rhetoric can be con-ceptualized within the Proceso’s larger anti-Peronist struggle. Peronism was not just a social and political force that could be targeted with fewer hospital beds and YHTWHU[�Z[H[L�[LYYVY�¶�P[�̂ HZ��ÄYZ[�HUK�MVYL-most, an economic actor. Therefore, state measures targeting Peronism were social, political and economic in nature; neoliberal economic policies undermined Peronist unions’ bargaining ability and power, while state repression discouraged dissent, and social policies targeted the working class Peronist base.

Not only had the events of the 1960s shaped Peronist unions into formidable opponents for the military, but structural conditions also strengthened Peronism’s role in society: Argentina’s historically low birth rate led to a relative scarcity of la-bor.62 The resulting low rate of unemploy-ment that remained throughout Argentine history gave unions a disproportionately strong bargaining position, since there was no reserve labor pool for employers to draw from in the event of a strike.63 Neo-liberal economic policies adopted by the regime, therefore, were crucial to raising the rate of unemployment and breaking the power of unions. Opening domestic THYRL[Z�I`� SV^LYPUN� [HYPќZ�^HZ�KLZPNULK�to eliminate industries, in which unions had the most strength, and also punish “traitorous” domestic entrepreneurs, who

472014Spring


had allied themselves with the Peronists in previous years.64 After the ensuing wave of bankruptcies, the large pool of unem-ployed labor could then be used to break the power of unions in other economic sectors. As Paul Buchanan states, “The unique obstacles posed by the Peronist movement—especially its socioeconomic bases, ideological orientation, organiza-tional strength, and mobilizational ability—required an economic, political, and social strategy that would diminish Peronism as a force at all three levels.”65 Contextual-ized within the regime’s determination to eliminate Peronism, neoliberal economic policies may be conceptualized as yet an-other bludgeon used on the working class.

Further evidence that the Proceso considered neoliberalism to be part of a multi-pronged repressive strategy comes from the navy’s vehement defense of Mar-[xULa�KL�/Va�H[�[OL�LUK�VM�.LULYHS�=PKLSH»Z�term. In the last week of March 1980, the Banco Intercambio Regional collapsed, HUK� [OYLL�TVYL�VM� [OL�UH[PVU»Z� SHYNLZ[� Ä-UHUJPHS� PUZ[P[\[PVUZ�¶)HUJV�KL�SVZ�(UKLZ��)HUJV�6KKVUL��HUK�)HUJV�0U[LYUHJPVUHS¶�followed in the next few days.66�-VY�[OL�ÄYZ[�[PTL��YLNPTL�VѝJPHSZ�ILNHU�VWLUS`�X\LZ-tioning Martínez de Hoz; several times during late April and May, he and his entire ministerial cabinet were called before high-YHURPUN� VѝJPHSZ� MYVT� HSS� IYHUJOLZ� VM� [OL�armed forces. In an unprecedented pub-lic expression of disapproval for the eco-nomics minister, Commander-in-Chief of the Air Force, Brig. General Omar Rubens

=PVSH�W\YWVZLS`�RLW[�OPZ�WSHUZ�]HN\L��OPZ�speech suggested that he eventually en-visioned a possible process of national re-democratization. Thus, political repression and neoliberal economic policies moved in tandem in the Proceso. The regime’s war against Peronism, championed by the UH] �̀�MLSS�V\[�VM�MH]VY�\UKLY�[OL�=PVSH�NV]-ernment.

Further study of the Proceso’s selec-tion of ‘neoliberal’ policies indicates that economic policymaking was subordinate to overall repressive tactics. Unlike the Chicago Boys of Chile, who were deter-mined to craft the purest form of neolib-eral free-market economics possible, the Proceso instituted neoliberal reforms in a piecemeal and half-hearted manner that revealed its utter lack of interest in the academics and philosophy surrounding the policies. Far from a technocratic fas-cination with free market economics, the Argentinian military regime systematically subordinated neoliberal philosophy to its scheme of wide scale and brutal repres-sion. The military imposed a range of con-ditions on economic policymaking, with the insistence that no actions that might impede the “anti-terrorist campaign” were acceptable. Most policies that in any way SPTP[LK� [OL� TPSP[HY`»Z� KPYLJ[� PUÅ\LUJL� HUK�power over the citizenry were blocked in the name of national defense. Public en-terprises remained unprivatized; every-thing from telecommunications to national airlines to steel mills was considered vital to national defense, regardless of the ram-

.YHѝNUH��ZHPK��¸>L�B[OL�Q\U[HD�KV�UV[�YL-THPU� PUKPќLYLU[� [V� [OVZL� YLZWVUZPISL� MVY�the regime’s problems.”67 Clearly, Martínez de Hoz’s job security was in question, es-WLJPHSS`� JVUZPKLYPUN� [OH[� .LULYHS� =PKLSH�was due to retire the following March, in 1981.68

The navy, the branch of military un-der whose supervision the infamous terror and torture of the “Dirty War” was planned and executed, emerged as Martínez de Hoz’s most fervent defender. On October 3, the junta announced that it had chosen .LULYHS�9VILY[V�=PVSH�[V�Z\JJLLK�=PKLSH��;OL� UH]`� ]V[LK� HNHPUZ[� =PVSH�� ^OPSL� [OL�army and the air force approved. As David Pion-Berlin states in the piece, “The Fall of Military Rule in Argentina: 1976-1983, “The vote suggested the degree to which the internal cleavage fell along economic lines: the navy had become the cham-pion of neoclassical economics and was clearly advocating the Martínez de Hoz position.”69� � =PVSH� JVUZ[P[\[LK� H� [OYLH[� [V�the neoliberal policies, as he believed that policy could not be made in a vacuum. He advocated governance in consultation

with important socio-economic sectors, including organized labor, which would up-set the established liberal economic strat-egy.70 In his inaugural address on March ��[O��=PVSH�PU[YVK\JLK�OPZ�WSHU�VM�¸UH[PVUHS�integration,” which involved the gradual normalization of intermediary organiza-tions, such as unions and political parties, restoring to them some of the rights sur-YLUKLYLK� PU� [OL�WHZ[�Ä]L�`LHYZ�71 Though

JUIS48


WHU[�PULѝJPLUJ`�HUK�JVZ[�HZZVJPH[LK�^P[O�them.72 Most obviously, military expendi-tures themselves were not reduced, but instead tremendously increased during the JV\YZL�VM�[OL�7YVJLZV�HZ�[OL�I\KNL[�KLÄ-cit ballooned.73 Without the privatization of publicly held industries and a reduction in [OL�I\KNL[�KLÄJP[��[OL�7YVJLZV»Z�ºULVSPILY-al’ policies were far from the small-govern-ment ideal envisioned by Milton Friedman and implemented by the Chicago Boys. Instead, the government prioritization of coercive capacity over neoliberal econom-ic structure supports the hypothesis that the regime’s economic policymaking was driven by a desire to stamp out Peronism, rather than a technocratic interest in neo-liberal philosophy.

Finally, even when postulating that the Proceso was drawn to neoliberal policies ILJH\ZL�VM�[OLPY�WV[LU[PHS�]HS\L�PU�ÄNO[PUN�Peronism, rather than their international HWWLHS�� [OL� PUÅ\LUJL�VM� [OL�*OPSLHU�JHZL�cannot be entirely disregarded. Undoubt-edly, the Chicago Boys’ famous neoliberal experiment loomed large as Martínez de Hoz and the rest of the Proceso crafted their economic policy. But characterizing [OL� PUÅ\LUJL� VM� [OL� º*OPSLHU� TPYHJSL»� HZ�proof that the neoliberal model promoted growth and made Argentina’s “liberal pro-gram seem eminently rational and objec-tively advisable”74 gravely misreads his-tory. The ‘Chilean Miracle’ did not begin in earnest until late 1977, when foreign M\UKZ�ILNHU�[V�ÅV^�PU[V�*OPSL�MYVT�V]LY-seas.75 In 1976, the country was still deep in recession following the Chicago Boys’

eralism under the two military regimes. In Chile, the Chicago Boys maintained strong links to the University of Chicago and Mil-ton Friedman, even bringing Friedman on a tour of Chile when lobbying the military junta on behalf of their ‘shock’ program in 1975. Academics and technocrats, the Chicago Boys had no previous political experience and were dedicated to the ide-als of neoliberal economics. Therefore, the Chilean case is well served by an analysis that contends that the neoliberal rise can be explained by international factors. The Argentinian case, however, is not. Mar-tínez de Hoz and the rest of the Proceso were engaged in an all-out war against the social, political, and economic forces of Peronism. Far from an academic, with a technocratic fascination with neoliberal-ism, Martínez de Hoz was a career politi-cian and representative of the landed elite who had been involved in the military’s an-[P�7LYVUPZ[�LќVY[Z�ZPUJL�[OL�JV\W�VM�� ;OL�=PKLSH�NV]LYUTLU[»Z�KL[LYTPUH[PVU�[V�completely eliminate Peronism manifested itself in brutal repressive tactics, merciless deprivation of social services, and a stra-tegic implementation of neoliberal policies that broke unions’ hold on industries. The regime’s unwillingness to compromise its coercive capacity, the navy’s embrace of Martínez de Hoz and neoliberalism, and =PVSH»Z� PUZPZ[LUJL� [OH[� ULVSPILYHS� WVSPJPLZ�and repressive tactics both be relaxed at the same time, indicates that the regime considered neoliberal economic policies another way to target the Peronist base. Therefore, it is most useful to analyze the

shock program. Unemployment stood at 28 percent, and soared to 80 percent in the shantytowns of Santiago, where it was commonplace to see young girls sell-ing themselves on street corners.76 Chile’s already tenuous social security service IYVRL�KV^U�� HSTVZ[� JVTWSL[LS �̀� HZ� ÄYTZ�going into bankruptcy defaulted on social security insurance payments and the gov-ernment refused to pay unemployment ILULÄ[Z�77 The minimum wage diminished and the real rate of interest skyrocketed to 178 percent annually, making it impos-ZPISL�MVY�ÄYTZ�[V�IVYYV^�[V�Z[H]L�Vќ�IHUR-ruptcy.78 Any policymaker from Argen-tina examining the possibility of neoliberal policies would not have found a healthy, thriving economy in Chile in 1976, as they might have in 1979. Instead, they would have found a society deep in recession, ^P[O� [OL�^VYZ[�Z\ќLYPUN� MLS[�I`� [OL�^VYR-ing class. Therefore, if the Chilean case did encourage the adoption of neoliberal-ism in Argentina in 1976, it was due to the devastation it wrought upon the working class, not any type of policy success.

VIIIn summary, the surface similarities

between Pinochet’s Chile and the Argen-tinian Proceso encourage “wave” theorists like Sheahan, Schamis, Remmer, and 6»+VUULSS� [V� ZL[� HZPKL� JV\U[Y`�ZWLJPÄJ�analysis in favor of examining the coor-dinated rise of neoliberalism across the Southern Cone in the 1970s. However, an internationally focused framework ob-ZJ\YLZ�[OL�KPќLYLUJLZ�PU�[OL�YPZL�VM�ULVSPI-

492014Spring


rise of neoliberalism under the Proceso in the context of the historical antagonism between the military and Peronism in Ar-gentina.

Endnotes1. Hector E. Schamis “Reconceptualizing Latin

American Authoritarianism in the 1970s: From Bureaucratic-Authoritarianism to Neo-conservatism.” Comparative Politics 23, no. 2 (1991): 201-220. 203.

2. Schamis, “Reconceptualizing Latin American Authoritarianism,” 205.


4. John Sheahan. “Market-Oriented Economic Policies and Political Repression in Latin America.” Economic Development and Cultural Change 28, no. 2 (1980): 267-291. 267

5. Sheahan, “Market-Oriented Economic Policies,” 273.

6. Paul G. Buchanan. “The Varied Faces of Domination: State Terror, Economic Policy, and Social Rupture during the Argentine” Proceso,” 1976-81.” American Journal of Political Science (1987): 336-382. 358.

7. Joseph Collins. Chile’s Free Market Miracle: A Second Look. (Monroe, Oregon: Subterra-nean Company, 1995), 38.


9. Sebastian Edwards. “Stabilization with liberaliza-tion: An evaluation of ten years of Chile’s experiment with free-market policies, 1973-1983.” Economic Development and Cultural Change (1985): 223-254. 225.

10. Edwards, “Reconceptualizing Latin American Authoritarianism,” 225.

11. Edwards, “Reconceptualizing Latin American Authoritarianism,” 226..


34. Buchanan, “The Varied Faces of Domination,” 353.

35. Munck 1984, p. 298, cited in Buchanan, “The Varied Faces of Domination,” 353.


37. Daniel James. Resistance and integration: Peronism and the Argentine working class, 1946-1976. Vol. 64. Cambridge University Press, 1993. 1.38. James, Resistance and Integration, 25.39. James, Resistance and Integration, 54.

40. James, Resistance and Integration, 25.



43. Guillermo O’Donnell. “‘An Impossible Game’: Party Competition in Argentina, 1955-1966.” Modernization and Bureaucratic-Authoritar-ianism: Studies in South American Politics, Berkeley (1973): 166-200.


45. William C. Smith. Authoritarianism and the Crisis of the Argentine Political Economy. Stanford University Press, 1991. 224.

46. Smith, Authoritarianism and the Crisis, 224.

47. Clarin, 1 April 1977, cited in Buchanan, “The Varied Faces of Domination,” 339.



50. Davide G. Erro. Resolving the Argentine Para-dox: Politics and Development, 1966-1992. Lynne Rienner, 1993. 121.

51. Nunca Mas: The Report of the Argentine National Commission on the Disappeared. (New York: Farrar Straus & Giroux, 1986).


53. Buchanan, “The Varied Faces of Domination,”



15. Guillermo A. Calvo. “Fractured Liberalism: Argentina Under Martinez de Hoz.”Economic Development and Cultural Change 34, no. 3(1986): 511-33.511.

16. David Pion-Berlin. “The Fall of Military Rule in Argentina: 1976-1983.” Journal of Inter-(TLYPJHU�:[\KPLZ�HUK�>VYSK�(ќHPYZ (1985): 55-76. 58.

17. Pion-Berlin, “The Fall of Military Rule,” 58.



20. Philip J. O’Brien and Jacqueline Rod-dick. Chile, The Pinochet Decade: The Rise and Fall of the Chicago Boys. Latin America Bureau, 1983. 38.

21. O’Brien and Roddick, Chile, The Pinochet Decade,38.

22. Collins, Chile’s Free Market Miracle, 24.












JUIS50


Authoritarianism: Studies in South American Politics, Berkeley (1973): 166-200.

Pion-Berlin, David. “The Fall of Military Rule in Argentina: 1976-1983.” Journal of Inter- (TLYPJHU�:[\KPLZ�HUK�>VYSK�(ќHPYZ (1985): 55-76.

Schamis, Hector E. “Reconceptualizing Latin American Authoritarianism in the 1970s: From Bureaucratic-Authoritarianism to Neo-conservatism.” Comparative Politics 23, no. 2 (1991): 201-220.

Sheahan, John. “Market-Oriented Economic Policies and Political Repression in Latin America.” Economic Development and Cultural Change 28, no. 2 (1980): 267-291.

Smith, William C. Authoritarianism and the Crisis of the Argentine Political Economy. Stanford University Press, 1991.


76. O’Brien and Roddick, Chile, The Pinochet Decade, 63.

77. O’Brien and Roddick, Chile, The Pinochet Decade, 63.

78. O’Brien and Roddick, Chile, The Pinochet

Decade, 63.

BibliographyBuchanan, Paul G. “The Varied Faces of Domina-

tion: State Terror, Economic Policy, and So-cial Rupture during the Argentine Proceso,” 1976-81.” American Journal of Political Science (1987): 336-382.

Calvo, Guillermo A. “Fractured Liberalism: Argen-tina Under Martinez de Hoz.”Economic Development and Cultural Change 34, no. 3 (1986): 511-33

Collins, Joseph. Chile’s Free Market Miracle: A Second Look. (Monroe, Oregon: Subterra-nean Company, 1995), 38.

Edwards, Sebastian. “Stabilization with liberaliza-tion: An evaluation of ten years of Chile’s experiment with free-market policies, 1973-1983.” Economic Development and Cultural Change (1985): 223-254.

Erro, Davide G. Resolving the Argentine Paradox: Politics and Development, 1966-1992. Lynne Rienner, 1993.

James, Daniel. Resistance and integration: Peronism and the Argentine working class, 1946-1976. Vol. 64. Cambridge University Press, 1993.

Nunca Mas: The Report of the Argentine National Commission on the Disappeared. (New York: Farrar Straus & Giroux, 1986).

O’Brien, Philip J. and Jacqueline Roddick. Chile, The Pinochet Decade: The Rise and Fall of the Chicago Boys. Latin America Bureau, 1983.

O’Donnell, Guillermo. “‘An Impossible Game’: Party Competition in Argentina, 1955- 1966.” Modernization and Bureaucratic-

371.














67. El Economista, 1980:1, cited in Pion-Berlin, “The Fall of Military Rule,” 60.





72. Erro, Resolving the Argentine Paradox, 102.

73. Erro, Resolving the Argentine Paradox, 102.

74. Buchanan, “The Varied Faces of Domination,” 358..

512014Spring

OPZ� ZWYPUN�� [OL�.LULYHS�6ѝJL�VM� [OL�*OPULZL�*VTT\UPZ[�7HY[`� JPYJ\SH[LK�H�IYPLM�TLTV�^HYUPUN�against “seven perils” to the strength of Party rule. Document 9, distributed to all local and regional **7�VѝJPHSZ��JHSSLK� MVY� YLUL^LK�JH\[PVU�HNHPUZ[� ¸PUÄS[YH[PVU¹�VM� MVYLPNU� PKLVSVN �̀� PUZ[P[\[PVUZ��HUK�individuals who threaten the political power of the CCP. In the eight months since, the CCP has

increased repression of human rights activists, foreign and domestic media outlets, and dissident academics, suggesting that, far from being mere rhetoric, Document 9 describes the phenomena the CCP sincerely understands as most threatening to its staying power.

Many of these ‘perils’ are no surprise. The list of perceived threats to China’s political stability includes constitutional democracy, universal values, civil society, ‘neoliberalism,’ freedom of the press, denying the historical contributions of the CCP, and condemning the market-oriented reforms of the past three decades. Yet one recent trend which commentators in western press consistently identify, as a major source of political instability did not make the list: economic inequality.

The standard case for the threat economic inequality poses to CCP political rule was summarized in a September 2013 piece in the Financial Times, alarmingly titled ‘How long can the Communist Party survive in China?’; “Modernisation theory holds that authoritarian systems tend to democratise as incomes rise, that the

creation of a large middle class hastens the process and that economic slowdown following a long period of rapid growth makes that transition more likely. Serious and worsening inequality coupled with high levels of corruption can add to the impetus for change.” This article is merely one of many similarly themed pieces in the academic and popular press, which VќLYZ� [OL� Z[HUKHYK�TVKLYUPaH[PVU� [OLVY`�account, that changing class dynamics and/or wealth inequality will threaten China’s political stability.

These claims rarely seek to explain why the CCP does not also see economic inequality as a threat—and more importantly why most Chinese citizens do not either. How can we explain this disconnect between so many esteemed commentators’ anticipation that income

inequality will undermine Chinese social stability, and CCP leaders’ apparent belief that it will not?

0U�7HY[�0��[OPZ�WHWLY�^PSS�IYPLÅ`�Z\Y]L`�economic inequality in contemporary China. In Part II, it will argue that, across socioeconomic and geographic divides, contemporary Chinese citizens acknowledge economic inequality as an acceptable consequence of the vast market reform project of the past three decades, thus associating wealth inequality with the CCP’s greatest success, not its TVZ[�ZPNUPÄJHU[�^LHRULZZ��(M[LY�HUHS`aPUN�[OLZL�[YLUKZ��[OPZ�WHWLY�̂ PSS�IYPLÅ`�JVUZPKLY�in Part III how such attitudes to inequality are in fact not greatly dissimilar from attitudes toward economic inequality in both contemporary American politics, and Anglo-American political philosophy. In

Why Inequality Doesn't Threaten the CCP:

by Sam Sussman

Sam Sussman. Sam Sussman is a 2013 graduate of Swarthmore College, with Highest Honors PU�7VSP[PJHS�:JPLUJL�HUK�,UNSPZO�3P[LYH[\YL��/L�OHZ�JVTTLU[LK�VU�PU[LYUH[PVUHS�HќHPYZ�PU�[OL�;\M[Z�1V\YUHS�VM�0U[LYUH[PVUHS�(ќHPYZ��;OL�+PWSVTH[��(ZPHU�;PTLZ��0U[LYUH[PVUHS�7VSPJ`�+PNLZ[��,�0U[LYUH[PVUHS9LSH[PVUZ�com, and the Oxford Left Review. In the fall of 2014, he will begin an M.Phil in International Relations at the University of Oxford.

A Rawlsian Take on Chinese Inequality

T

JUIS52

conclusion, it will suggest that economic inequality is far from the political issue around which Chinese citizens are likely to engage in political organization, and that, consequentially, the CCP is right not to bother listing it as one of the “seven perils,” along with more serious threats such as freedom of the press, civil society, and universal values.

I. Economic Inequality in Contemporary China

China’s reform era economic miracle needs no introduction. Policies such as decol lect iv izat ion of agriculture, privatization of state-owned enterprises, mass employment restructuring, foreign investment-friendly development zones and state assistance to export sectors have catalyzed GDP growth between 8 and 14 percent every year since 1991. Today, China’s GDP is the world’s second largest. However, as Deng Xiaoping foreshadowed by observing, “Some people must get YPJO� ÄYZ[�¹� LJVUVTPJ� YLMVYT� OHZ� ILLU�accompanied by a dramatic rise of economic inequality. Between 1988 and �� *OPUH»Z� .PUP� JVLѝJPLU[� NYL^� MYVT�39.5 to 46.8, moving China from near the global median to the 25th percentile in terms of economic inequality.1 This may

in fact be understating the case, because [OVZL�ÄN\YLZ�YLS`�VU�KH[H�Z\WWSPLK�I`�[OL�CCP. Independent analysis published by a joint Chinese-American research team JVUJS\KLZ� [OH[�*OPUH»Z�.PUP� JVLѝJPLU[� PZ�61, which would place China behind only South Africa as the world’s most unequal society.

These inequalities are especially apparent across geographic and gender lines. The geographical divide can be attributed both to higher levels of investment in urban centers throughout the reform period, and to state initiated

market distortions that privilege urban populations. Zhao Renwai and Ding Sai in Inequality and Public Policy in China documented how when widespread urban OVTL�V^ULYZOPW�^HZ� ÄYZ[� WVW\SHYPaLK� PU�the 1990s, the CCP created a range of Z[H[L� PUJLU[P]LZ� [OH[� HY[PÄJPHSS`� PUJYLHZLK�the value of urban real estate by as much as eightfold. 2 This tremendously lucrative YLU[�ZLLRPUN� ILULÄ[LK� [OL� ZTHSS� U\TILY�VM�JHWP[HS�Å\ZO�\YIHUP[LZ�HISL�[V� PU]LZ[� PU�

China’s housing boom.Rather than making land acquisition

LHZ`� HUK�WYVÄ[HISL�� HZ� PU� \YIHU�JLU[LYZ��state policy worked to keep land ownership minimal in rural China. Decades HM[LY� KLJVSSLJ[P]PaH[PVU�� P[� YLTHPUZ� KPѝJ\S[�to purchase land even in rural China, largely because state policy designates O\NL� [YHJ[Z�VM� Y\YHS� SHUK�Vќ� SPTP[Z�K\L� [V�its value for public development projects.3 Because property is the most valuable asset of Chinese citizens, as it is of citizens in the industrialized west, these disparate trends between urban and rural

China contributed to tremendous economic inequality across geographic lines.

The investment bubble in higher education has also exacerbated urban-rural economic inequality. Between 1997 and 2006, the number of Chinese

students enrolled at universities increased from two million to seven million. As Shujie Yao, Bin Wu and Fang Su argue in “The Impact of Higher Education Expansion on Social Justice in China: A Spatial and Inter-Temporal Analysis,” this trend has WYLKVTPUH[LS`� ILULÄ[LK� \YIHU� MHTPSPLZ�HISL� [V� HќVYK� [\P[PVU�� :PUJL� [\P[PVU� MLLZ�were reinstituted in place of public funding in the late 1990s, low-income populations, such as those concentrated in rural areas,

Why Inequality Doesn't Threaten the CCP: A Rawlsian Take on Chinese Inequality / Sam Sussman

"Because property is the most valuable asset of *OPULZL�JP[PaLUZ��HZ�P[�PZ�VM�JP[PaLUZ�PU�[OL�PUK\Z[YPHSPaLK�^LZ[��[OLZL�KPZWHYH[L�[YLUKZ�IL[^LLU�\YIHU�HUK�Y\YHS�China contributed to tremendous economic inequality

across geographic lines."

532014Spring

Z[Y\NNSLK� [V� HќVYK� [OL� JVZ[� VM� OPNOLY�education. Rural Chinese who do make it to university are less likely to study in prestigious institutions, a fact which has further exacerbated the role of the higher education bubble in driving economic inequality.4 Minxin Pei in the journal article “Is CCP Rule Fragile or Resilient?” argues that students who are not able to attend top-tier universities, and who are thus less likely to achieve either gainful employment or CCP membership, “are bound to be frustrated politically and socially,” such that, “the prospect that this group will form an antiregime force has become ever more likely.”5 Pei’s conclusions concerning [OL�OPNOLY�LK\JH[PVU�I\IISL�Ä[�̂ LSS�PU[V�OPZ�prediction that economic modernization and attendant inequality will ultimately drive the CCP from power.

In addition to the property and higher education bubble, two state policies importantly reinforce economic wealth inequality. Health care spending is disproportionately directed toward \YIHU� WVW\SH[PVUZ�� ^OV� [`WPJHSS`� ILULÄ[�from both greater quantity and quality of medical care than is available in rural China.6 Second, China’s pension system often rewards urban workers with comfortable retirements on state or private ZLJ[VY�WLUZPVUZ�[OH[�HYL�ZPTWS`�UV[�VќLYLK�in rural China.7

In an open economy, migration would balance these geographical inequities, as rural workers moved to cities, urban workers would lose bargaining power, and rural workers would gain it. A modicum of

equilibrium would be approached vis-à-vis urban and rural labor’s respective ability to bargain with private employers for better OLHS[O��LK\JH[PVU�HUK�YL[PYLTLU[�ILULÄ[Z��and with the state for more equitable public policies. Yet rural to urban migration is strictly regulated by the hukou permit system, which ties access to employment VWWVY[\UP[PLZ� HUK� ZVJPHS� ILULÄ[Z� [V�residential permits. This locks rural migrants out of the market and the public service infrastructure of urban China. In its rigid enforcement of the hukou system, [OL� **7� OHZ� L]LU� KLTVSPZOLK� \UVѝJPHS�urban schools for the children of illegal rural migrants.

II. Accepting Inequality?*SLHYS �̀�[OLZL�PULX\HSP[PLZ�VќLUK�IV[O�

western conceptions of distributional justice and the historical tradition of the Chinese Communist Party. Unsurprisingly, China’s vast inequality has led to consistent speculation in the western academic and popular press that economic inequality poses a severe threat to the staying power of the CCP. In a standard example, a paper for the Council on Foreign Relations argued that, “Perhaps most pressing is the CCP’s treatment of the massive income disparity that China’s economic boom created.”8 Early this year, Minxin Pei, who has long argued that CCP economic governance is unsustainable, argued in the popular press that “What should make the members of the ruling Chinese Communist Party stay awake at night is the combination of the high level

of inequality, the rate of its increase, and OV^� [OLZL� [YLUKZ� Å`� PU� [OL� MHJL� VM� [OL�party’s nominally egalitarian ideology.” Pei argues: “Societies with huge income and wealth disparities display more symptoms of social distress and political instability. But societies in which such disparities have risen rapidly in a short period of time fare even worse. For a country ruled by a party that pays lip service to communist egalitarianism, rising income inequality poses an existential political threat.”

The month before, in January 2012, Pei published a similarly themed article in the leading academic journal of modernization theory, Larry Diamond’s Journal of Democracy. In “Is CCP Rule Fragile or Resilient?” Pei argued, “Corruption also contributes to rising PULX\HSP[`� I`� ILULÄ[PUN� H� ZTHSS� U\TILY�of well-connected elites at the expense of public welfare, thus further fueling anti-regime sentiments and social tensions.”9

In an accompanying article in the same journal, Francis Fukayama argued that China’s rapidly changing demographics will soon force the CCP to exacerbate economic inequality trends by slashing public services and raising taxes, decisions which, because they will be imposed by an authoritarian government, “risk generating a social explosion” of political resistance.10

Given these expert accounts, how can we explain the fact that the CCP does not consider economic inequality to be one of the seven major threats to its rule? The answer lies in the miscalculation by modernization theorists of popular


JUIS54

attitudes toward inequality within rural China. Much anticipation of supposedly budding political instability focuses on the countryside, and the ostensibly economically and politically discontent rural Chinese, a very convenient subject for the modernization theorist. It is on the sword of this imputed discontent that the Chinese Community Party is expected to fall. Yet this assumption about the attitudes of rural Chinese does not adhere with research about their attitudes towards economic inequality.

Recent research by Martin King Whyte VќLYZ� H� JVTWLSSPUN� JV\U[LY�UHYYH[P]L� VM�rural Chinese political attitudes. Based on interviews with 3,267 citizens across rural China, Whyte argues in Myth of the Social Volcano: Perceptions of Inequality and Distributive Injustice in Contemporary China that “farmers stand out as a group least likely to express critical and fatalistic views” of the Chinese economic system.11 ;OL�KPќLYLUJL�SPLZ�PU�[OL�JVTWHYPZVU�WVPU[�assumed by modernization theorists, who often reason that low-income Chinese compare their well-being to their TVZ[� ^LSS�Vќ� WLLYZ�� /V^L]LY�� >O`[L»Z�research shows that when the poorest Chinese consider their living standards, their comparison is not to the wealth accumulated by the biggest winners of the reform period, but, rather, to their own living standards prior to the reform period. After the specter of Mao, economic inequality strikes even rural poor Chinese, as less than the existential crisis that the commentators above identify it as. Whyte

ÄUKZ�̧ UV�L]PKLU[�UVZ[HSNPH�MVY�4HVPZT��UVY�any real evidence of anger at the emerging capitalist system.”

4VYL� [OHU� [OPZ�� >O`[L� ÄUKZ� [OH[��like most Americans, Chinese citizens attribute economic inequality to merit and hard work, not luck. Chinese citizens believe that the economic system under ^OPJO�[OL`�SP]L�PZ�MHPY¶¶�TVYL�ZV�[OHU�[OLPY�counterparts in Japan, and in Western and Eastern Europe.12 Remarkably, only 28 percent of Chinese think values of socialism are violated by the inequalities of the reform period.13 More Chinese than UV[� ILSPL]L� [OLYL� PZ� UV� VY� SP[[SL� JVUÅPJ[�between rich and poor, employers and employees, or urban and rural residents.14 The vision of Hu Jintao and Wen Jiabao of a “harmonious society” has been more successful than those whose views are PUMVYTLK�ZVSLS`�I`�*OPUH»Z�.PUP�JVLѝJPLU[�believe.

Teresa Wright reinforces this UHYYH[P]L� PU� OLY� V^U� ÄUKPUNZ� VU� WVSP[PJHS�H[[P[\KLZ� HTVUNZ[� SLZZ� Hў\LU[� *OPULZL�in Accepting Authoritarianism: State-Society Relations in China’s Reform Era.15 Pointing out that between 1989 and 2005, the yearly real per capita income of rural farmers increased by 300 percent, Wright highlights the importance of rural Chinese experiences with past forced collectivization in mitigating expected outrage against contemporary inequalities. Many contemporary rural Chinese accept economic inequality precisely because “most farmers were highly critical of the forced egalitarianism

of the Mao era,” and perceived “their ability to rise economically as limited by socialist legacies and state controls.”16 Evaluating political attitudes of other low-income constituencies who might be expected to engage in anti-systemic political resistance, Wright shows that the economic success of the reform period OHZ� LќLJ[P]LS`� ZLJ\YLK� WVSP[PJHS� SV`HS[`�from every socioeconomic constituency of contemporary Chinese society. It is not news that modernization has secured the loyalty of private entrepreneurs and professionals, nor that, because they believe that political liberalization and/or democratization would catalyze economic YLKPZ[YPI\[PVU�� [OLZL� ^LSS�Vќ� *OPULZL� HYL�content accepting minimal political rights in exchange for economic privilege. (In many cases, of course, there is no trade-Vќ�� 17

Wright’s most important contributions are in her analysis of attitudes amongst low-income urban state sector and private workers, as well as her reinforcement of Whyte’s research concerning low-income rural framers. Wright demonstrations that, far from being concerned with the shortcomings of the reform period, these constituencies both credit the CCP for the accomplishments of the reform period, HUK� HU[PJPWH[L� [OH[� Z[H[L� WVSPJ`� ^PSS� VќLY�M\[\YL� ILULÄ[Z�� -VY� \YIHU� Z[H[L� ZLJ[VY�workers, the generous social welfare ILULÄ[Z� [OH[� JVU[YPI\[L� [V� [OL� \YIHU�rural economic disparities discussed in 7HY[� 0� OH]L� Z\ѝJPLU[S`� Z\Z[HPULK� SV`HS[`�[V� [OL�**7�� 9HUR� HUK� ÄSL� WYP]H[L� ZLJ[VY�


552014Spring

workers are slightly less privileged, but apparently equally content, in large part because the hukou system of migration institutionalizes the importance of these workers in urban labor markets, ensuring short supplies of urban labor and low unemployment rates. In short, while China may appear a highly unequal society from the outside, the broad-based gains of the past three decades have inculcated a sense of optimism in Chinese of all class backgrounds.

III. Peculiar AttitudesIn his seminal work on distributive

justice, A Theory of Justice, John Rawls argued that behind a veil of ignorance, which obscured ethnicity, class, race, gender, intelligence, ability and any other social characteristics, a deliberative, representative population would conclude justice required the distribution of social product, such that inequalities could VUS`� IL� Q\Z[PÄLK� PM� [OL`� ILULÄ[LK� [OL�SLHZ[�^LSS�Vќ��>OPSL�OL�YLQLJ[LK�[YHKP[PVUHS�liberal understandings of moral desert, Rawls assumed that production and consumption dynamics require that the principle of fair equality of opportunity can best be approximated by what he termed º[OL�KPќLYLUJL�WYPUJPWSL�»� ;OL�WYPUJPWSL� PZ�formulated such that economic inequality JHU�VUS`�IL� Q\Z[PÄLK� PM� P[�ILULÄ[Z� [OL� SLZZ�fortunate. For Rawls, distributional justice WLYTP[Z¶TPNO[�L]LU�YLX\PYL¶�H�WYVK\J[PVU�model in which capital is concentrated, but which ultimately permits higher standards VM�SP]PUN�MVY�[OL�SLHZ[�^LSS�Vќ��0U�P[Z�ZPTWSLZ[�

[LYTZ��ZVTL�WLVWSL�NL[�YPJO�ÄYZ[��Without delving into the value of

political philosophy for concrete problems of political economy, the validity of JVU[YHJ[HYPHU�Q\Z[PÄJH[PVUZ�VM�KPZ[YPI\[PVUHS�justice, the equality-of-what debate, or the other vastly fascinating questions of moral and political philosophy at stake in Rawls’ account, this paper will suggest that Rawls’ social psychology may be useful in understanding China’s high tolerance for economic inequality. As well as illustrating how attitudes toward inequality in China KV�UV[�KPќLY�PTTLUZLS`�MYVT�[OVZL�PU�[OL�American political tradition, both popular and academic.

China is a vastly unequal society, but [OL�NLULZPZ�VM� [OH[� PULX\HSP[`�¶[OL�YLMVYT�WLYPVK¶HSZV� WHYLU[LK� [OL� TVZ[� YHWPK�

economic expansion in world history. >OPSL�Y\YHS�WLHZHU[Z�TPNO[�OH]L�ILULÄ[LK�TVYL� MYVT� H� KPќLYLU[S`� JVUJLP]LK�HWWYVHJO� [V� YLMVYT�� [OL`� ILULÄ[LK�immensely nonetheless. No other social constituency is as invested in the current

economic regime, because no other social constituency has had as horrid an alternative with which to compare it. If Rawls is right, that a deliberative representative population would choose a distribution of wealth in which there is greater economic inequality, but in which [OL�SLHZ[�^LSS�Vќ�MHPY�IL[[LY��HZ�VWWVZLK�[V�an alternative distribution in which there is SLZZ�PULX\HSP[ �̀�I\[�PU�^OPJO�[OL�SLZZ�Vќ�HYL�^VYZL� Vќ�� [OLU� Y\YHS� *OPULZL� WYLMLYLUJL�for the highly inegalitarian current regime is understandable, to the extent to which low-income farmers fair better, than in the rigidity of the collectivization period.

As opposed to the alarmism that results from considering China’s wealth gaps through the lens of modernization theory, framing popular Chinese

acceptance of economic inequality in the terms of the leading Anglo-American political philosopher of distributional justice forces important reconsiderations. For not merely attitudes, but also concrete YLHSP[PLZ��HYL�UV[�HZ�KPќLYLU[�HZ�^L�TPNO[�


"*OPUH�PZ�H�]HZ[S`�\ULX\HS�ZVJPL[ �̀�I\[�[OL�NLULZPZ�of that inequality –the reform period–also parented the

most rapid economic expansion in world history."

JUIS56

imagine between China and the United :[H[LZ��(M[LY�HSS��^P[O�H�.PUP�JVLѝJPLU[�VM�45, the United States’ economy is not ZPNUPÄJHU[S`�TVYL�LNHSP[HYPHU� [OHU�*OPUH»Z��PM� ^L� ILSPL]L� VѝJPHS� *OPULZL� KH[H��Yet despite having the second lowest intergenerational social mobility rate in the PUK\Z[YPHSPaLK�^VYSK��[OL�<�:��YHURZ�ÄYZ[�PU�the percentage of its citizens who believe that hard work is rewarded.

Commentators who wonder why low-income Chinese do not endeavor to resist economic inequality by means of political organization might well ask why such agitation is not more prevalent in the United States, where it faces fewer legal barriers. In each country, the general public strongly believes that the economic system is fundamentally fair. Those who doubt this comparison might reconsider the evidence cited above that more Chinese citizens believe that they live in a fair economic system than do citizens of Japan, and both western and eastern Europe.

IV. ConclusionThat many low-income Chinese

accept severe wealth gaps does not mean that Chinese policy makers must choose between the false dichotomy of past, PULѝJPLU[� TVKLSZ� VM� W\ISPJ� V^ULYZOPW�or its current inegalitarian economy. Renwai and Sai, as well as Yao, Wu, Su and Wang, are right to suggest that *OPULZL�Z[H[L�WVSPJ`�JHU�TVYL�LќLJ[P]LS`�levy progressive taxation and improve health, education and pension policies to reduce economic inequalities that are Z`Z[LTH[PJHSS`� PULѝJPLU[�� :PTPSHYS �̀� [OL�

VѝJPHS� PULX\HSP[`� YLK\J[PVU� WSHU� [OH[� [OL�**7� YLSLHZLK� PU� -LIY\HY`� ¶^OPJO� HPTZ�to cut the number of people in poverty by ��4�� VY� �� WLYJLU[¶� ZOV\SK� IL� SH\KLK��Yet these reforms are slight alterations to an overall well-conceived and executed model of state-led development in the reform period. They are not a radical departure from present policy, imperative to avert social unrest.

In this light, it is understandable why Document 9 includes constitutional democracy, universal values, civil society and a free press as fundamental threats to CCP power, but not economic inequality. It is also why Document 9 is so sensitive to denials of the historical contributions of the CCP, and to critiques of the reform period. As argued above, it is precisely these beliefs which facilitate popular acceptance of economic inequality. But from that inequality itself, the Party has little to fear. Even if economic growth slows from past record rates, low-income earners will continue to favor the current inegalitarian regime to the shared impoverishment of rural Chinese in Maoist generations past.

Endnotes 1. Chen J, Dai D, Pu M, Hou W and Feng Q

��;OL�;YLUK�VM�[OL�.PUP�JVLѝJPLU[�VM�China. Working Paper 109, Brooks World Poverty Institute, University of Manchester, Manchester.

2. Renwai, Zhao & Sai, Deng, “The Distribution of Wealth in China,” Inequality and Public Policy PU�*OPUH��LKZ��)QVYU�.\Z[HќZVU��3P�Shi and Terry Sicular, p. 138

3. Renwai, et. al (2008)

4. Shujie Yao, Bin Wu, Fang Su, and Jianling Wang, “The Impact of Higher Education

Expansion on Social Justice in China: A Spatial and Inter-Temporal Analysis,” Journal of Contemporary China (Oct 2010)

5. Minxin Pei, “Is CCP Rule Fragile or Resilient?” Journal of Democracy, Vol. 23, Num. 1 (2012)

6. Sagil, Gry. “Poverty and disabled households in the People’s Republic of China: experiences with a new rural health insurance scheme,” Disability and Society, Vol 28, Issue 2, (2012)

7. Avraham Ebenstein and Steven Leung, “Son Preference and Access to Social Insurance: Evidence from China's Rural Pension Program,” Population and Development Review, Vol. 36, No. 1 (2010)

8. Yao, Wu, Su, et. al (2010)

9. Pei (2012)

10. Francis Fukayama, “China and East Asian Democracy: The Patterns of History,” Journal of Democracy, Vol. 23, Num. 1 (2012)

11. Whyte, Martin King, ed., Myth of the Social Volcano: Perceptions of Inequality and Distributive Injustice in Contemporary China (Stanford University Press: 2010), p. 179

12. Whyte, p. 74

13. Wright, p. 46

14. Wright, Teresa, Accepting Authoritarianism: State-Society Relations in China’s Reform Era. Stanford University Press: 2010.

15. Wright, p. 146

16. Wright, p. 55

17.Wright, p. 133

Bibliography“Beijing’s Assault on Academic Freedom,” the New

York Times, October 21, 2013, http://www.nytimes.com/2013/10/22/opinion/beijings-assault-on-academic freedom.html?_r=0

Chen J, Dai D, Pu M, Hou W and Feng Q, ¸;OL�;YLUK�VM�[OL�.PUP�JVLѝJPLU[�VM�China.” Working Paper 109, Brooks World Poverty Institute, University of Manchester, Manchester (2010).


572014Spring

“China: Nationwide Arrests of Activists, Critics Multiply,” Human Rights Watch, August 30, 2013, http://www.hrw.org/news/2013/08/30/china-nationwide-arrestsactivistscriticsmultiply

“Document 9: A ChinaFile Translation,” August 8, ��O[[W!��^^ �̂JOPUHÄSL�JVT�KVJ\TLU[� �JOPUHÄSL�[YHUZSH[PVU

Ebenstein, Avraham and Steven Leung, “Son Preference and Access to Social Insurance: Evidence from China's Rural Pension Program,” Population and Development Review, Vol. 36, No. 1 (2010)

Fukayama, Francis, “China and East Asian Democracy: The Patterns of History,” Journal of Democracy, Vol. 23, Num. 1 (2012)

Jacobs, Andrew. “Reporter for Reuters Won’t Receive China Visa,” the New York Times, November 9, 2013, http://www.nytimes.com/2013/11/10/world/asia/reporter-for reuters-wont-receive-china-visa.html?_r=1&

“Migrants School Demolished, Parents Furious,” China Digital Times, August 17, 2011, http://chinadigitaltimes.net/2011/08/migrant-school-demolished-parents-furious/

Pei, Minxin, “China's income gap solution: Too little, too late?,” CNN Money, February 15, 2013, http://management.fortune.cnn.com/2013/02/15/chinas-income-gap-solution-too little-too-late/

Pei, Minxin, “Is CCP Rule Fragile or Resilient?” Journal of Democracy, Vol. 23, Num. 1 (2012)

Rawls, John. A Theory of Justice. Cambridge: Harvard University Press (1971).

Renwai, Zhao & Sai, Deng, “The Distribution of Wealth in China,” in Inequality and Public Policy in China (2008), eds. Bjorn .\Z[HќZVU��3P�:OP�HUK�;LYY`�:PJ\SHY�

Sagil, Gry. “Poverty and disabled households in the People’s Republic of China: experiences with a new rural health insurance scheme,” Disability and Society, Vol 28, Issue 2, (2012)

Shujie Yao, Bin Wu, Fang Su, and Jianling Wang, “The Impact of Higher Education Expansion on Social Justice in China: A Spatial and Inter-Temporal Analysis,” Journal of Contemporary China (Oct 2010)

“To Each, Not According to His Needs,” The Economist, December 15, 2012, O[[W!��^^ �̂LJVUVTPZ[�JVT�UL^Z�ÄUHUJL�and-economics/21568423-new-survey illuminates-extent-chinese-income-inequality-each-not

“Understanding Mobility in America,” Center for American Progress, April 26, 2006

Whyte, Martin King, ed., Myth of the Social Volcano: Perceptions of Inequality and Distributive Injustice in Contemporary China (Stanford University Press: 2010)

Wright, Teresa, Accepting Authoritarianism: State-Society Relations in China’s Reform Era Stanford University Press: 2010.


JUIS58

inety percent of the world’s goods are transported by sea1 and twenty percent of the global trade is delivered through the Gulf of Aden.2 Somalia is situated in the Horn of Africa, in one of the world’s most geographically strategic locations, stretching along the Gulf of Aden. This, however, is problem-atic, because Somalia has been a fractured region since the colonial era, the instability of which led

to the escalation of piracy and transformation of a geographically strategic sea route into a High Risk Area (HRA)3. Pi-racy has evolved since the 1990s, and despite the fact that many counter-piracy measures have been implemented to this day Somali piracy is a threat to the global economy and the international maritime security of seafarers. The issue is immensely complex, but can be primarily broken down into three root causes: state failure, the rise of militant 0ZSHTPJ�NYV\WZ��HUK�L_[YLTL�WV]LY[ �̀�,ќVY[Z�[V�LYHKPJH[L�WPYHJ`�]HY`�PU�LќLJ[P]LULZZ�HUK�PUJS\KL�TPSP[HY`�HUK�UH]HS�

deployment, Best Management Practices, large-scale information sharing, regional and international diplomacy, judicial tri-I\UHSZ�� HUK� Z[H[L� I\PSKPUN� LќVY[Z�� HSVUN�with humanitarian aid. With this in mind, the paper will argue for strengthened se-curity on board ships passing through the region, enhanced capacity of Somalia and other regional states like Kenya to imple-ment Somali pirate sentencing, in addition to stressing the importance of prosecution in Somalia, and the emphasized establish-ment of a more comprehensive economic development agenda from the World Bank towards prioritizing, funding, and aiding the mining sector of Somalia.

The Nature of the Problem

The 1982 United Nations Conven-tion on the Law of the Sea (UNCLOS) un-KLY� (Y[PJSL� �� VM� 7HY[� ?=0� KLJSHYLZ� [OH[�“States Parties shall refrain from any threat or use of force against the territorial integ-rity or political independence of any State, or in any other manner inconsistent with the principles of international law embod-ied in the Charter of the United Nations.”4 Piracy5, a domestic problem with large-scale international repercussions, is one of the greatest violations to this international law. The magnitude of the threat posed by Somali piracy cannot be underestimated, because the world greatly relies on the transit through the Suez Canal and the Gulf of Aden, and the threat of seafarers being hijacked is immense. The crew’s

security largely depends on whether they have taken the necessary precautions to prevent a pirate attack on their vessel. However, with current international legal limitations, not much can be done against fully armed, risk-assertive criminals that will stop at nothing to acquire wealth. Peaceful navigation is unrealistic as pirate attacks often lead to crew captivity under poor conditions, or even the death of a crewmember.

;OL� LќLJ[� WPYHJ`� OHZ� VU� [OL� NSVIHS�economy is a growing concern, forcing the international community to revisit its coun-ter-piracy measures. Not only do pirates demand unreasonably large ransoms (with the record ransom being $9.5 million paid by a Greek supertanker)6, but due to the

N

Global Shipping and the War on Somali Piracy

by Elizaveta Klimenko

Elizaveta Klimenko. Elizaveta Klimenko is an undergraduate student at the University of Toronto, entering her third year of studies. She is currently double majoring in International Relations and Political Science, and her primary interests include security and the European integration.

592014Spring

by Elizaveta Klimenko greater risk of attack, insurance for vessels passing through the Gulf of Aden has also escalated dramatically, further increasing the costs of voyages.7 Due to attempts to increase security of commercial shipping, shipping companies often hire privatized N\HYKZ�[V�KL[LY�HWWYVHJOPUN�WPYH[L�ZRPќZ��:\JO�NYV^PUN�L_WLUZLZ�OH]L�HSZV�HќLJ[-ed the prices on imported and exported goods, increasing costs for both produc-ers and consumers. According to the Sec-retary General of the Gulf Petro-Chemical and Chemical Association (GPCA), Dr. Al Sadoun, heavily loaded chemical and oil vessels are the easiest pirate targets due to their lack of speed and appropri-ate height, making them more vulnerable and accessible for pirates. However, as noted by Al Sadoun, all vessels are tar-gets nowadays, and that contributes to [OL� ¸ULNH[P]L� LJVUVTPJ� KVTPUV� LќLJ[Z�throughout the whole vertical value chain within the entire maritime sector”.8 Many ships are now considering taking alterna-tive routes, such as circulating the Cape of Good Hope,9 but such a passage would be time-consuming and expensive even in return for a smaller chance of pirate at-tack.

Finally, and perhaps the greatest problem of piracy is its continuous spread into the Indian Ocean Region (IOR). Ac-cording to Article 3 under Part II of the UN-CLOS, “Every State has the right to estab-lish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles.”10 However, some countries refuse to fol-low these terms of the convention, such as Somalia, along with a few other pirate-

infested nations, which have expanded their territorial waters up to 800 nautical miles.11 With this comes the issue of how to contain these levels of crime over areas of such magnitude.

The Root Causes of Piracy)LMVYL�HUHS`aPUN�[OL�LѝJHJ`�VM�^OH[�

has been done to combat piracy, the core of the issue and its causes must be evaluated. Somalia has long faced internal political turmoil, which began during the Scramble for Africa, continued throughout [OL�*VSK�>HY�� HUK� PU[LUZPÄLK�\UKLY�:PHK�Barre. In 1991, the clan group, Somali Na-tional Movement overthrew the dictator’s regime. 12 These conditions were a precur-sor to the modern day lawless, fractured, poverty-stricken nation of Somalia. 13

To help the Somali region back on its feet, the UN, in cooperation with the African Union’s African Mission to Soma-lia (AMISOM) and the United States, es-tablished the internationally recognized Transitional Federal Government (TFG) in Mogadishu. The TFG, however, was soon taken down and replaced by their rival group, the Islamic Courts Union (ICU). Due to terrorist organization linkages, Ethiopia militarily intervened to oust the ICU and reinstate the TFG. Weak14 and inexperienced, the interim TFG handed control over to the Federal Government of Somalia (FGS). This instability provided the breeding ground for the emergence of another critical problem, the rise of terror-ism15, which the FGS is currently trying to battle along with its other objective of uni-fying the country.16

One of the greatest barriers to stabil-ity and unity within the nation is the Al-Qa-LKH�HѝSPH[LK�[LYYVYPZ[�NYV\W�VM�:VTHSPH��(S�Shabaab.17 Formerly a militant wing of the UIC, which was able to regroup in 2008 after its defeat,18 the terrorist network has been standing in the way of the former in-ternationally supported interim TFG, and the present FGS, primarily because these governments have the reputation of being ‘western imposed.’19 Declared the “enemy of Islam,” the U.S. has long been a lead-ing target of these extremists, who provide training and weapons to young men to op-erate jihad against the U.S. and its allies.20 Al-Shabaab should be a major concern for the international community because it hampers western involvement in the So-mali government through training, funding, and support, which further destabilizes the region, allowing pirates to take advantage of impunity.21 The government’s distrac-tion with its counterinsurgency objective has created a sick national economy as well. This has led to massive unemploy-ment and poverty,22 impacting23�ÄZOLYTLU�and encouraging wealth-seeking24 Somali teenagers to turn to crime on sea.25

Initially, when Siad Barre’s govern-ment had just fallen apart and Somalia was in no condition to deal with foreign-ers considering its domestic problems, countries like Switzerland and Italy signed contracts with a Somali ‘government’ of-ÄJPHS� [V� K\TW� [V_PJ�^HZ[L� PU[V�:VTHSPH»Z�territorial waters at the cost of $2.50 per ton (such waste disposal would cost $1000 per ton in European waters), con-taminating the coastal Somali marine

Global Shipping and the War on Somali Piracy / Elizaveta Klimenko

JUIS60

life.26 Furthermore, foreign vessels, taking advantage of the chaotic, weak, and in-stable Somali government, began illegally ÄZOPUN�PU�:VTHSP»Z�[LYYP[VYPHS�^H[LYZ��^OPJO�increased starvation on land. As climate VU�SHUK�KPTPUPZOLK�[OL�JYVWZ��:VTHSP�ÄZO-ermen were not able to feed their families, PUJYLHZPUN�KLWLUKLUJ`�VU�ÄZO�HUK� SLHK-ing to famine. This drove some Somali ÄZOLYTHU�[V�[HRL�\W�^LHWVUZ�HUK�KLMLUK�[OLPY� ^H[LYZ�� 6]LY� [PTL�� [OLZL� ÄZOLYTLU�began attacking any ship that passed by, hijacking the crew, and demanding ransom. Foreign exploitation of Somalia’s territorial waters now serves as one of the Q\Z[PÄJH[PVUZ�MVY�:VTHSP�WPYH[LZ��ILJVTPUN�widely known by the locals as the “coast guards” of Somalia.27

The lack of domestic will to combat piracy is further explained by the growth VM�[V^UZ��K\L�[V�[OL�ÅV^�VM�YPJOLZ��\YIHU-ization, and employment for thousands of Somalis. With annual Somali per capita income being only $600, 28 the possibility of acquiring thousands of dollars of ran-som from one single hijacking encouraged ÄZOLYTLU� [V� [\YU� [V� [OL� TVYL� WYVÄ[HISL�business of piracy.29 As pirates returned [V� [OLPY� SHPYZ��JP[PaLUZ�ÅV^LK� PU[V�WVY[Z� [V�establish small restaurants and shops due [V�HU�PUÅ\_�VM�J\Z[VTLYZ�^P[O�[OL�JHWHJ-ity to buy. Piracy has led to the creation of infrastructure30 and jobs on the coast-SPUL�VM�:VTHSPH��HUV[OLY�THQVY�Q\Z[PÄJH[PVU�for the locals’ support. In addition, it has been noted that piracy gains have a cor-relation with decreasing Somali rice prices and reduce the depreciation of the Somali shilling.31

Analysis of Current Counter-Piracy MeasuresInternational Measures – On Sea

0U� VYKLY� [V� M\SÄSS� [OL� LYHKPJH[PVU� VM�piracy, multiple countries, organizations, and civil societies around the world have taken countless measures to target the is-sues, both on land and sea. One strategy has been the deployment of the navy into the HRA through the European Union Na-

]HS�-VYJL��,<�5(=-69�¶�6WLYH[PVU�([SHU-[H�� 0UP[PH[LK� PU� ��,<�5(=-69»Z�TPZ-sion includes: protecting the delivery of the humanitarian aid resources by the World Food Programme (WFP) and the AMISOM to Somalia, deterring, preventing, and re-pressing piracy in Somalia’s territorial wa-ters and the HRA, protecting shipping in or near Somalia’s territorial waters, and TVUP[VYPUN� ÄZOPUN� LU[LYWYPZL�32 China, Iran, India, Russia, and other nations have also deployed their navies into the IOR.33 The U.S. deployment has been one of the greatest due to the nation’s special interest in the region, particularly after the First and Second Gulf Wars, the Iran and Iraq War, and the U.S. war on terrorism.34

The U.S. led multinational Combined Task Force 151 unit has also included the use of aircraft.35

The naval deployment so far has successfully decreased pirate attacks36 and has guaranteed a 100 percent suc-cess rate of protecting the delivery of hu-manitarian aid.37 However, because of this greater risk, pirates have become more aggressive and have developed new tac-tics of assault, with the use of advanced

weaponry including AK47’s, RPG-7 rocket launchers, TT-30 semiautomatic pistols, hand grenades, and other forms of tech-nology, such as the GPS.38 Pirates have also begun using motherships, allowing them to cover a greater distance under higher speed. On top of this increasing aggression, the international naval deploy-ment in the Gulf of Aden has ultimately giv-en birth to a new issue: it has forced piracy to extend its territorial range and opera-tion into the Indian Ocean Region, making it nearly impossible to be tracked. Even within the Internationally Recommended Transit Corridor (IRTC), the naval deploy-TLU[�PZ�PUZ\ѝJPLU[�[V�JV]LY�[OL��TPSSPVU�square miles of sea.39 In addition, legal is-


"With annual Somali per capita income being only ��[OL�WVZZPIPSP[`�VM�HJX\PYPUN�[OV\ZHUKZ�VM�KVSSHYZ�VM�YHUZVT�MYVT�VUL�ZPUNSL�OPQHJRPUN�LUJV\YHNLK�ÄZOLYTLU�

[V�[\YU�[V�[OL�TVYL�WYVÄ[HISL�I\ZPULZZ�VM�WPYHJ �̀"

612014Spring

sues, such as under which circumstances the navy can approach, and board a sus-pected ship, have impeded progress.

Another counter-piracy measure that has been developed is the use of Best Management Practices, a report on preventative attack measures within the HRA.40 Issued by the Maritime Security *LU[LY� ¶� /VYU� VM� (MYPJH� �4:*/6(�� HUK�supported by IMO, the report provides a list of recommendations highly encour-aged for merchant ships, passenger and dry cargo vessels, tankers, and others to follow when passing through the HRA. Ad-vice and information on risk assessment, typical pirate attacks, company planning, ship protection measures, suggested ac-tions in case of a pirate attack, reporting procedures and more is provided by the international maritime community. Advice provided in the BMP is formulated from submitted reports on pirate incidents from vessels that have been previously attacked. Although these international suggestions are helpful, they cannot com-pete against AK47’s. In addition, the pre-ventative measure of the use of citadels as a secure haven from boarded pirates has sometimes led to cases of self-made traps.41

Reporting of pirate incidents through the HRA is crucial and also is emphasized in the BMP report because the only way the community can battle piracy is through the sharing and studying of continuously updated existing knowledge on piracy. In 2004, IMO created the Regional Coop-eration Agreement on Combating Piracy and Armed Robbery against ships in Asia

(RECAAP), which included 16 countries in Asia, and the Djibouti Code of Conduct, both of which were aimed at contribut-ing to information sharing.42 Other orga-nizations with similar aims, following UN’s 1851 Resolution of 2008 are the Contact .YV\W� Vќ� [OL� *VHZ[� VM� :VTHSPH�� ^OPJO�includes more than 60 nations and inter-national organizations43 and the Maritime 3PHPZVU� 6ѝJL� �4(936��44 Reports sub-mitted to IMO are then issued, providing the name of the ship, a description of the incident, the time and date, location, and consequences of said pirate encounter to the international community. Critical de-tails like experience with new strategies of attack and information on the advance-ment of pirate weaponry could potentially save ships from becoming pirate victims. This technique lessens knowledge gaps, as ship operators are able to share and learn from successful and unadvised tac-tics in preventing and battling piracy. The widespread availability of piracy statistics, including the innovative use of satellite imagery to track the growth of newly cre-ated infrastructure in Somalia from ransom money allows the international community to monitor and decide on new methods to counter piracy.45 However, many pirate incidents are still left unreported due to companies’ fear of damaging their repu-tation;46 many human costs are underre-ported as well.47

In addition to following preventive measures and engaging in information sharing, vulnerable shipping vessels pass-ing through the HRA tend to hire Military =LZZLS� 7YV[LJ[PVU� +L[HJOTLU[Z� �=7+Z��

which has also been noted as an option, though not highly recommended, in the Best Management Practices. The use of Private Maritime Security Contractors by cargo companies is an extra measure, taken in addition to other highly recom-mended precautionary measures in the BMP, which involves protection on board through specialized armed guards. The IMB, however, does not advocate the presence of weapons on board due to WV[LU[PHS� [OYLH[Z� [V� ÅHTTHISL� JHYNV�48 Furthermore, the high costs of contracted ZLJ\YP[`�HYL�VM[LU�\UHќVYKHISL�MVY�ZTHSSLY�companies. For larger shipping vessels, convoys also delay the journey, which in-creases expenses even further.49

;V�KH[L��THU`�:VTHSP�ÄZOLYTLU�[\YU�to piracy due to the high risks on sea cre-ated by other pirates and frustration with PSSLNHS� MVYLPNU� ÄZOPUN�� ;OLYLMVYL�� ZLJ\YP[`�OHZ�[V�IL�WYV]PKLK�[V�:VTHSP�ÄZOLYTLU�HZ�well. Even though the international navies have suppressed levels of piracy to some degree, reestablishing order in Somalia’s territorial sea is not part of their mandate. *VUZLX\LU[S �̀�[OL�<UP[LK�5H[PVUZ�6ѝJL�VU�Drugs and Crime has recently prioritized its new mandate of creating law in Somalia’s territorial waters, which would increase order at sea. To help begin some form of maritime law enforcement in Somalia’s territorial waters, the UNODC, in coopera-tion with IMO, FAO, EUCA NESTOR, and UNPOS began an initiative in 2013 in the coastal port of Berbera, to help repair and maintain vessels and equipment provided by the international community for mari-time law enforcement.50 Since the mea-


JUIS62

sure has only recently been initiated, it is too early to analyze its progress. However, [OPZ�HJ[PVU�^PSS�LSPTPUH[L�[OL�Q\Z[PÄJH[PVU�VM�:VTHSP� ÄZOLYTLU�LUNHNPUN� PU�WPYHJ`�K\L�to frustration with foreign exploitation, and create regulation at sea.51

Domestic Measures – On LandThe UN, AMISOM, and the U.S.

helped Somalia with the creation, sup-port, and funding of the interim TFG and the present FGS. Many Somalis, however, are unsupportive of the current govern-ment in Mogadishu because it has been fabricated by European standards and they therefore fear, as stated in the Inter-national Crisis Group, Somalia: The Tran-sitional Government on Life Support, that the government intends to “marginalize and dominate the locals.”52 Also, the issue with western interven-tion fueling radical Is-lamic insurgency can-not be overlooked.53 The African Union (AU), along with the EU, USAID, and other agencies all contribute to providing resource for the AMISOM, whose primary focus is to support the FGS in the stabilization of the nation (particularly through combat-ing the Al-Shabaab) and securing condi-tions for reconstruction and development in Somalia.54 The United Nations Political 6ѝJL�PU�:VTHSPH��<576:��OHZ�HSZV�ILLU�working closely with Somali leaders and civic organizations to create stability and reach agreements with opposition groups

in the nation.55 Nonetheless, the represen-tation of the FGS parliament is question-able, since it consists of clan representa-[P]LZ��UV[�LSLJ[LK�VѝJPHSZ�56 However, the (40:64� OHZ� OHK� PUZ\ѝJPLU[� PUÅ\LUJL�so far on its counter-insurgency acts.57 Though some gains against the Al-Sha-baab have been made, as Lawrence Gi-tonga Mwongera notes, “The fact of the matter is that al-Shabaab is likely to sur-vive in some form or another even after the taking of Kismayu and the change of gov-ernment in Mogadishu.”58 After all, there OH]L� ILLU� PZZ\LZ� ^P[O� PUZ\ѝJPLU[� M\UKZ�and ground troops.59

In 1993 and 1995, the United Na-tions60 carried out a military intervention into Somalia under UNISOM I and UNI-SOM II. The primary objectives of both missions were to settle internal warfare

and establish a safe delivery of humanitar-ian aid, primarily for the displaced Somalis, through the World Food Programme. De-spite the good intentions, both missions were deemed to be unsuccessful. Condi-tions, after the military intervention of the UN, have actually worsened, and the lo-cals are left disappointed and hopeless of any international intervention. 61 To lessen violence in the region, the UN placed an

arms embargo on Somalia in 1992.62 So far, however, the embargo has been inef-MLJ[P]L�K\L�[V�[OL�JVUZ[HU[�PUÅ\_�VM�^LHW-ons from Yemen, Eritrea,63 Ethiopia, pri-vate donors, and the U.S.64 to the TFG.65

One of the greatest fears in the spread of Somali piracy is the recruitment of the young demographic due to the high rates of unemployment in the population. Former Somali pirates established anti-piracy advocacy and increase awareness through the radio, while Somali elders, use alternative employment opportuni-[PLZ��[YHPUPUN�VU�HNYPJ\S[\YL��HUK�ÄZOPUN�HK-vice.66 The 2012 United Nations Develop-ment Report sets one of its primary aims to prioritize the integration of Somali youth in human development and peace building strategies.67

Finally, (and perhaps one of the great-est issues due to its international LќLJ[Z�� PZ� [OL� L_-isting jurisdictional issue of where to hold suspected pirates in custody, where to establish the tribunal, and

what is to be done with them after they serve their sentence. Since the Somali government is already overwhelmed with problems, the international community is involved in the reconstruction of the pris-ons in Somalia, with an emphasis on hu-man rights.

The UNODC is working on improving the conditions of the prisons in Puntland I`� [YHPUPUN� [OL� Z[Hќ� VU� WYVWLY� [YLH[TLU[�


"One of the greatest fears in the spread of Somali pi-racy is the recruitment of the young demographic due to

the high rates of unemployment in the population."

632014Spring

of convicts with consideration of human rights. Moreover, security and treatment has improved for Somali prisoners in Ke-nya.68 The UNODC stresses the impor-tance of the improvement in prison con-ditions as vital to the transformation of a pirate into a normal citizen. The UNODC has recognized that now is an important time to address the issue of “Somali mari-time law enforcement capability.”69 Many state vessels avoid the capturing of pirates because trials are costly, long, and com-plicated.70 Apart from the legal limitations, such as under which circumstances the navy can stop, question, and board a sus-WLJ[LK�WPYH[L�ZRPќ�� [OLYL� YLTHPUZ�`L[�HU-other huge, unresolved issue: what to do with ‘stateless pirates.’71 One pirate, who has been prosecuted and sentenced in the Netherlands, says that he plans to re-main in the Netherlands and have his fam-ily move with him. His lawyer stated “He Z[PSS�ÄUKZ�SPML� PU�[OL�5L[OLYSHUKZ�NYLH[S`�[V�his liking.”72 Hence, the issue with states’ reluctance of engaging in the prosecution of a suspected pirate, unless it directly impedes on their national interest. Trials are costly, time-consuming, and compli-JH[LK��;OL�ÄUHS�V\[JVTL�PZ�[OH[�HS[OV\NO�international suspected prisoner transfers have been largely approved,73 not all na-tions have made agreements to transfer sentenced persons, such as Russia and NATO.74

Policy RecommendationsPiracy is ultimately the result of the

internal instability in Somali, but it is only a symptom of the problem. This symptom

has global repercussions; the international community must prioritize piracy as one of its top problems. It has been recognized and stated multiple times that as long as instability in Somalia persists, so will crime on the sea. Nonetheless, it will take years, if not decades, to correct the issue on land, whereas in the meantime quicker measures could be taken to extinguish pi-racy on the sea. This paper recognizes the complexity of the issue, and under such reasoning will provide three policy recom-mendations, two of which must be done on the sea and in the near future, while the other will be a long term development on land.

First and foremost, weapons must be permitted on merchant vessels if placed in a safe on the captain’s bridge, to which only a few authorities have access. It may be a radical proposal because it would defy the terms of the UNCLOS, which highlights peaceful navigation on seas. The use of Best Management Practices alone does not guarantee safety within the HRA. Powerful water hoses and spiked fenc-ing are appropriate protection measures, but unfortunately cannot compete against machine guns and rocket launchers. If the pirates, on the other hand, sense that their targeted ship is armed, they will not at-tack, retreating and searching instead for more vulnerable vessels. In 2005, the crew of the Seabourn Spirit managed to scare Vќ�:VTHSP�WPYH[LZ��^OV�^LYL�HIV\[�[V�H[-tack by using a ‘sonic gun,’ an American navy-developed acoustic instrument.75 ;OPZ�TL[OVK�JV\SK�IL�LќLJ[P]L�MVY�H�[PTL��however, pirates will soon learn they have

been deceived and ignore the signal, in some instances responding even more HNNYLZZP]LS �̀�HZ�^P[O�[OL��4=�)PZJH-glia.76�;OLYLMVYL��HY[PÄJPHS�^LHWVUZ�JHUUV[�stand against AK47’s. In addition, as has been mentioned above, the use of Private Maritime Security Contractors is highly ef-MLJ[P]L��[OV\NO�UV[�ULJLZZHYPS`�HќVYKHISL��Consequently, the presence of arms on a ]LZZLS�TH`� IL� H�TVYL� LќLJ[P]L� ZVS\[PVU��Possible challenges that can result from this measure are, as Henk Rengelink out-lined, the lack of the crew’s will to undergo ÄYLHYTZ�[YHPUPUN��[OL�YPZR�VM�PUJYLHZPUN�JH-sualties on both the side of the attackers and the victims, and the fact that multiple Z[H[LZ� WYVOPIP[� [OL� JHYYPHNL� VM� ÄYLHYTZ�on merchant vessels (or else deny ship-ping companies the right to pass through a state’s territorial waters.)77 The threat ^LHWVUZ� TH`� OH]L� [V� ÅHTTHISL� JHYNV�has also been noted.78

Second, emphasis should be placed on sentencing of Somali pirates in Somalia or any other nearby African states, such as Kenya. Under no circumstances should convicted pirates be sent to serve their sentence in a developed nation. The issue with aiding these unemployed ex-convicts after their release from prison in foreign nations is also a major problem. Because the FGS is currently weak and divided, it is unable to maintain and rehabilitate all convicts.79 Many Third States ignore acts of piracy on the sea since trials are time-consuming and costly. Therefore, after their prosecution, the international com-munity should contribute capital and help maintain internationally funded detention


JUIS64

centers in Somalia. It is ultimately a ben-LÄJPHS� ZP[\H[PVU� IV[O� MVY� :VTHSPH� HUK� [OL�international community.

Finally, the World Bank must prioritize the development of mining infrastructure in Somalia. Natural minerals such as ura-nium, iron ore, and even oil have been dis-covered, unexploited in the Somali soil.80 Since the TFG has attempted unsuc-JLZZM\SS`� [V� [HRL� HK]HU[HNL� VM� P[Z� ÄZOPUN�industry through SHIFCO, they must seek alternative solutions to economic develop-ment.81 The creation of national and trans-national companies would provide the So-mali demographic with alternative forms of employment, fostering the economic growth of the nation. Within this proposi-tion, it must be stressed that this project will not involve the support of private com-pany development, due to the risk of capi-tal leakage from Somalia. The WB will also have to keep a strict check of where each JLU[�PZ�W\[�[V�\ZL�HUK�[OL�WYVÄ[�P[�JYLH[LZ��in order to prevent corruption.

Conclusion & Future Con-siderations

According to the July 2012 ICC-IMB Report, the amount of actual and attempt-ed pirate attacks recorded from January ��¶�1\UL��OHZ�KLJYLHZLK�82 as a result of counter-piracy measures taken, such as naval deployments and Best Management Practices.83 However, this does not mean that the problem of pi-racy has been eradicated. Increasing ag-gression must be recognized, and even though pirate attacks are less successful, those encountered are not willing to give

up as easily, due to the reward of high ransoms. Many policy recommendations suggested are easier said than done, al-though they are constructive ideas, they are often unfeasible. Further consideration must be given to the negative impact of the eradication of piracy on the Somali locals, who are dependent on wealth ac-quired from it. Greater focus should be placed on the creation of alternative forms of employment, through increasing edu-cation of young Somalis. Other consid-erations should be given to the manage-ment of corruption, possibly through strict multilateral international supervision of :VTHSP�JHWP[HS� ÅV^� PU�I\YLH\JYH[PJ� [YHUZ-actions. The leakage of merchant vessel information from pirate informers located in ports must be looked into as well.84 One of the greatest issues remains the problem with ‘stateless pirates,’ who lack forms of PKLU[PÄJH[PVU�� YLQLJ[LK�I`� [OLPY� Z[H[L�NV]-ernments, are then left for the international JVTT\UP[`� [V�OHUKSL��ILJVTPUN�ÄUHUJPHS�burdens. Since piracy is an issue with tre-mendous international repercussions, ev-ery state in the world must share the inter-est of eradicating this problem and helping Somalia. It might take eight years, it might take three decades, but through slow and meticulously planned measures, Somalia may see a more promising future.

Endnotes1. James Castonguay, International Shipping: Glo-

balization in Crisis, Vision Project Inc.,pp.2, http://www.visionproject.org/images/img_magazine/pdfs/international_shipping.pdf

2. EU NAVFOR Somalia, Maritime Security Centre – Horn of Africa, http://www.mschoa.org/

on-shore/about-us

3. David Michel and Russel Sticklor, Indian Ocean Rising: Maritime Security and Policy Chal-lenges, (STIMSON: July 2012), pp. 24, O[[W!��PZZ\\�JVT�VWLUIYPLÄUN�KVJZ�PUKPHUVceanrising?mode=window&pageNumber=26

4. 1982 UNCLOS, Part 16, Article 301, http://www.un.org/depts/los/convention_agree-ments/texts/unclos/part16.htm

��;V�]PL^�[OL�PU[LYUH[PVUHS�SLNHS�KLÄUP[PVU�VM�WPYHJ �̀�see 1982 UNCLOS, Part 7, Article 101, http://www.un.org/depts/los/convention_agreements/texts/unclos/part7.htm

6. Tom Moseley, “Somali Pirates Receive $9.5M Record Ransom,” The Independent, Nov. 7, 2010, Accessed February 18, 2013, http://www.independent.co.uk/news/world/africa/somali-pirates-receive-95m-record-ransom-2127555.html

7. Ruchita Beri, “Piracy in Somalia: Addressing the Root Causes Strategic Analysis”, Strategic Analysis. 35 (3), (May 2011), pp. 461

8. Rabi-Al-Thani, “GPCA Seeks More Mea-sures to Stem Attacks of Pirates, Saudi Gazette”, March 5, 2013, Accessed February 2, 2013, http://www.saudiga-zette.com.sa/index.cfm?method=home.regcon&contentID=20111111111952

9. Ruchita Beri, Piracy in Somalia: Addressing the Root Causes Strategic Analysis, May 2011, pp. 461

10. 1982 UNCLOS, Part 2, Article 3, http://www.un.org/depts/los/convention_agreements/texts/unclos/part16.htm

11. UN Security Council, “Report of the Monitoring Group on Somalia Pursu-ant to Security Council Resolution 1811 (2008),” www.un.org/ga/search/view_doc.asp?symbol=S/2008/769, pp. 29; Mwangura, “African Sea Pirates,” www.ecop.info/english/e-sap-net-40.html; International Maritime Bureau, “Piracy and Armed Robbery against Ships: Annual Report, International Maritime Bureau [online] October 12, 2009, www.freerepublic.com/focus/f-news/2414700/posts, pp.1-15 as referenced in Christopher L. Daniels, Somali Piracy and Terrorism in the Horn of Africa, The Scarecrow Press, 2012, pp. 6


652014Spring

��7HYKV�:H\]HNLV[��7PYHJ`�Vќ�:VTHSPH�HUK�0[Z�Challenges to Maritime Security: Problems and Solutions, UNISCI Discussion Papers, No. 19, January 2009, pp. 255 as refer-enced in Ruchita Beri, Piracy in Somalia: Ad-dressing the Root Causes Strategic Analysis, May 2011, pp. 453

13. Somalia has been topping the Failed State Index for a number of consecutive years: “The 2012 Failed States Index – Interactive Map and Rankings,” Foreign Policy, Mar. 5, 2013, Accessed February 2, 2013, http://www.foreignpolicy.com/failed_states_in-dex_2012_interactive. See previous years for more information.

14. “Weak and divided, it controls only a few roadblocks in the capital, Mogadishu, has neither the capacity nor the resources to ÄNO[�WPYHJ �̀¹�/HUZLU��º7PYHJ`�PU�[OL�.YLH[LY�Gulf of Aden’ (note 38) as referenced in Pirates, Fishermen and Peacebuilding: Op-tions for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 370. See also: Ken Menkhaus, ‘Somalia: ‘they created a dessert and called it peace(building)’’, Review of African Political Economy, Vol. 36, No. 120 (2009), pp.223-233.

15. Lawrence Gitonga Mwongera, Taking Stock in Somalia, Open Security, Aug. 30, 2012, http://www.opendemocracy.net/opense-curity/lawrence-gitonga-mwongera/taking-stock-in-somalia

16. Christopher L. Daniels, Somali Piracy and Terrorism in the Horn of Africa, 2012, The Scarecrow Press, pp. xii. For more detailed information on the recent history of Somalia, refer to pp. 1-25 of the book.

17. ‘Al-Shabaab’ means ‘youth’, as noted in James Fergusson, “A Failed State is Back from the Dead,” The Independent, March 5, 2013, http://www.independent.co.uk/news/world/africa/somalia-a-failed-state-is-back-from-the-dead-8449310.html

18. Christopher L. Daniels, “Somali Piracy and Terrorism in the Horn of Africa”, 2012, The Scarecrow Press, pp. xii.

19. Ibid, xii.

20. Ibid, xii.

21. Ibid, xii.

22. See: Somalia Human Development Re-port 2012, Empowering Youth for Peace Development, pp. 30, http://www.undp.org/content/dam/undp/library/corporate/HDR/Arab%20States/HDR-Somalia-2012-E.pdf. According to the UNDP, the Multidimensional head count poverty for Somalia is estimated at 81.8%, with 99% of all Somalis in the nomadic region and 94% of Somalis in rural areas, multidimensionally poor. See also: WB 2007, as referenced in pp. 16, http://applications.emro.who.int/docs/CCS_Soma-lia_2010_EN_14487.pdf : “…around 43% of the population lives in extreme poverty (less than US $ 1 a day) and 73% live on less than US $ 2 a day), with ever-increasing KLZ[P[\[PVU�YH[LZ�¹�:LL�HSZV!�:[L]L�)SVVTÄLSK��“The Pirate Hunters,” The Somaliland Times, 2009, Accessed March 2, 2013, http://www.somalilandtimes.net/sl/2009/380/41.shtml.

23. See African Human Development Report 2010, pp. v

24. Christopher L. Daniels, “Somali Piracy and Ter-rorism in the Horn of Africa,” The Scarecrow Press, 2012, pp. 43.

25. CC, International Maritime Bureau, Piracy and Armed Robbery against Ships Annual Report, January 1–December 31, 2007, ICC, London, 2008, pp. 5–6. See also: Santiago Iglesias Baniela and Juan Vinagre Rios, Piracy in Somalia: A Challenge to the International Community, 2012, pp. 696.

26. Christopher L. Daniels, Somali Piracy and Ter-rorism in the Horn of Africa, The Scarecrow Press, 2012, pp. 34.

27. Ruchita Beri, Piracy in Somalia: Addressing the Root Causes Strategic Analysis, May 2011, pp. 452. See also: Santiago Iglesias Baniela and Juan Vinagre Rios, Piracy in Somalia: A Challenge to the International Community, 2012, pp. 696.

28. Christopher L. Daniels, Somali Piracy and Ter-rorism in the Horn of Africa, The Scarecrow Press, 2012, pp. 39.

29. Santiago Iglesias Baniela and Juan Vinagre Rios, Piracy in Somalia: A Challenge to the International Community, 2012, pp. 696.

30. Dr. Anja Shortland, Treasure Mapped: Using Satellite Imagery to Track the Developmental ,ќLJ[Z�VM�:VTHSP�7PYHJ �̀�1HU��WW��

O[[W!��^^ �̂VWLUIYPLÄUN�VYN�KVJZ�[YLHZ\YL-mapped.pdf

31.Ibid., pp. 7-8

32. EU NAVFOR, http://eunavfor.eu/mission/. See currently deployed units at: http://eunavfor.eu/deployed-units/surface-vessels/

33. Christopher L. Daniels, Somali Piracy and Ter-rorism in the Horn of Africa, The Scarecrow Press, 2012, pp. xiii

34. Edited by David Michel and Russel Sticklor, Indian Ocean Rising: Maritime Security and 7VSPJ`�*OHSSLUNLZ��0::<�6WLUIYPLÄUN��1\S`�15, 2012, pp. 43, http://issuu.com/open-IYPLÄUN�KVJZ�PUKPHUVJLHUYPZPUN��

35. Pp. 11, http://www.bergenrisksolutions.com/index.php?dokument=377. See also: in Christian Bueger, J An Stockbruegger, Sascha Werthes, Pirates, Fishermen and Peacebuilding: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 356.

36. See: Table 1: Location of Actual and At-tempted Attacks, January-June, 2007-2012 of ICC-IMB 2012 Report

37. EU NAVFOR, http://eunavfor.eu/mission/

38. Alisha Ryu, ‘UN Warns of Ties between Lawless Groups in Somalia and Yemen’, at http://www.voanews.com/english/archive/2009-05/2009-05-07-voa47.cfm?CFID=251948197&CFTOKEN=15570709&jsessionid=0030a403ca0494faf6f23148433750124842. See also: Chris-tian Bueger, J An Stockbruegger, Sascha Werthes, Pirates, Fishermen and Peacebuild-ing: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 362 and Abdi Ismail Samatar; Mark Lindberg; Basil Mahayni, The Dialectics of Piracy in Somalia: the rich versus the poor, Third World Quarterly, pp. 1378

� ��9L\[LYZ��¸(U[P�WPYHJ`�JVUMLYLUJL�IHJRZ�Vќ�VU�international naval force”, France 24 Interna-tional News, 19 May 2009, as referenced in Henk Rengelink, Tackling Somali Piracy, pp. 191, http://link.springer.com.myaccess.library.utoronto.ca/article/10.1007/s12117-012-9171-3/fulltext.html

40. Best Management Practices, MSCHOA, http://www.mschoa.org/docs/public-docu-ments/bmp4-low-res_sept_5_2011.pdf


JUIS66


��-VY�KLÄUP[PVU�VM�JP[HKLS�ZLL!�)LZ[�4HUHNL-ment Practices, MSCHOA, pp. 38, http://www.mschoa.org/docs/public-documents/bmp4-low-res_sept_5_2011.pdf

42. International Maritime Organization, http://www.imo.org/OurWork/Security/PiracyArme-dRobbery/Pages/Default.aspx. See also IMO, http://www.imo.org/OurWork/Security/PiracyArmedRobbery/Pages/Djibouti-Code-of-Conduct.aspx.

��*VU[HJ[�.YV\W�VU�7PYHJ`�Vќ�[OL�*VHZ[�VM�Somalia, http://www.thecgpcs.org/about.do?action=background

��4HYP[PTL�3PHPZVU�6ѝJL��O[[W!��^^ �̂J\ZUJ�navy.mil/marlo/mission.html

45. Dr. Anja Shortland, Treasure Mapped: Using Satellite Imagery to Track the Developmental ,ќLJ[Z�VM�:VTHSP�7PYHJ �̀�*OH[OHT�/V\ZL��WW�� O[[W!��^^ �̂VWLUIYPLÄUN�VYN�docs/treasuremapped.pdf

46. Christian Bueger, J an Stockbruegger, Sascha Werthes, Pirates, Fishermen and Peacebuild-ing: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 23

47. Oceans beyond Piracy Project 2011, The Human Cost of Somali Piracy, www.oceanuslive.org/main/viewnews.aspx?uid=00000275. As referenced in: Somalia Human Development Report 2012, Empowering Youth for Peace and Develop-ment, pp. 40, http://www.so.undp.org/shdr/Somalia%20Human%20Development%20Report%202012.pdf

48. Lliam Bellamy, What Can Be Done t Counter Piracy? 2009, pp. 7

49. Ibid., pp. 8

50. UNODC, Counter Piracy Programme, Dec. 2012, pp. 16, http://www.unodc.org/documents/easternafrica//piracy/CPP_bro-chure_December_2012.pdf

51. Christian Bueger, Jan Stockbruegger, Sascha Werthes, Pirates, Fishermen and Peacebuild-ing: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 376

The U.N. Security Council sets stage for lifting Somalia arms embargo, Reuters, Mar. 2, 2013, http://www.reuters.com/article/2013/03/02/us-somalia-arms-un-idUSBRE92109620130302

63. Christopher L. Daniels, Somali Piracy and Ter-rorism in the Horn of Africa, The Scarecrow Press, 2012, pp. xi

64. The United States has recently donated drones to the Kenyan and Ugandan military to combat insurgency in Somalia. Apart from such military aid, the U.S. also provides large ÄUHUJPHS�Z\WWVY[�HUK�L_WLY[PZL��3H^YLUJL�Gironga Mwongera, Taking Stock in Somalia, Open Security, Aug. 30, 2012, http://www.opendemocracy.net/opensecurity/lawrence-gitonga-mwongera/taking-stock-in-somalia

65. Ruchita Beri, Piracy in Somalia: Addressing the

Root Causes Strategic Analysis, May 2011, pp. 461

66. Somalia Human Development Report 2012, Pp. 14-15, http://www.so.undp.org/shdr/Somalia%20Human%20Development%20Report%202012.pdf

67. Ibid., pp. v. See also: Most pirates are young and unemployed men: Ibid., pp. 40

68. UNODC, Counter Piracy Programme, Dec. 2012, Pp. 13, http://www.unodc.org/documents/easternafrica//piracy/CPP_bro-chure_December_2012.pdf

69. Ibid., pp. 5.

70. Henk Rengelink, Tackling Somali Piracy, Jun. 2012, pp. 189

71. The issue has not yet been resolved by legal scholars. See: V. Narayan, No ID Cards to Prove Pirates’ Nationality, Feb. 5, ��O[[W!��HY[PJSLZ�[PTLZVÄUKPH�PUKPH[PTLZ�com/2011-02-05/mumbai/28366457_1_OPQHJR�WPYH[LZ�UH]HS�VѝJPHSZ�:LL�HSZV!�/LUR�Rengelink, Tackling Somali Piracy, Jun. 2012, pp. 189

72. Zeerovers voor de Rotterdamse rechter [Maritime pirates brought to trial in The Hague]”, NRC Handelsblad, 26 May 2010 as referenced by Henk Rengelink, Tackling Somali Piracy, Jun. 2012.

73. Hanbook on the International Transfer of Sen-

52. International Crisis Group, Somalia: The Transitional Government on Life Support, Africa Report N°170 – 21 February 2011, pp. 19, http://www.crisisgroup.org/~/media/Files/africa/horn-of-africa/somalia/170%20Somalia%20The%20Transitional%20Govern-ment%20on%20Life%20Support.pdf

53. Christian Bueger, J an Stockbruegger, Sascha Werthes, Pirates, Fishermen and Peacebuild-ing: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy, August 2011, pp. 362

54. AMISOM, http://www.africa-union.org/root/au/auc/departments/psc/amisom/amisom.htm

55. UNPOS, http://unpos.unmissions.org/Default.aspx?tabid=9730&language=en-US

56. Lawrence Gitonga Mwongera, Taking Stock In Somalia, Jun. 29, 2012, http://www.opendemocracy.net/opensecurity/lawrence-gitonga-mwongera/taking-stock-in-somalia

57. Ruchita Beri, Piracy in Somalia: Addressing the

Root Causes Strategic Analysis, May 2011, pp. 461

58. Lawrence Gitonga Mwongera, Taking Stock in Somalia, Open Security, Aug. 30, 2012, http://www.opendemocracy.net/opense-curity/lawrence-gitonga-mwongera/taking-stock-in-somalia

59. Cecilia Hull and Emma Svensson, African Union Mission in Somalia (AMISOM): Exemplifying African Union Peacekeeping Challenges, FOI-R-—2596—SE, Swed-ish Defence Research Agency, Stockholm, October 2008, p. 28. As referenced Ruchita Beri, Piracy in Somalia: Addressing the Root Causes Strategic Analysis, May 2011, pp. 453

60. See UN Security Council Resolutions against piracy at: http://www.geneva-academy.ch/RULAC/un_resolutions_and_reports.php?id_state=204

61. Alex Bellamy and Paul Williams, Understand-ing peacekeeping, 2nd ed, Cambridge: Polity Press, 2010, 94–96 securitizing piracy (�THYP[PTL�WLHJL�TPZZPVU�Vќ�[OL�OVYU�VM�Africa? By Francois Vreÿ

62. The UN is currently considering the lifting of the arms embargo. In Michelle Nichols,


tenced Persons, UNODC, Criminal Justice Handbook Series, 2012, pp. 19, http://www.unodc.org/documents/organized-crime/Publications/Transfer_of_Sentenced_Persons_Ebook_E.pdf


75. Henk Rengelink, Tackling Somali Piracy, Jun. 2012, pp. 192

76. Liam Bellamy, What can be Done to Counter Somali Piracy?, Research Institute for Euro-pean and American Studies, 2009, pp. 6

77. Henk Rengelink, Tackling Somali Piracy, Jun. 2012, pp. 192-193

78. Liam Bellamy, What can be Done to Counter Somali Piracy?, Research Institute for European and American Studies, 2009, pp. 6. See pg. 8 for more detailed suggestions of types of weapons (ex. The use of heavy weapons rather than small arms due to the crew being less likely to use it against themselves in a disagreement, create an ad-vantage over pirate artillery, aim at the group rather than the individual, and alarming sound would frighten pirates away.)


80. See: Somalia: Mining, EIU ViewsWire, Jul. 8, 2003, http://search.proquest.com.myaccess.library.utoronto.ca/docview/466327599 and Anonymous, Puntland reportedly bars Ethiopia from explor-ing oil in central Somalia, BBC Monitoring 5L^ZÄSL��4HY��O[[W!��ZLHYJO�proquest.com.myaccess.library.utoronto.ca/docview/452346115

81. Christopher L. Daniels, Somali Piracy and Ter-rorism in the Horn of Africa, The Scarecrow Press, 2012, pp. 33

82. ICC-IMB Piracy and Armed Robbery Against Ships Report, Jan. 1 – 30 Jun. 2012.

83. ICC-IMB Piracy and Armed Robbery Against

Sascha Werthes. “Pirates, Fishermen and Peacebuilding: Options for Counter-Piracy Strategy in Somalia, Contemporary Security Policy.” Contemporary Security Policy. ISSN 1352-3260. Volume 32. Issue 2. August 2011. pp. 356 - 381

Castonguay, James. International Shipping: Glo-balization in Crisis. Vision Project Inc.: 2.

http://www.visionproject.org/images/img_maga-zine/pdfs/international_shipping.pdf

*VU[HJ[�.YV\W�VU�7PYHJ`�Vќ�[OL�*VHZ[�VM�:VTHSPH��Accessed February 20, 2013. http://www.thecgpcs.org/about.do?action=background

Daniels, L. Christopher. “Somali Piracy and Ter-rorism in the Horn of Africa.” The Scarecrow Press. 2012.Accessed April 12, 2013.

EIU ViewsWire. “Somalia: Mining.”The Economist Intelligence Unit. July 8, 2003. Acccesed April 12, 2013. http://search.proquest.com.myaccess.library.utoronto.ca/docview/466327599

EU NAVFOR. “Mission.” Accessed February 20, 2013. http://eunavfor.eu/mission/

EU NAVFOR. “Deployed Units.” Accessed Febru-ary 20, 2013. http://eunavfor.eu/deployed-units/surface-vessels/.

Passport Administrator. “The 2012 Failed States Index – Interactive Map and Rankings.” Spe-cial Report. Foreign Policy. 2013. Accessed February 2, 2013. http://www.foreignpolicy.com/failed_states_index_2012_interactive.

Hull, Cecilia, and Emma Svensson. “African Union Mission in Somalia (AMISOM): Exemplify-ing African Union Peacekeeping Chal-lenges.” 2008.http://www.foi.se/ReportFiles/foir_2596.pdf

International Crisis Group, Somalia. “The Transi-tional Government on Life Support.” 2011. http://www.crisisgroup.org/~/media/Files/africa/horn-of-africa/somalia/170%20Somalia%20The%20Transitional%20Govern-ment%20on%20Life%20Support.pdf

International Maritime Bureau [online]. “Piracy and Armed Robbery against Ships: Annual Re-port.” 2009. www.freerepublic.com/focus/f-news/2414700/posts.

International Maritime Organization. “Piracy and

Ships Report, Jan. 1 – 30 Jun. 2012. See also: “The fact that a good many of the at-tacks by Somali pirates were unsuccessful is due in large part to the anti-piracy measures taken by ship owners and crews. In 2007, 81 % of the failed attempts were averted by preventive measures and 19 % by naval intervention; in 2008 and 2009, preventive measures saved the day in 78 % and 77 % percent of cases, respectively, whereas 22 % and 23 % of the attacks were parried by naval forces.” as stated in Henk Rengelink, Tackling Somali Piracy, Jun. 2012, pp. 194.

84. Ruchita Beri, Piracy in Somalia: Addressing the Root Causes Strategic Analysis, May 2011, pp. 454.

BibliographyAlisha Ryu. “UN Warns of Ties between Law-

less Groups in Somalia and Yemen”. Voice of America. November 2, 2009. Accessed January 28, 2013. http://www.voanews.com/content/a-13-2009-05-07-voa47-68816022/363946.html

AMISOM. “African Union Mission in Somalia”. Accessed February 20, 2013. http://www.africa-union.org/root/au/auc/departments/psc/amisom/amisom.htm.

Anonymous. “Puntland reportedly bars Ethiopia from exploring oil in central Somalia.” BBC 4VUP[VYPUN�5L^ZÄSL��O[[W!��ZLHYJO�proquest.com.myaccess.library.utoronto.ca/docview/452346115

Baniela, Santiago Iglesias and Juan Vinagre Rios. “Piracy in Somalia: A Challenge to the International Community.” ISSN 0373-4633. Volume 65. Issue 4. The Journal of Naviga-tion. October 2012.

Bellamy, Liam. “What Can Be Done to Counter Piracy?”. RIEAS Publications. Issue No. 129. March 2009.http://www.bergenrisksolutions.com/index.php?dokument=377

Beri, Ruchita. "Piracy in Somalia: Addressing the Root Causes". Strategic Analysis.35 (3): 452-464. 2011.

)SVVTÄLSK��:[L]L��¸;OL�7PYH[L�/\U[LYZ�¹�;OL�Somaliland Times. 2009. Accessed April 2, 2013. http://www.somalilandtimes.net/sl/2009/380/41.shtml.

Bueger, Christian, and Jan Stockbruegger, and

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Armed Robbery against Ships.” Accessed February 1, 2013. http://www.imo.org/OurWork/Security/PiracyArmedRobbery/Pages/Default.aspx

International Maritime Organization. “Djibouti Code of Conduct.” Date Accessed: February 1, 2013. http://www.imo.org/OurWork/Se-curity/PiracyArmedRobbery/Pages/Djibouti-Code-of-Conduct.aspx.

4HYP[PTL�3PHPZVU�6ѝJL�)HOYHPU��¸4HYSV�4PZZPVU�¹�Accessed February 13, 2013. http://www.cusnc.navy.mil/marlo/mission.html

EUNAVFOR. “Maritime Security Centre – Horn of Africa.” Accessed January 23, 2013. http://www.mschoa.org/on-shore/about-us.

Menkhaus, Ken. ‘Somalia: ‘they created a dessert and called it peace(building).’’ Review of African Political Economy. 2009. Accessed February 12, 2013.

Michel, David, and Russell Sticklor. “Indian Ocean rising maritime security and policy chal-lenges.” Washington, DC: Henry L. Stimson Center. 2012. http://www.stimson.org/images/uploads/research-pdfs/Book_IOR_2.pdf.

Middleton, Roger. “Trends in Piracy: A Global Problem with Somalia at the Core.” https://www.cimicweb.org/cmo/medbasin/Docu-ments/Horn%20of%20Africa/Middleton%20Trends%20in%20Piracy%20A%20Global%20Problem%20with%20Somalia%20at%20the%20Core.pdf

Moseley, Tom. “Somali Pirates Receive $9.5M Record Ransom.” The Independent. Nov. 7, 2010. Accessed February 18, 2013. http://www.dw-world.de/dw/ar-ticle/0,5142358,00.html

MSCHOA. “Best Management Practices.” Ac-cessed January 16, 2013. http://www.mschoa.org/docs/public-documents/bmp4-low-res_sept_5_2011.pdf

Mwangura. “African Sea Pirates.” IMB. Accessed February 2, 2013. www.ecop.info/english/e-sap-net-40.html

Mwongera, Lawrence Gitonga. “Taking Stock in Somalia.” Open Security. 2012. http://www.opendemocracy.net/opensecurity/lawrence-gitonga-mwongera/taking-stock-in-somalia.

Somalia Human Development Report. “Empower-ing Youth for Peace Development..” 2012.http://www.undp.org/content/dam/undp/library/corporate/HDR/Arab%20States/HDR-Somalia-2012-E.pdf.

Thani, Rabi-Al. “GPCA Seeks More Measures to Stem Attacks of Pirates.” Saudi Ga-zette. April 23, 2013. Accessed April 24, 2013. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=20111111111952

UNCLOS. 1982. “Article 301.” http://www.un.org/depts/los/convention_agreements/texts/unclos/part16.htm

UNCLOS. 1982. “Article 101.” http://www.un.org/depts/los/convention_agreements/texts/unclos/part7.htm

UNODC. “Counter Piracy Programme.” Accessed January 7, 2013. http://www.unodc.org/documents/easternafrica//piracy/CPP_bro-chure_December_2012.pdf

UNODC. “Hanbook on the International Transfer of Sentenced Persons.” Criminal Justice Handbook Series. 2012. http://www.unodc.org/documents/organizedcrime/Publications/Transfer_of_Sentenced_Persons_Ebook_E.pdf.

<576:��¸<UP[LK�5H[PVUZ�7VSP[PJHS�6ѝJL�MVY�Somalia.” Accessed February 3, 2013. http://unpos.unmissions.org/Default.aspx?tabid=9730&language=en-US

<5:*��¸9\SL�VM�3H^�PU�(YTLK�*VUÅPJ[Z�7YVQLJ[¹�Accessed February 3, 2013. http://www.geneva-academy.ch/RULAC/un_resolu-tions_and_reports.php?id_state=204

UN Security Council. 2008. “Report of the Moni-toring Group on Somalia Pursuant to Se-curity Council Resolution 1811.” Accessed January 28, 2013. www.un.org/ga/search/view_doc.asp?symbol=S/2008/769

WHO. “Country Cooperation Strategy for WHO and Somalia 2010-2014.” 2010. Accessed February 3, 2013. http://applications.emro.who.int/docs/CCS_Somalia_2010_EN_14487.pdf

Fergusson, James. “A Failed State is Back from the Dead.” The Indepentent. January 13, 2013. Accessed February 27. 2013 http://www.independent.co.uk/news/world/africa/somalia-a-failed-state-is-back-from-the-dead-8449310.html

Narayan, V. 2011. “No ID Cards to Prove Pirates’ Nationality.” The Times of India. February 5, 2011. Accessed February 27. 2013. http://HY[PJSLZ�[PTLZVÄUKPH�PUKPH[PTLZ�JVT��02-05/mumbai/28366457_1_hijack-pirates-UH]HS�VѝJPHSZ�

Nichols, Michelle. “The U.N. Security Council sets stage for lifting Somalia arms em-bargo.” Reuters. March 2, 2013. Accessed March 3, 2013. http://www.reuters.com/article/2013/03/02/us-somalia-arms-un-idUSBRE92109620130302

Oceans Beyond Piracy Project 2011, “The Human Cost of Somali Piracy Report.” OceanusLive. June 2, 2011. www.oceanuslive.org/main/viewnews.aspx?uid=00000275.

Rabi-Al-Thani. “GPCA Seeks More Measures to Stem Attacks of Pirates. Saudi Gazette. March 5, 2013. Accessed March 10, 2013. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=20111111111952.

Rengelink, Henk. Tackling Somali Piracy. 2012.http://link.springer.com.myaccess.library.utoronto.ca/article/10.1007/s12117-012-9171-3/fulltext.html “Anti-piracy conference IHJRZ�Vќ�VU�PU[LYUH[PVUHS�UH]HS�MVYJL�¹�Reuters. 2009. Accessed February 14, 2013. www.france24.com/en/20090519- HU[P�WPYHJ`�IVK`�IHJRZ�Vќ�PU[LYUH[PVUHS�UH]HS�force-un-somalia.

Samatar, Abdi Ismail, and Mark Lindberg, and Basil Mahayni. “The Dialectics of Piracy in Somalia: the rich versus the poor.” Third World Quar-terly. Date Accessed: April 1, 2013.

:H\]HNLV[��7HYKV�� 7PYHJ`�Vќ�:VTHSPH�HUK�Its Challenges to Maritime Security: Problems and Solutions, UNISCI Discussion Papers, No. 19.

Shortland, Dr. Anja. “Treasure Mapped: Using Satellite Imagery to Track the Developmental ,ќLJ[Z�VM�:VTHSP�7PYHJ �̀¹��O[[W!��^^ �̂VWLUIYPLÄUN�VYN�KVJZ�[YLHZ\YLTHWWLK�WKM


692014Spring

Deconstructing A Transnational Petroleum Order

by David Coddon

ince the early 20th century, no commodity has been more associated with the State than oil. Oil OHZ�ILLU�H[�[OL�OLHY[�VM�U\TLYV\Z�PU[LYUH[PVUHS�JVUÅPJ[Z��PUJS\KPUN�>VYSK�>HY�0��[OL�YVSL�VM�[OL�PU[LYUHS�JVTI\Z[PVU�LUNPUL�"�>VYSK�>HY�00��1HWHULZL�LќVY[Z�[V�JHW[\YL�WL[YVSL\T�YLZLY]LZ�PU�[OL�East Indies); the Cold War (disputes between international oil companies and developing states);

HUK�[OL�ÄYZ[�.\SM�>HY��0YHX»Z�PU]HZPVU�VM�2\^HP[��1 Moreover, state-owned companies, such as Petrobras of Brazil, Saudi Aramco of Saudi Arabia, and Gazprom of Russia have historically dominated the international petroleum industry. Indeed, by one estimate, as of 2008, state-owned companies held over 80 percent of world reserves, HUK�ÄM[LLU�VM�[OL�^VYSK»Z�[^LU[`�SHYNLZ[�VPS�JVTWHUPLZ�^LYL�Z[H[L�V^ULK�2 It is no surprise that Daniel Yergin, in his seminal book on the history and global politics of oil, observed that “[oil is a commodity that is] intimately inter-twined with national strategies and global politics and power.”3

S

In recent years, however, oil has be-gun to break away from the State. As Al-fredo de Jesus, Founding Director of the Transnational Petroleum Law Institute, has noted:

[…] a large number of national or multinational companies are no longer national or multinational: they are now global companies. The core issue is that to a great extent, ‘national champions’ are progressively disappearing—all that is left is an illusion of nationality and maybe a little nostalgia […] Nowadays most ‘na-tional champions’ belong to ‘foreign’ capi-tal [and] structure their investments and operations through third countries in order [V�ILULÄ[� MYVT�ILPUN�H� ºUH[PVUHS»�VM�Z\JO�

(a) third country […]4

As oil companies have become in-creasingly detached from the State, the international oil industry has followed suit. >OH[� ^HZ� VUJL� HU� PUK\Z[Y`� KLÄULK� I`�JVTWL[P[PVU�PZ�UV^�HU�PUK\Z[Y`�KLÄULK�I`�cooperation. What was once an interna-tional industry centered around national interests is now a transnational industry centered around global interests. And what was once an industry governed ex-clusively by state laws has become one governed by state and non-state laws.

(Z� PU[LYLZ[PUN� HUK� ZPNUPÄJHU[� HZ� [OL�transformation of the international oil in-dustry has been, it is just one example of a broader phenomenon. Several other

industries, including the international com-mercial industry, the international con-struction industry, and the international sports industry, have followed a similar pattern.5 In each case, cooperation has replaced competition, global interests have replaced national interests, and a network of state and non-state laws has replaced a hierarchy of state and inter-state laws.

This phenomenon, which this article calls ‘transnationlization,’ raises a number of important questions. How does this transition occur? Why do some industries follow this pattern while others do not? For that matter, when has a particular industry crossed the threshold from ‘international’

David Coddon. David Coddon founded the Journal of Undergraduate International Studies eleven years ago, with the aim of showcasing the best in undergraduate research focused around International Studies. He is now an Attorney and the Founder of CODDICOMM CONSULTING LLC, a boutique JVUZ\S[PUN�ÄYT�ZWLJPHSPaPUN�PU�PU[LYUH[PVUHS�ULNV[PH[PVU��TLKPH[PVU��HUK�HYIP[YH[PVU�

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to ‘transnational?’ Are there certain crite-ria that must be met and, if so, how can these be measured? Finally, looking to the future, will other, newer industries, such as alternative energy, follow this pattern?

This article does not attempt to an-swer all of these questions. Rather, its main objective is simply to lay the foun-dation for a new research agenda. Ideally, scholars and practitioners from interna-tional relations (IR) and international law �03��^PSS� JVSSHIVYH[L� PU�HU�LќVY[� [V�HUZ^LY�these questions and others that may arise.

As a starting point, this article ad-KYLZZLZ� [OL� ÄYZ[� X\LZ[PVU!� OV^� KVLZ� H�particular industry transition from ‘interna-tional’ to ‘transnational?’ This article ap-proaches this question through the lens of IR and IL theory. There is, thankfully, no need to reinvent the wheel: IR and IL scholars have already designed a num-ber of sophisticated theories that provide a helpful analytical road map. The chal-lenge is getting them to speak the same language. As Abbott and Snidal (2012) have noted: IR scholars should “[…] en-gage more concretely with the practice of international law.”6 IL scholars and prac-titioners, for their part, should have a basic understanding of the major IR theories, which give a sense of order and logic to an often confusing world.

(Z� H� ÄYZ[� Z[LW� [V^HYK� JYLH[PUN� [OPZ�common language, Section 2 of this ar-[PJSL�KL]LSVWZ�H�\UPÄLK�[`WVSVN`�VM�THQVY�theories from IR and IL. These theories are placed in two broad categories: (1) econo-mistic theories that view actors’ identities and interests as independent variables

and (2) sociological theories that view ac-tors’ identities and interests as dependent variables.

Applying this typology, Section 3 draws on two sociological theories—con-structivism and legal pluralism—to de-velop a model of transnationalization that explains how and why certain international industries have become transnational, au-tonomous legal orders.

Section 4 illustrates the model devel-oped in Section 3 through a case study of the global petroleum industry, focus-ing on how this industry, which was once dominated by the State, has been at the vanguard of the transnational movement.

Finally, Section 5 revisits the ques-tions posed in Section 1 and makes sug-gestions for future research.

��(�<UPÄLK�;`WVSVN`Scholars and practitioners working at

the intersection of IR and IL need to devel-op a shared vocabulary. How should they NV� HIV\[� KVPUN� [OPZ&� ;OL� ÄYZ[� Z[LW� PZ� [V�reduce the major theories from IR and IL to their core components. The second step is to identify common features among these components. This simple exercise reveals that major theories from IR and IL fall under two categories: (1) those deriv-ing from Economics and (2) those deriving from Sociology. The fundamental distinc-tion between the two categories involves how they view actors’ identities and inter-ests. In short, economistic theories view them as independent variables, whereas sociological theories view them as depen-dent variables.

Figure One shows the results of this intellectual exercise. Major theories from IR and IL are categorized based on whether they view identities and interests as independent variables (economistic) or dependent variables (sociological). To be sure, this discussion is not meant to provide an exhaustive theoretical treat-ment. Rather, the goal is simply to identify common features and provide conceptual clarity that may serve as the basis for a future research agenda. With this narrow goal in mind, the remainder of this section KPZJ\ZZLZ� [OL� KLÄUPUN� MLH[\YLZ� VM� LHJO�category and provides a brief overview of major theories from IR and IL.

Economistic TheoriesEconomistic theories are rooted in a

rational choice model of behavior in which identities and interests are exogenously given. In other words, identities and in-terests are independent variables, whose characteristics are assumed a priori in-stead of being created over time. Spe-JPÄJHSS �̀� [OL� LJVUVTPZ[PJ� HWWYVHJO� Z[HY[Z�with the basic assumption that identities HUK� PU[LYLZ[Z�HYL�KLÄULK�I`�[OL�HUHYJOPJ�nature of world--actors that are rational, self-interested, and utility-maximizing. Furthermore, ideas are judged by their ¸\ZLM\SULZZ¹� PU�HJOPL]PUN�LѝJPLUJ`�NHPUZ��which are measured in material terms.7

The economistic theory of Neo-real-ism, for instance, attaches great impor-tance to the global distribution of power. States are primarily interested in maximiz-PUN�[OLPY�WV^LY��\Z\HSS`�KLÄULK�PU�TPSP[HY`�terms) relative to others’. The independent

Deconstructing a Transnational Petroleum Order / David Coddon

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role for international law is small, and it is mainly seen as a tool used by major pow-ers to reach goals. Similarly, international institutions and cooperation can do little to alter fundamental identities and interests of states?8

Neo-liberalism shares neo-realism’s assumptions of anarchy and self-interest-LK�HJ[VYZ�� 0[�KPќLYZ��OV^L]LY�� PU� P[Z�ILSPLM�that the negative aspects of anarchy, for example arms races and the security di-lemma, can be mitigated through inter-national institutions, international law, and cooperation. Neo-liberalism draws exten-sively on economic theory to explain how institutions and cooperation can be used to solve collective action problems, reduce transaction costs, and mitigate problems associated with incomplete information and sunk costs. It also places greater em-phasis on domestic politics and economic

power.9

Some IL scholars have made similar arguments. Goldsmith and Posner (2005), for instance, develop a rational choice model of international law, which posits, “[…] international law emerges from states acting rationally to maximize their inter-ests, given their perceptions of the inter-ests of other states and the distribution of power.”10 In their view, states comply with international law primarily because they fear retaliation if they do not. To a lesser extent, they comply to preserve their repu-tation as reliable negotiating partners.11

Traditional accounts of private inter-national law have relied on a similar state-centric model. Legal state positivism, for instance, argues that states, and, to an extent, inter-state entities, are the only le-gitimate source of international law. Adher-ents of this view tend to dismiss laws cre-

ated by non-state entities as “soft law.”12 These theoretical approaches,

[OV\NO�KPќLYLU[� PU�THU`�^H`Z��ZOHYL� [OL�fundamental assumption that actors are rational and self-interested. Decisions and outcomes are explained in instrumental [LYTZ�� [OYV\NO� H� JVZ[�ILULÄ[� HUHS`ZPZ��and an attempt is not made to explain how actors develop their identities and in-[LYLZ[Z�PU�[OL�ÄYZ[�WSHJL�

Sociological TheoriesIn stark contrast, theories derived

from sociology assume that identities and interests are endogenously created, de-pendent variables. Instead of being de-ÄULK� I`� [OL� \UKLYS`PUN� Z[Y\J[\YL� VM� [OL�international system, they are socially con-structed over time through interaction and what Max Weber called “intersubjective understanding.”13


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Constructivism, for instance, provides an important alternative to neo-realism and neo-liberalism. In the constructiv-ist worldview, structure and process are mutually constituted: anarchy exists, but P[Z�TLHUPUN� PZ�KLÄULK�I`� PU[LYHJ[PVU�HUK�perception; actions are constrained, but not dictated by, the anarchic structure of the world.14 Unlike neo-realism and neo-liberalism, constructivism views ideas as independently important, not just a means of achieving material ends.15

IL scholars working in the construc-tivist tradition have explained how ac-tors comply with international law out of a sense of obligation. For instance, the Chayes and Chayes (1995) ‘managerial account’ emphasizes the “ […] continuous processes of argument and persuasion—ºQ\Z[PÄJH[VY`� KPZJV\YZL»� [OH[� \S[PTH[LS`�‘jawbones’ states into compliance.”16 Similarly, Koh (1997)17 explains how states ‘internalize’ international norms into the domestic sphere, and Goodman and Jinks (2003)18 argue that ‘acculturation’ is a key third mechanism (along with coercion and persuasion) for bringing about compliance with international norms.19

Finally, the school of ‘legal pluralism’ may be considered the sociological coun-terpart to traditional legal state positivism. While legal positivists view international law as a rigid hierarchy, ranging from state and inter-state law at the top (‘hard law’) to various incarnations of non-state law (‘soft law’) at the bottom, legal pluralists make no clear distinction between hard law and soft law, and view international law as a series of overlapping networks

Not surprisingly, sociological theo-ries are better equipped to meet these challenges. Two theories in particular—constructivism and legal pluralism—pro-vide the theoretical underpinnings for the model of transnationalization developed in this section. As discussed in Section 1, a core tenet of constructivism is that identi-ties and interests evolve over time and are ultimately the product of interaction and JVTT\UPJH[PVU�� ;OL� ÄYZ[� [^V� WHYHKPNT�shifts illustrate this principle: rivals become allies and national interests lose their reso-nance as actors reconsider who they are and where their interests lie. The third paradigm shift, which describes the in-creasing importance of non-state sources VM�SH^�HUK�ºIV[[VT�\W»�SH^�THRPUN��ÄUKZ�theoretical support in legal pluralism. Un-like legal state positivism, legal pluralism helps explain how non-state actors devel-op social norms, and how these norms ul-timately become binding legal obligations.

Figure 2 demonstrates how these paradigm shifts occur over two phases. First, actors in an international industry create a social community. Second, this social community evolves into a transna-tional legal order. The remainder of this section examines each of these phases.

Phase One: From Self-Interested Ac-tors to Social Community

Consider a hypothetical international industry. The actors who make up this industry—an assortment of companies, individuals, and trade groups, among oth-ers—do not see themselves as part of a community. Instead, they identify as com-

derived from multiple legitimate sources, both state and non-state. This ‘network’ VM�SH^Z�YLÅLJ[Z�[OL�ZVJPHS�JVUZ[Y\J[PVU�HUK�evolution of norms, which have gradually acquired the status of legal obligations.20

2. A Sociological Model of Transnationalization

Transnationalization, the process by which an international industry becomes a transnational industry, presents a ma-jor challenge to economistic theories. As discussed in Section 1, transnational in-dustries have undergone three paradigm shifts: competition has been replaced by cooperation, national interests have been replaced by global interests, and a hierar-chy of state and inter-state laws has been replaced by a network of state and non-state laws.

To understand transnationalization, then, it is essential to know how and why these paradigm shifts have occurred in certain industries. This, in turn, requires a basic understanding of how actors devel-VW�PKLU[P[PLZ�HUK�PU[LYLZ[Z�PU�[OL�ÄYZ[�WSHJL�and how these evolve over time. Because econonmistic theories take identities and interests for granted, it is no surprise that [OL`� OH]L� KPѝJ\S[`� L_WSHPUPUN� [OPZ�� ;OPZ�problem is compounded by their strict adherence to an obsolete, state-centric model that does not recognize the crucial role played by non-state actors in these industries. Similarly, because they tend to view law-making as a ‘top-down’ venture, in which laws originate with state entities, they largely ignore the ‘bottom-up’ pro-cess by which laws are also made.


732014Spring

petitors who happen to have one thing in common—they provide similar goods or services.

They only work together to further their own interests, and they do so pri-marily through a series of ‘exchange con-tracts.’ These are short-term, discreet contracts which parties enter into for the ZVSL� W\YWVZL� VM� JVTWSL[PUN� H� ZWLJPÄJ�transaction.21 If, for instance, Company

A from State X wants to sell widgets to Company B from State Y, the two com-panies will execute a sales contract that KLÄULZ� [OL�RL`� [LYTZ�VM� [OL�KLHS·WYPJL��quantity, date of delivery, method of pay-ment, and so forth. They each view the contract as an instrument that provides short-term economic gain; it does not cre-ate a relationship or establish long-term goals or interests.

So far, this story is consistent with economistic theories. These actors are rational, self-interested, and utility-maxi-mizing. At times, they do cooperate—but

[These relational contracts no longer approach] the contract exclusively as a confrontation of individual interests but YH[OLY�HZ�[OL�\UPVU�VM� [^V�KPќLYLU[� [`WLZ�of interests creating a new mutual interest: making the contractual project work.22

In constructivist terms, the parties’ identities and interests—the way they view themselves and the society in which they operate—have fundamentally changed.

In the beginning, they saw themselves as competitors who occasionally worked together only out of necessity and for M\UKHTLU[HSS`� ZLSÄZO� YLHZVUZ�� ,_JOHUNL�contracts were the result of negotiations that balanced competing interests. Now, the parties see themselves as partners in a joint enterprise. The relational contract, then, can be seen as a blueprint to which parties agree—a roadmap for achieving a common goal.

To this point, the discussion of this hypothetical industry has focused on the micro level—the evolution of ideas and in-

only to further their own self-interest. In this sense, the role played by exchange contracts is analogous to the role of in-ternational institutions and law that neo-realists and neo-liberals describe.

This story, however, is incomplete. What if Company A and Company B begin to see themselves not as rival businesses with competing interests, but as members of a common enterprise with shared inter-

ests? Cooperation will no longer be seen as a mere instrument to further self-inter-est. Instead, it will be seen as a goal in and VM�P[ZLSM·[OL�KLÄUPUN�MLH[\YL�VM�H�JVTTVU�project.

The fundamental building block of this common project is the ‘relational con-tract,’ which establishes long-term social and business relationships among parties. The goal is no longer to simply complete a particular transaction—parties now seek to establish and maintain cooperative, long-term relationships that will be mutu-HSS`�ILULÄJPHS�MVY�THU`�`LHYZ�[V�JVTL!


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terests among a select group of parties. But what happens at the macro, or indus-try-wide, level? If other actors follow a similar pattern, the same paradigm shift—from competition to cooperation—will oc-cur at the macro level through the devel-opment of a series of long-term, relational contracts. Taken together, these relational contracts form the main building block of a new, autonomous social community. Actors now consciously view themselves as members of this community who have common interests and goals.

Phase Two: From Social Community to Legal Order

But this is only half the story. A true transnational industry must be capable of ZLSM�YLN\SH[PVU�� 0[� ULLKZ� LѝJPLU[�� YLSPHISL�mechanisms to enforce contracts and re-solve disputes.

In the past, these mechanisms were exclusively provided by the State. Inter-UH[PVUHS� PUK\Z[YPLZ� ^LYL� ÄYTS`� YVV[LK� PU�the inter-state, Westphalian system. When negotiating exchange contracts, one of the major challenges was deciding which state’s law would govern the substance of the agreement in the event of a dispute. A well-drafted contract would generally include an express choice of law clause stating, for instance, that any dispute would be resolved in accordance with the law of State X.

Even if the parties failed to include such a clause (which was surprisingly common), it was still assumed that the law of a particular state would govern the substance of the contract. If the parties

went to litigation in a state court, that court would have to determine which state’s law HWWSPLK� \UKLY� P[Z� ¸JVUÅPJ[� VM� SH^Z¹� HW-proach. The merits of the case typically turned on this one question.

But what if the parties expressly agree that non-state law will govern the contract? For that matter, what if they JOVVZL�H�ZWLJPÄJ�UVU�Z[H[L�SH^�[V�NV]LYU�the contract? Returning to the example from the previous section, suppose that Companies A and B are negotiating a re-lational, as opposed to an exchange, con-[YHJ[�� ;OL`� HYL� OH]PUN� KPѝJ\S[`� KLJPKPUN�which law should govern the substance of the agreement. Company A, not surpris-ingly, prefers the law of its state (X), and company B prefers the law of its state (Y). In the past, this might have led to an im-passe, forcing the parties to leave out a choice of law clause or, worse, cancel the transaction altogether.

The parties, however, now consider themselves part of a social community. They approach the contract with a spirit of cooperation and a common goal. There is nothing about these interests or goals that is linked with a particular state—as members of a social community with com-mon interests and goals, it simply does not matter where the parties come from or where they are based. In other words, the law of a party’s home state no longer VќLYZ�HU`�WHY[PJ\SHY�HK]HU[HNL�

Accordingly, it makes no sense for them to waste time and resources—not to mention risk destroying the entire enter-prise--debating which state’s law should apply. A better approach would be to

identify a source of law that is both neutral and tailored to the parties’ interests and goals. The logical place to start is with the social community itself. Members of this JVTT\UP[`� OH]L� KLÄULK� [OLPY� PU[LYLZ[Z�through a series of relational contracts. Over time, these interests have taken on the role of social norms that govern rela-tions among actors, but are not legally binding.

To complete the process of transna-tionalization, then, these non-binding so-cial norms must become binding legal ob-ligations. This occurs through two primary mechanisms: (1) model contracts and (2) transnational arbitration.

Model ContractsThe terms ‘standard-form contract’

and ‘model contract’ are sometimes used interchangeably. There is, however, an im-portant distinction between them.

A ‘standard-form contract’ is “a pre-printed contract containing set clauses, used repeatedly by a business or within H�WHY[PJ\SHY� PUK\Z[Y`� [V�TLL[� [OL� ZWLJPÄJ�situation.”23 These contracts, which are sometimes called ‘contracts of adhe-sion,’ tend to be one-sided because they are written by organizations representing parties with similar interests. For instance, an association of professional landlords might draft a standard-form ‘Landlord-Tenant Agreement’ that, not surprisingly, favors landlords.

A ‘model contract,’ on the other hand, is—at least in theory—an objective contract drafted by a neutral third party. This third party is typically comprised of


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leading scholars and practitioners in the industry. The parties to the contract are free to select which parts of the model they would like to adopt.

Parties to international transactions have historically relied on standard-form contracts. This is not surprising, given the traditional view of contracts as a confron-tation of individual interests. To save time and money, similarly situated parties de-veloped standard form contracts that pro-tected their interests. This led to two major problems. First, due to asymmetrical infor-mation and bargaining power, wealthier, more sophisticated parties with access to expensive attorneys and accountants would often impose their terms on weaker parties (hence the term ‘contract of adhe-sion’). Second, even where both parties were highly sophisticated, they would each attempt to impose their own forms (with corresponding self-serving terms) on the other. This often led to the so-called ‘battle of the forms,’ where the parties ^V\SK�^HZ[L�[PTL�HUK�TVUL`�ÄNO[PUN�V]LY�whose form would prevail.

As relational contracts replace ex-change contracts and parties begin to see themselves as members of a com-munity with shared interests and goals, the standard-form approach to nego-tiation is gradually being replaced by the model contract approach. This new ap-proach begins with the premise that the parties are not rivals playing a zero-sum game. Instead, they are partners develop-ing a blueprint to achieve a common goal. 4VKLS�JVU[YHJ[Z��[OLU��HYL�ZWLJPÄJHSS`�KL-signed to achieve common goals and are

KLÄULK�I`�H�ZWPYP[�VM�JVVWLYH[PVU��;OLZL�model contracts serve to codify the social norms that parties have created through relational contracts.

By themselves, model contracts have no legal power. As the name suggests, they are simply ‘models’ that parties may \ZL�VY� PNUVYL�HZ� [OL`�ZLL�Ä[��)\[�VUJL�H�model contract becomes the basis of an actual, signed contract, its provisions be-come legally binding and enforceable. On an industry-wide scale, as more and more parties rely on model contracts, these pro-visions take on the role of an autonomous, PUK\Z[Y`�ZWLJPÄJ�IVK`�VM�Z\IZ[HU[P]L� SH �̂��In the above hypothetical, Parties A and B may now insert language stating that the substance of the contract is governed by the law of the industry in which they operate. Because this law is neither state-created nor dependent on states, it is a truly transnational body of substantive law.

Transnational ArbitrationHaving agreed on the applicable sub-

stantive law, the parties have one more major decision to make: how will poten-tial disputes be resolved? In the past, the answer was relatively straightforward: dis-putes would be resolved by the compe-tent state court under its procedural and evidentiary rules. Determining which state OHK� Q\YPZKPJ[PVU� ^HZ� VM[LU� KPѝJ\S[�� I\[� P[�was always clear that a state court would ultimately render a decision.

This is another area where the tradi-tional dominance of the State has been cast into doubt. Party A, for instance, may be concerned that a potential dispute will

be litigated in Party B’s home state, and vice-versa—the assumption being that state courts will favor their own citizens. Another concern is that state courts, in general, are simply not the best forum in which to resolve these types of disputes. These courts are not members of the community, and judges cannot be expect-LK� [V� \UKLYZ[HUK� [OL� ZWLJPÄJ� PU[LYLZ[Z�and goals the parties share.

This is where transnational arbitration comes in. As a private, contractual form of dispute settlement, it can be fully tai-lored to a particular dispute. Parties may insert an arbitration clause stating that any dispute between them will be resolved by arbitration. The decision to include an ar-IP[YH[PVU�JSH\ZL�YLÅLJ[Z�H�M\UKHTLU[HS�KL-ZPYL�[V�WYLZLY]L�YLSH[PVUZOPWZ�I`�LѝJPLU[S`�HUK� JVUÄKLU[PHSS`� YLZVS]PUN� KPZW\[LZ� PU� H�manner that tends to be more civilized and amicable than litigation in a state court.

Arbitration, then, is the glue that holds a legal order together. It provides an LѝJPLU[�� WYP]H[PaLK� ^H`� [V� THPU[HPU� HUK�strengthen this system in the face of dis-putes. It is also highly customizable—par-ties choose arbitrators who are experts in the subject matter of the dispute and are active, respected members of the com-munity. In addition to its role in resolving disputes and holding legal orders togeth-er, arbitration itself is another source of transnational law. The awards rendered by tribunals comprise a transnational body of substantive and procedural law.

This marks the end of the second—HUK� ÄUHS·WOHZL� VM� [YHUZUH[PVUHSPaH[PVU��The result is an autonomous, transnational


JUIS76

the early 20th century. During this time, pioneering private companies took advan-tage of economies of scale and integrated WYVK\J[PVU� TVKLSZ� [V� Z[PÅL� JVTWL[P[PVU�and capture a dominant market position25 This was followed by the age of empire �YV\NOS`�LUJVTWHZZPUN�[OL�ÄYZ[�OHSM�VM�[OL�twentieth century), in which oil became a proxy for power, and states sought to ag-grandize this power through military domi-nance and expansion. Finally, the second half of the twentieth century was marked by the age of nationalization, during which states exerted direct control over their own natural resources through the devel-opment and expansion of state-owned companies.26

Is a fourth age on the horizon? Ac-cording to some, it has already begun. As early as the 1970s, a group of schol-ars began discussing the existence of an autonomous, transnational petroleum order, known as the lex petrolea. In their view, this order is autonomous because it makes and implements its own rules. It is [YHUZUH[PVUHS� ILJH\ZL� [OLZL� Y\SLZ� YLÅLJ[�interests that are not rooted in any particu-lar state or nationality. In this sense, this new order represents a profound break with the global petroleum industry’s con-tentious past.

A New CommunityHow did this break occur? It began

with the development of an autonomous, transnational community. This commu-nity, sometimes referred to as the societas petroleatorum27, evolved organically and gradually as petroleum industry actors be-

legal order that is both self-created and self-sustaining. It produces its own rules by converting social norms into binding legal obligations through model contracts and transnational arbitration. It regulates itself through the use of customized, con-tractual dispute resolution that does not rely on state courts.

To this point, the discussion of trans-nationalization has been quite abstract, focusing on hypothetical industries. The next section illustrates these abstract prin-ciples through an in-depth examination of the global petroleum industry.

3. Case Study: the Global Oil IndustryA Contentious Past

In The Prize, Daniel Yergin tells the story of the global petroleum industry from the mid-19th century through the early 21st century. This is a story marked by ÄLYJL�JVTWL[P[PVU�[OH[�L]LU[\HSS`�PU]VS]LK�everyone from “wildcat drillers, smooth-talking promoters, and domineering entre-preneurs, to highly trained scientists and engineers, great corporate bureaucracies, and state-owned companies.”24 It is a sto-Y`�KLÄULK�I`�[OL�PUJYLHZPUN�WLY]HZP]LULZZ�of the State, with countless examples of governments exerting control over petro-leum resources to gain global power and PUÅ\LUJL��0[�PZ��HIV]L�HSS��H�Z[VY`�VM�H�Y\[O-less, winner-take-all world, where identi-[PLZ�HUK�PU[LYLZ[Z�^LYL�KLÄULK�PU�[OL�TVZ[�narrow, self-serving terms.

This story played out in three stages. First came the age of monopoly, lasting roughly from the mid-19th century through

gan to rethink their positions in society and their relationships with each other.

In the past, international petroleum transactions were mainly executed in the form of traditional concession agreements based on mining sector contracts. These [`WPJHSS`� YLÅLJ[LK� HZ`TTL[YPJ� IHYNHPUPUN�power, with a powerful party imposing its interests on a weak party. Each side sought only to promote its own self-in-terest, often measured in terms of short-term gain. There was no contemplation of mutual gain or long-term, cooperative relationships. These traditional concession agreements, in other words, were a clas-sic example of the ‘exchange contracts’ and ‘standard-form’ contracts discussed in Section 3.

In time, these exchange contracts and standard-form contracts were re-placed by ‘relational contracts’ and ‘model contracts.’ These contracts are premised VU�[OL�ILSPLM�[OH[�¸B¯D�[OL�KPќLYLU[�WSH`LYZ�of the oil and gas industry ‘value maintain-ing a long-term relationship built on coop-eration,’ particularly with oil producers.”28 -\Y[OLYTVYL�� [OL`� YLÅLJ[LK� [OL� WYPUJPWSL�that “ […] parties to long-term contracts do not enter contracts just for a particular business but also to create or preserve a relationship that will allow them to ben-LÄ[� MYVT��HUK�WYLZLY]L�V]LY�[PTL��J\YYLU[�business transactions at the same time it allows them to develop new ones.”29 At heart, these contracts have one thing in common: they seek to make oil and gas exploration and production possible and WYVÄ[HISL�30

Broadly speaking, there are three


main types of relational contracts in the modern, global petroleum industry: (1) modern concession agreements; (2) joint venture agreements; and (3) production-sharing agreements:

1. Modern Concession Agreements are entered into between a host state and a foreign company. The typical agreement grants a licence (a contractual right, not a property interest), to the foreign company that allows it to “explore, develop, sell, and export oil or minerals extracted from H�ZWLJPÄLK�HYLH�MVY�H�Ä_LK�WLYPVK�VM�[PTL��*VTWHUPLZ�JVTWL[L�I`�VќLYPUN�IPKZ��VM-ten coupled with signing bonuses, for the license to such rights.”

��1VPU[�=LU[\YL�(NYLLTLU[Z�HYL�LU-tered into between National Oil Compa-nies (NOCs) and International Oil Com-panies (IOCs). These agreements allocate risks and costs between NOCs and IOCs HUK�HSSV^�[OL�OVZ[�Z[H[L�[V�ZOHYL�PU�WYVÄ[Z��royalties, and taxes.

3. Finally, Production Sharing Agree-ments are entered into between foreign companies and host states. Under these agreements, “the state retains ownership of its natural resources and negotiates H� WYVÄ[�ZOHYPUN� Z`Z[LT� ^P[O� [OL� MVYLPNU�company: the PSA recognizes that the ownership of the natural resources rests in the state, but at the same time permits for-eign corporations the right to manage and VWLYH[L�[OL�KL]LSVWTLU[�VM�[OL�VPS�ÄLSK�¹31

Taken together, these relational con-tracts form the heart of an autonomous, transnational petroleum community. They signal the importance of shared goals,

Petroleum Industry Model ContractsTraditionally, international petroleum

transactions were bogged down by what lawyers call the ‘battle of the forms.’ Par-ties negotiating a contract regularly relied on their own standard forms of agree-TLU[�� >OLU� [OLZL�WYV]PZPVUZ�JVUÅPJ[LK��each party would insist on the adoption of its own, self-serving terms. This could lead to protracted, costly battles that would of-[LU�SLH]L�IV[O�WHY[PLZ�\UZH[PZÄLK�

Model contracts act as an alternative [V� [OPZ� PULѝJPLU[� HUK� JVZ[S`� IH[[SL� VM� [OL�forms:

the [international petroleum] industry has […] worked on a cooperative basis to develop and use various types of pe-[YVSL\T�JVU[YHJ[Z� [V� NHPU� [OL� ILULÄ[Z� VM�Z[HUKHYKPaH[PVU�HUK�LѝJPLUJ �̀32

By one estimate, at least 80 per-cent of the contents of modern interna-tional petroleum contracts include the same clauses.33 Model contracts provide H�U\TILY�VM�ILULÄ[Z�� )`�L_WLKP[PUN� [OL�negotiating process, they lower transac-tion costs and facilitate greater petroleum exploration and production. By relying on standard provisions, they promote unifor-mity, standardization, and predictability. -PUHSS �̀�ILJH\ZL�[OL`�HYL�PUK\Z[Y`�ZWLJPÄJ�and drafted by experienced professionals, they are ideally suited to international pe-troleum transactions.34

Most model contracts are drafted by professional organizations.

Other model contracts include: the Canadian Association of Petroleum Land-mens’ ‘Operating Agreement;’ the Petro-

cooperation, and long-term business re-lationships. The various actors involved in this industry begin to see themselves as active members of a community with common goals and interests. Not only do they identify as members of this communi-ty, but they also know who else is a mem-ber and, equally important, who is not.

There are three main groups of ac-tors that comprise this community: (1) oil producers; (2) oil companies (NOCs and IOCs), and (3) corporations engaging in parapetroleum activities. Other members include, but are not limited to: professional organizations (individuals who deal with common professional problems); trade organizations (corporate members repre-senting a particular business group); think tanks, and members of the arbitration community (lawyers, arbitrators, and arbi-tration institutions).

New Legal OrderThis community forms the basis of

the lex petrolea. As the model developed in Section 3 demonstrates, the develop-ment of an autonomous community is VUS`�[OL�ÄYZ[�WOHZL�VM�[YHUZUH[PVUHSPaH[PVU��Once actors have formed a community built on a series of long-term relational contracts, and developed a body of so-cial norms based on their common goals and interests, these norms must become legally binding and enforceable.

This occurs through two primary mechanisms: (1) model contracts and (2) transnational arbitration.


JUIS78

SL\T� 1VPU[� =LU[\YL� (ZZVJPH[PVU»Z� º4VKLS�<UP[�(NYLLTLU["»�[OL�<UP[LK�2PUNKVT�6ќ-shore Operators Association’s ‘Sale and Purchase Agreement;’ and the American Petroleum Institute’s ‘Model Unit Agree-ments.’35

Finally, model contracts fall under two broad categories: (1) upstream agree-ments and (2) midstream agreements:

1. In the petroleum industry, ‘up-stream’ refers to the exploration, devel-opment, and production phase of the business. Professional organizations have developed a number of model contracts designed to standardize and facilitate upstream transactions. Examples of up-stream model contracts include: Study and Bid Agreements, Farmout Agree-ments, Joint Operating Agreements, and Unit Agreements.

2. ‘Midstream,’ on the other hand, refers to the gathering, processing, trans-port, and sale of crude oil resources. Ex-amples of midstream model contracts include: Gas Sales Agreements, Crude Oil Lifting Agreements, Crude Oil Sales Agreements, Gas Processing Agree-ments, and Gas Transfer Agreements.36

Transnational Arbitration of Petroleum Disputes

Through these model contracts, the global petroleum industry has created an autonomous body of substantive law that governs petroleum agreements. In this way, as predicted by sociological ac-counts of international law, non-binding social norms have evolved into binding legal obligations.

model has gradually been replaced by an overlapping network of state and non-state law.

It is less clear why and how this has happened and whether this trend will con-tinue. This article has attempted to answer one question in particular: how have cer-tain industries transitioned from ‘interna-tional’ to ‘transnational?’

In tackling this question, this article has relied extensively on two sociological theories—constructivism from IR and legal pluralism from IL—to explain how certain industries have evolved into transnational, autonomous legal orders through the so-cial construction of identities and interests. :WLJPÄJHSS �̀�[OLZL�PUK\Z[YPLZ�HYL�YVV[LK�PU�social communities that have established an autonomous body of law through mod-el laws and transnational arbitration. In this way, they are both self-created and self-sustaining.

To illustrate how these concepts work in practice, this article examined the global petroleum industry. The evolution of this industry began with the development of an autonomous transnational petroleum community (the Societas Petroleatorum). ;OPZ�JVTT\UP[`�JOHUULSSLK�HUK�ZVSPKPÄLK�its interests through the development of model contracts designed to facilitate oil exploration and production. Over time, these interests evolved into a set of gen-eral principles, which have been further re-ÄULK�HUK�KL]LSVWLK�[OYV\NO�[YHUZUH[PVUHS�arbitration.

As discussed in Section I, the main goal of this article has been to introduce the concept of transnationalization and lay

)\[� VUL� ÄUHS� Z[LW� YLTHPUZ�� 0U� VYKLY�to be a truly autonomous legal order, this community must be able to regulate it-self—that is, it needs a way to resolve disputes and enforce obligations without relying on outside mechanisms.

This is accomplished through the use of transnational arbitration. Members of the community—NOCs, IOCs, and oth-ers—have made a strategic choice to re-fer disputes to independent transnational bodies that are created by the model contracts themselves. The arbitrators are often members of the community who are chosen for their expertise and experience with transnational petroleum disputes.

0U� HKKP[PVU� [V� ZLY]PUN� HZ� HU� LѝJPLU[�HUK� JVUÄKLU[PHS� TLHUZ� VM� YLZVS]PUN� KPZ-putes, transnational arbitration provides another source of autonomous law. As tribunals resolve certain ambiguous points of law, their decisions become established principles that parties incorporate in future agreements.37

The petroleum industry depicted in The Prize is rapidly becoming obsolete. It is being replaced by a genuinely trans-national, autonomous legal order--the lex WL[YVSLH��[OH[� YLÅLJ[Z� [OL� PUJYLHZPUN� PT-portance of non-state sources of law and is leaving its contentious past behind.

ConclusionThe trend is clear: a number of inter-

national industries have become increas-ingly transnational, as the State has lost its dominance, competition has given way to cooperation, and a state-centric legal


792014Spring

the foundation for a new research agenda. Many questions remain to be answered. Foremost among these is why certain industries have followed this path while others have not. Hopefully, the model developed here will assist researchers as they tackle this question. Another intrigu-ing question looks to the future: will other, newer industries follow this pattern? The alternative energy industry, for instance, is still in its relative infancy. Can the world look forward to an autonomous, transna-tional alternative energy industry? What would such an industry look like? Would this facilitate the development of renew-able energy resources, or might it be an obstacle to further growth?

These are all important and challeng-ing questions that might not have satis-factory answers. Hopefully, the concep-tual framework established here will assist scholars and practitioners in their quest to answer them.

Endnotes1. Daniel Yergin, The Prize: The Epic Quest for

Oil, Money, and Power, Free Press, 1991, at p. xv.

2. Id. at p. 770.

3. Id. at p. xv.

4. Alfredo De Jesus, “The Prodigious Story of the Lex Petrolea and the Rhinoceros: Philosophi-cal Aspects of the Transnational Legal Order of the Petroleum Society,” in TPLI Series on Transnational Petroleum Law, 1(1) (2012), at p. 42.

5. Id. at p. 20.

6. Kenneth W. Abbot and Duncan Sindal., “Law, Legalization and Politics: An Agenda for the Next Generation of IR-IL Scholars,” 2012,

1, pp. 181-207.

18. Goodman, Ryan, and Derek Jinks (2003). Toward an Institutional Theory of Sovereignty, Stanford Law Review, Vol. 55, No. 5, pp. 1749-88.

19. For an excellent overview of sociological theories of international law, see Brunnee and Troope.

20. De Jesus at pp. 26-29.

21. Id. at pp. 29-30

22. Id. at pp. 33-34.

23. Black’s Law Dictionary at p. 145.

24. Yergin at p. xv.

25. Formed in 1870, Standard Oil was one of the ÄYZ[�THQVY�JVTWHUPLZ�[V�HKVW[�HU�¸PU[LNYH[-ed” business model that combined supply and distribution functions within one orga-UPaH[PVU��0[�^HZ�HSZV�VUL�VM�[OL�ÄYZ[�[V�[HRL�advantage of the “Trust,” a legal mechanism that allowed it to comply with federal laws that prohibited direct ownership of other companies. The Trust allowed Standard Oil [V�WYVWHNH[L�[OL�SLNHS�ÄJ[PVU�[OH[�P[�KPK�UV[�actually own shares in other companies—these shares were merely held “in trust” for [OL�ILULÄ[�VM�:[HUKHYK�6PS»Z�ZOHYLOVSKLYZ��0U�this way, Standard Oil was able to maintain fourteen wholly-owned and twenty-six partly-owned subsidiaries.

26. “Before the 1970s there were only two major incidents of successful oil nationalization—the ÄYZ[�MVSSV^PUN�[OL�)VSZOL]PR�9L]VS\[PVU�VM�1917 in Russia and the second in 1938 in Mexico. During the 1970s, however, virtu-ally all of the oil resources outside of North America passed form international petroleum companies to the government of oil produc-ers.”

27. De Jesus at p. 39.

28. Id. at p. 31.

29. Id. at p. 31

30. Id. at p. 35

Interdisciplinary Perspectives on International 9LSH[PVUZ!�;OL�:[H[L�VM�[OL�(Y[��1LќYL`�3��+\UVќ� �4HYR�7VSSHJR��LKZ��5L^�@VYR!�Cambridge University Press, 2012 at. p. 5.

7. Alexander Wendt, “Anarchy is what States Make of It: The Social Construction of Power Politics, International Organization 46 (2), 1992 , pp. 391-392; Jutta Brunnee and Stephen J. Toope,, “Constructivist Approaches to International Law,” in Dun-UVќ��1�3��HUK�7VSSHJR��4�(��0U[LYKPZJPWSPU-ary Perspectives on International Law and International Relations: The State of the Art,” 2012, Cambridge Univ .Press.

8. See, for instance, Kenneth N. Waltz, “Structural Realism after the Cold War,” International Security, Vol. 25, No. 1 (Summer 2000), pp. 5–41, and John J. Mearshheimer, “The False Promise of International Institutions,” International Security 19 (3), pp. 5-49.

9. See, for instance, Robert O. Keohane and Lisa L. Martin, “The Promise of Institutionalist Theory,” International Security, Vol. 20, No. 1. (Summer, 1995), pp. 39-51, and Robert Axelrod and Robert 0. Keohane, “Achiev-ing Cooperation Under Anarchy: Strate-gies and Institutions,” in Kenneth A. Oye, ed.,’Coopeyation Undev Anavchy (Princeton: Princeton University Press, 1986), p. 227.

10. Jack K. Goldsmith and Eric A. Posner, The Limits of International Law, Oxford Univ. Press, 2005 at p. 3.

11. Id. at pp. 100-101.

12. De Jesus at pp. 26-28.

13. Wendt at pp. 392-394 and Brunnee and Troope at p. 6.

14. Wendt at pp. 400-406.

15. Brunnee and Troope at p. 4.

16. Chayes, A. and Chayes, A.H., The New Soveriegnty: Compliance with International Regulatory Agreements,” 1995, Harvard Univ. Press.

17. Koh, Harold Hongju (1996). Transnational Legal Process‘: The 1994 Roscoe Pound Lecture, Nebraska Law Review, Vol. 75, No.


JUIS80

31. For an excellent overview of model contracts in the global petroleum industry, see A. Timothy Martin, Model Contracts: A Survey of the Global Petroleum Industry, Journal of Energy & Natural Resources Law, Aug. 2004, vol. 22, No. 3, pp. 281-340.

32. Id. at p. 2.

33. De Jesus at p. 23.

34. Martin at pp. 3-5.

35. Id.

36. Id. at pp. 7-50. Martin notes that he is not aware of any model contracts that are used PU�[OL�º+V^UZ[YLHT»��9LÄUPUN��WYVJLZZPUN��marketing, and distribution) business.

37. For examples of arbitral awards in the petro-leum industry, please see Bishop, D.R.., “International Arbitration Of Petroleum Dis-putes: The Development Of A ‘Lex Petrolea’,” 2000, The Centre for Energy, Petroleum and Mineral Law and Policy.


The Journal of Undergraduate International Studies, published at the University of Wisconsin-Madison, presents a compilation of essays and photos from undergraduate and postgraduate students from around the world. Publications document a wide variety of socio-political issues ranging from international conflict and diplomacy to environmental issues to international economics. Most importantly, the Journal of Undergraduate International Studies is intended to serve as a platform for global discussion and the open exchange of ideas, in effect, expanding our understanding of global interactions.

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