Beltway Bandits’ and ‘Poverty Barons’: For-Profit International Development Contracting and the Military-Development Assemblage

Beltway Bandits’ and ‘Poverty Barons’: For-Profit International Development Contracting and the Military-Development Assemblage

  1. Vijay Kumar Nagaraj

Article first published online: 21 MAY 2015

Development and Change

FORUM 2015

Volume 46, Issue 4, pages 585–617, July 2015

ABSTRACT

This article examines the political economy of for-profit international development contracting and its growing convergence with private military contracting. It attempts a genealogy of contemporary for-profit development contracting, underlining how the ability of for-profit development firms to leverage their simultaneous integration into the global corporate-financial architecture and the global development regime has been central to their spectacular growth. The article maps specific modalities and opportunity structures — contracting vehicles and procurement practices; the politics of the market structure; the contract culture and vendorism; shared circuitries of knowledge and power — which are enabling for-profit contractors to consolidate their influence over the international development regime. It also traces the blurring of boundaries between development and security and how this is shaped and used by development contractors and private military firms alike. The author highlights how a combination of corporate diversification and mergers and acquisitions has paved the way for a market-led development-security assemblage and the birth of the ‘private military-development corporation’, which profits equally from war, peace, reconstruction and development. The study focuses largely on the USA and UK owing to the scale of their international development regimes and for-profit development markets.

INTRODUCTION

War is good for business.

Peace is good for business.

(Ferengi Rules of Acquisition, Nos. 34 and 35)1

The enduring nature of the international development apparatus stems from its remarkable ability to ‘produce new arrangements of knowledge and power, new practices, theories, strategies and so on’ (Escobar, 1995: 9). Many of these ‘arrangements’ and ‘practices’, such as aid, debt relief, bilateral and multilateral development mechanisms, aid effectiveness, etc., have been the subject of significant studies and critiques (see for example, Easterly, 2006; Ferguson, 2006; Gulrajani, 2011; Hyndman, 2009; Moyo, 2009; Sachs, 1993). This article focuses on the political economy of a relatively under-studied ‘arrangement’ in international development, namely for-profit development contracting.2 It considers how for-profit development contractors came to occupy and inhabit the international development regime and how this occupation continues to be sustained and legitimated. It also underlines how, in a context where the lines between development and security are increasingly blurred, for-profit development and military contracting have converged to generate potent market-led development-security assemblages.

International for-profit development contracting is now a multi-billion dollar industry, yet many of its critical aspects remain surprisingly under-studied. While questions of accountability3 and influence4 of international contractors have received some attention in the recent past, particularly in the light of scandals in Iraq (documented by the Center for Public Integrity5), Afghanistan (Rohde, 2012) and Haiti (Centre for Economic Policy Research, 2011a), such scrutiny has largely been episodic in nature and focused on the involvement of specific governments and companies in selected contracts. Similarly, the important body of work on public service contracting in political science or public administration and management,6 which this article also draws on, has not been sufficiently brought to bear on the broader political economy of for-profit international development contracting. Most significantly, the increasing convergence between military and international development contracting and the emergence of market-led security-development assemblages have not been the subject of critical scrutiny.

The contemporary ecology of for-profit development contracting is complex and demands a politically grounded historical and empirical analysis. The rise of International Development Contractors7 (IDCs), therefore, has to be situated in the context of: (a) changes in the political economy of development; (b) the neoliberal transition of the welfare state, especially the privatization of social welfare administration going back to the 1970s USA, and; (c) the growth of large corporate entities powered by global finance capital with diversified and worldwide business interests. The ability to leverage their integration into the global corporate and financial architecture while remaining embedded in the global development regime is central to the spectacular growth story of IDCs. Specific modalities and opportunity structures bearing the imprint of the neoliberal turn enabled IDCs to make deep inroads into the global development regime and consolidate their influence over it. At issue here is not merely how the international development regime benefits IDCs but the mutually constitutive nature of the relationship between the two.

The profitability of international development contracting coupled with the growing imprint of security on development and the consequent blurring of boundaries between the two have also attracted private military firms. Many of them have begun to expand their own portfolios — often through outright acquisition of IDCs — to take advantage of opportunities presented by humanitarian interventions and post-war reconstruction. At the same time, IDCs have steadily expanded their client base to include military establishments. These developments have paved the way for the rise of new market-led development-security assemblages, in which a key apparatus is the ‘military-development corporation’, one that profits equally from making war, talking peace, engaging in post-war reconstruction and doing development.

This article discusses these dynamics largely with respect to IDCs in the USA and UK not only because their international development budgets are among the largest in the world but also because they are home to some of the biggest IDCs and private military firms. In addition, because the international development contracting market in these countries is of longer standing than in many other regions, it reflects the most significant continuities and changes in the organizational ecology and identity of contractors over time, especially in the USA. Nevertheless, the article draws on data and analyses from other contexts as well and many of the issues and questions it raises have wider resonance.

The objective of this contribution, it bears clarifying, is not to contrast the approaches of for-profits (‘vendorism’) with those of non-profit (‘voluntarism’) organizations. Indeed, it is not uncommon for development agencies to consider everyone as a ‘vendor’ and non-profits may well be sub-contractors of IDCs or part of a consortium that is led by or includes IDCs. Moreover, it is important to note that development agencies contract with a range of non-profits; apart from those commonly understood as voluntary organizations or non-governmental organizations (NGOs), these may include universities, research centres, social enterprises and other entities that may well be non-profit in identity or character. Given the well-known concerns over ‘donor-dependency’ and ‘donor-driven agendas’, not to mention the extensive internal and external critiques of the non-profit sector, comparisons between NGOs (non-profits) and IDCs (for-profits) that this article draws upon at various points have to be seen in context and in relation to the specific arguments being made rather than as an uncritical endorsement of non-profit contracting entities. A wide-ranging comparative analysis may well be useful but that is beyond the scope of this paper, which is a critique of the political economy of for-profit development contracting. It focuses on the emergence and consolidation of the power and footprint of IDCs and the implications of these, especially the blurring of lines between for-profit development and military contracting.

Following a brief overview of the size and scale of for-profit development contracting today, the article attempts a genealogy of for-profit international development contracting. It also unpacks the contemporary corporate and market structure of for-profit development contracting through a brief account of the corporate histories of two large IDCs. It then examines how certain modalities of international development aid, in particular large contracting vehicles, the culture of vendorism, the politics of the development contracting market, and shared circuits of knowledge and expertise, create distinct opportunity structures for IDCs. The third section of the article maps the contours of the contemporary military-development complex and charts the rise of market-led development-security assemblages. It examines how for-profit international development actors and private military firms have leveraged the convergence of development and military objectives to enhance their strategic value, political clout and, of course, profits.

THE INTERNATIONAL FOR-PROFIT DEVELOPMENT MARKETPLACE: A BRIEF OVERVIEW

In 2010, the United States Agency for International Development (USAID) awarded contracts worth US$ 5.3 billion to IDCs, while it awarded a total of US$ 5.1 billion to non-profits, UN agencies and the World Bank.8 In 2011, more than 27 per cent of USAID’s overall funding was directed towards American IDCs with the value of the ten largest contracts totalling around US$ 3.19 billion (Norris, 2012). If Chemonics, one of the world’s biggest IDCs, were a country, it would have been the third-largest recipient of USAID funding in the world in 2011, behind only Afghanistan and Haiti (Norris, 2012). According to the Centre for Economic Policy Research, Chemonics received nearly US$ 40 million in US government contracts in 2001; by 2011 that had risen to nearly US$ 700 million (Centre for Economic Policy Research, 2011b). The company now claims to have carried out projects in nearly 150 countries, employing more than 4,500 people.11

In the fiscal year 2012, USAID continued its practice of awarding ‘the bulk of its contracts to for-profit groups’ (Piccio, 2013) with 61 per cent of the contracts awarded to for-profit firms. As of September 2012, nine of the top twenty recipients (referred to as ‘vendors’ and based on amounts obligated) of USAID money were IDCs; the rest included governments, inter-governmental bodies such as organs of the United Nations and the World Bank, and non-profit organizations.9 Data available for fiscal year 2014 indicate that at least five of the first ten among the ‘top 40 vendors’ were for-profit IDCs.10

The story from the UK is similar: as of September 2012, eleven out of the top twenty contractors (in terms of monetary value) of the UK Department for International Development (DfID) were IDCs.12 In the financial year 2011–12, DfID awarded 135 contracts, amounting to £489 million, to fifty-eight contractors; the top two contractors who won the most work (by value) were IDCs, namely Adam Smith International (£66.3 million) and Crown Agents (£62.2 million)13 (Tran, 2013). Between 12 May 2010 and 30 June 2011, the combined value of the top ten contracts awarded to IDCs by DfID was £233.7 million, won mostly by British firms but also some American and Australian companies (based on figures in Villarino, 2011). Further afield, a 2009 report by the Australian National Audit Office underlined that twenty of Australia’s largest IDCs ‘were together responsible for delivering 70% of Australia’s bilateral aid program expenditure’ (Australian National Audit Office, 2009‒10: 87).

Some of the largest IDCs are American and include firms such as Chemonics, the Louis Berger Group, Development Alternatives Inc., Abt Associates, and Creative Associates. Other major global IDCs include the UK’s Crown Agents, Adam Smith Institute and WYG Group; Australian firms like GRM International and Coffey; the German COPA Consultants; and the French firm SOFRECO. The largest clients of these IDCs tend to be bilateral aid agencies like USAID, DfID, AusAid, etc. as well as multilateral agencies such as the UN and its various organs, the European Commission, World Bank, the Regional Development Banks and governments. However, it is important to note that many IDCs also undertake work for the military and security establishments, especially those of the USA and UK. Moreover, while some IDCs (including Chemonics and Crown Agents) count development as their primary business, for many others (such as Coffey, Tetra Tech, DynCorp or Mott MacDonald) for-profit development contracting is just one of many business interests, which may include extractive industries, power generation, transport, management consultancy, banking, finance, advising governments on managing economic reform and privatization, and providing military and security-related services.

A GENEALOGY OF FOR-PROFIT DEVELOPMENT CONTRACTING

International for-profit development contracting has both older and more recent histories. While colonialism is a key point of reference for the former, the latter engages two take-off points. The first lies in the onset of privatization of social services delivery and social welfare administration in the 1970s, especially in the USA. The second lies in the parallel emergence of the international development and aid system, on the one hand, and large multinational corporate entities with extremely diversified business interests, including development, on the other. This section plots these connections through a brief overview of the origins of for-profit development contracting in the USA and by sketching the corporate histories of three IDCs. A more detailed account of the global development aid architecture is provided in the subsequent section.

The Neoliberal Ancestry: The American Story

The emergence of ‘purchase of service contracting’ (POSC) to deliver personal social services in the USA in the mid-1970s is an important milestone in the recent history of for-profit development contracting. The early phase saw the delivery of a wide range of ‘human services’ in areas such as child welfare, adoptions, support for the ageing, employment training, victim services and mental health being handed over to voluntary organizations (Kramer, 1994: 36). This was welcomed as a way to enhance efficiency, increase voluntarism and citizen participation and later even as a way to extend the fast-receding welfare state (ibid.; see also Chater, 2008).

Underlying this were the beginnings of the transformation of the welfare state from a ‘provider’ to an ‘enabler’, ‘whereby the funding and production of social services [were] administratively separated’ (Kramer, 1994: 33–4). A new managerialism, in the form of ‘new public management’, provided the rationale for the ‘adoption of private sector management techniques and practices… i.e., private sector solutions were sought for public sector problems’ (Larbi, 1999: 4). The underlying thrust towards deregulation and privatization, soon to be a defining feature of neoliberal governance, laid the foundations for the emergence of the ‘contracting state’ (Freeman, 2000: 155).

The stress on governance ‘via contractual devices’ (ibid.: 156), rather than through public institutions or negotiated political processes, steadily transformed contracted service delivery into a competitive market, moving quickly from a voluntary to a more professional and vendor-driven model. Between 1977 and 1997 the number of for-profit providers of individual and family services, job training, vocational rehabilitation, child day-care, and residential care in the USA increased by 202 per cent, while the number of non-profit providers of such services increased by 125 per cent (Frumkin, 2002: 4). In some sectors, such as nursing homes, non-profit providers were all but pushed out of the field (ibid.: 15–16). During the same period, the number of persons employed in for-profit human service providers increased by 273 per cent, twice the growth rate in non-profit establishments (ibid.: 5).

Some of today’s largest American IDCs trace their origins to this period, starting off either as contracted providers of social services, such as Creative Associates International and Abt Associates, or as executors of other public projects for the state, like the Louis Berger Group, which began with large public construction works contracts. Four inter-connected factors seem to have been critical in helping for-profit contractors gain over non-profits: (a) their ability to negotiate and handle increasingly large and complex contracting vehicles and modalities initiated by development agencies and the state; (b) the relative lack of strong normative constraints on for-profits that rendered them more amenable to aligning themselves with powerful interests, especially within state institutions; (c) the ever-expanding variety of means at their disposal to raise capital; and (d) a high value human resources and compensation policy (Frumkin, 2002).

Over the following years, the scale of international development — closely aligned to foreign policy and security interests in the Cold War — expanded considerably, especially after the establishment of USAID under the US State Department in 1961 and an independent ministry in the UK in 1964. The expansion meant that new markets opened for IDCs, whose expertise in rendering social services and executing development projects at home enabled them to stake their claim to do the same abroad. It is clear that in the post-World War II era of state-led developmentalism, the emergence of IDCs was also linked to the institutionalization of ‘knowledge hierarchies’ in development. These hierarchies, arguably still far from dismantled, had epistemic/ideological and institutional dimensions with ‘international’/Northern knowledge and institutions holding sway over ‘local’/Southern knowledge and institutions (Girvan, 2007: 16). Given that development knowledge was (and often still is) considered as essentially flowing from North to South, who better to guide and oversee these projects than experts and professionals from the global North? American IDCs such as Chemonics and the Futures Group, for example, started off with contracts from USAID (which still continues to be amongst their biggest clients) to undertake studies and design projects in Third World countries.

While the subsequent entrenchment of IDCs, American and others, in the global aid and development architecture is explored in detail in the next section there is one other aspect that merits noting here. The rise to prominence of IDCs in USA over the last two decades has to be seen alongside the continued chipping away of state institutions, in particular USAID. Between 1990 and 2008, USAID witnessed staff reductions of up to 40 per cent (Centre for Economic Policy Research, 2011c); even as its programmatic envelope expanded, its human resources shrank. Dunning (2013: 26) notes that this meant ‘[f]ewer and fewer people at USAID had the responsibility to oversee more and more money’. Inevitably the ‘implementation of programs… shifted from Agency employees to contractors and grantees’ (American Academy for Diplomacy and Stimson, 2008: 37) and IDCs were amongst those who benefitted the most, growing rapidly and, in the process, absorbing many former USAID employees.

Colonial Antecedents

Development contracting also has a colonial ancestry. The Dutch and British East India Companies were themselves mega-contractors which ran the imperial enterprise through a vast network of sub-contractors, focusing first on trade, commerce, shipping and military services but in the later years also on building public infrastructure. Contractors played a key role in building the imperial infrastructure in Africa, Asia and the Americas, and colonial rule gave rise to a large contracting business, especially in construction work, across Europe and in the colonies. For example, Italian and Swiss contractors were active in British-ruled Ghana and the Gold Coast (Laryea and Mensah, 2010). Indigenous contractors often specialized, at least initially, in supplying labour or natural resources for colonial public works (especially the railways), mines and plantations. They could ‘communicate with both the workers and the employers and frequently took advantage of asymmetric information’ (Roy, 2002: 126). Over time, however, given the expanding colonial public works, some of these indigenous contractors grew to become powerful and politically influential (Spodek, 2013).

The network of agents and intermediaries that emerged to manage company and colonial affairs, including raising finances in the imperial capitals, laid the foundation for one of the largest IDCs in the world today, the UK-based Crown Agents for Oversea Governments and Administration. Generally referred to as Crown Agents but once known as the Crown Agents for the Colonies, it traces its history back to agents ‘authorised to receive and account for British Treasury grants to the colonies’.14 From the mid-nineteenth century onwards Crown Agents was engaged in ‘building the empire’s infrastructure’, managing the construction of ports, railways, roads and bridges in addition to raising loan capital, engaging engineers and procuring and shipping necessary materials and machinery.15 Newly independent colonies and post-war reconstruction brought Crown Agents new business opportunities — as they do to so many IDCs today. In 1979, following a financial crisis precipitated largely by over-exposure of the company’s banking and financial services operations, Crown Agents needed to be ‘bailed out’, becoming, in the process, a statutory corporation.16 It eventually severed the cord by becoming a private limited company in 1997, wholly owned by a new holding company, the Crown Agents Foundation, whose membership now includes international development organizations, prominent NGOs, academic institutions and major companies.17 Crown Agents was DfiD’s second biggest contractor in 2011 with contracts totalling £43.2 million (Villarino, 2011) and also provides specialized banking and financial services.

Corporate Mutation and Expansion

A third strand to consider with respect to the recent history of IDCs is corporate portfolio expansion and diversification. As pointed out previously, development contracting is often just one of many businesses for a company. Not all IDCs began their corporate existence as development contractors. Some of today’s biggest IDCs emerged from within other businesses, which diversified their portfolios to venture into development contracting or made strategic acquisitions, gradually transforming themselves primarily into IDCs.

The corporate story of the Australian IDC, GRM International, one of the top contractors of AusAid and DfID, is a good example. It started off in 1965 as Gunn Rural Management, a consulting arm of Gunn Development Pty Ltd, a leader in the cattle and pastoral business in Australia until it was bought out in 1977 and renamed GRM International.18 Over the next two decades, it grew steadily, also acquiring agricultural companies in Sweden and the UK and a Dutch meat company (Crikey, 2010). In 1993, media-magnate Kerry Packer (of World Series Cricket fame) purchased the GRM group of companies, which in turn purchased the International Projects Division of Melbourne University Private. In fact, ‘until late 2009, GRM International also included Australian Rural Exports, one of Australia’s leading live cattle and agricultural commodities exporting companies’.19 The company’s management subsequently negotiated a buyout from Packer’s Consolidated Press Holdings and today is primarily in the business of international development. In 2011, GRM and the global health and development consulting firm, Futures Group, merged under a new holding company, Futures Global, although both IDCs continue to operate ‘on a semi-autonomous basis with distinct identities’ (GRM and Futures Group, 2011).

The corporate history of the employee-owned Mott Macdonald Group, one of the UK’s largest IDCs with over 14,000 employees worldwide, is also instructive.20 It was formed in 1989 with the merger of Mott, Hay & Anderson, in the transport engineering business since the late nineteenth century, with Sir M. MacDonald & Partners. The latter traces its history to 1921 and was founded by Sir Murdoch MacDonald, who worked as an Advisor to Egypt’s Ministry of Public Works on the development of the Aswan dam. From 1994 onwards, Mott Macdonald expanded through acquisitions or mergers of companies with a broad range of expertise, including power, telecommunications, cost consultancy and education, across the UK, USA, Canada and India. In 2003, HLSP (formerly known by its full name Health and Life Sciences Partnership), a provider of technical assistance, consulting and project management services in the health sector, merged with Mott Macdonald, significantly adding to its capacities. Through HLSP, Mott MacDonald now manages the DfID Human Development Resource Centre and the AusAID Health Resource Facility, which provides short-term technical advisory services in health and HIV-related areas.

Central to the growth of IDCs is their ability to leverage their integration into the global commercial architecture, which in turn shapes their institutional forms and structures, business practices, corporate goals, revenue models and capitalization strategies. IDCs are also plugged into global financial markets; many are publicly listed and traded while a number of them are employee owned. Many IDCs are also affiliates or subsidiaries of larger conglomerates with diverse global business interests. In other words, IDCs are very much rooted in the global corporate, financial and economic system which itself is so heavily implicated in the creation of disparities and underdevelopment.21 While this is consistent with their history of being products of the neoliberal turn in the advanced capitalist economies, a fuller explanation of the rise of IDCs calls for an examination of specific modalities and opportunity structures within the global aid and development regime that have further spurred their growth and consolidation.

THE INTERNATIONAL DEVELOPMENT ARCHITECTURE AND IDCs

The manner in which the growth of IDCs and the expansion of the international development aid regime have gone hand-in-hand is best understood in relation to specific practices within the international development cooperation and assistance regime. The orientation, structure and working practices of IDCs are hitched to the contractual modes, institutional arrangements, normative underpinnings and knowledge mechanisms characteristic of the international development regime. As such, the question is not how the international development regime benefits IDCs but rather how they are mutually constitutive. Four dimensions are particularly important in this regard: (a) large contracting vehicles and procurement modalities; (b) the politics of the market structure of development contracting; (c) the contract culture, vendorism and alignment of interests; and (d) porous institutional boundaries and shared circuitries of expert knowledge and influence.

Large Contracting Vehicles and Procurement Policies

According to the estimates of the Organization for Economic Cooperation and Development (OECD), the net disbursements of official development assistance (ODA) in 2012 stood at US$ 125,692 million, twice as much as in 1992 (OECD, 2011). The increasing volume of development assistance has also meant an increased flow of services and goods and, in turn, larger and more complex vehicles of procurement and modalities of implementation. Take, for example, high value mega procurement vehicles like USAID’s Indefinite Quantity Contracts (IQCs) or the Framework Agreements (FAs) of DfID and EuropeAid. These modalities are designed to enable these agencies to call on vendors (short-listed through a competitive bidding process) to supply goods and services at very short notice for a certain number of years. IQCs and FAs are instruments used when ‘above a specified minimum, the precise quantities of supplies or services’ required during the contract period can’t really be specified in advance.22

Typically IQCs are multi-year, multi-million-dollar arrangements that demand very high levels of institutional, logistical, financial and human resources capabilities. Such is their scale that even the largest IDCs often work with others as part of a consortium in bidding for these contracts. For example, Chemonics partnered with the Food Economy Group, Intana, Michigan State University and WebFirst for its US$ 100 million FEWS NET (Famine Early Warning System Network) IQC. Most large international non-profits do not possess the resources and capabilities to be effective competitors. Therefore it is not surprising that even though non-profits may be part of consortia bidding for these large contracts, they are often dominated by IDCs to the exclusion of smaller local organizations, especially non-profits.

It is generally believed that these mega-contracts help streamline procurement and quicken the contracting process. However, as even senior USAID officials have acknowledged, ‘local partners [smaller local organizations that also receive USAID grants] have had great difficulty working with USAID. Our larger multimillion dollar projects exceeded their capabilities and our burden of paperwork and red tape exceeded their patience’ (Over, 2010). A detailed analysis of USAID funding for rebuilding Haiti following the devastating earthquake in 2010 undertaken by the Haiti Justice Alliance using a series of Freedom of Information Act requests showed that the IQC mechanism focused on funding inputs and on enhanced countability of inputs rather than on accountability for outputs, and was not conducive to participation of local actors (Haiti Justice Alliance, 2011a).

Another related aid modality that has helped consolidate the role of IDCs is tied aid — aid that comes with conditions attached to it, often pertaining to procurement of goods or services — and allied procurement practices that favour firms from donor countries. A 2011 study of aid spending by Eurodad reveals that while the value of procurement made up 53 per cent of aid (in 2010), only 20 per cent of aid was effectively untied, thus enabling donor country firms to benefit disproportionately from these large and lucrative contracts (Ellmers, 2011: 15–17). The Eurodad report underlines, in particular, the complex procedures, restrictive eligibility criteria, and the size, scale and complexity of contracts that put Northern firms in a far better position to bid and win these contracts. An investigation by The Guardian in 2012 showed that despite the UK officially untying its aid in 2001, much of DfID’s money still went to UK companies: ‘Of the 117 major DfID contracts and procurement agreements (together worth nearly £750 million) published on the government’s contracts portal since January 2011, only nine include non-UK firms among the grantees’ and only one firm from a developing country won a full contract (Provost and Hughes, 2012). In the USA, the total funding to non-US based vendors, including other donors and partners not necessarily based in the recipient country, did not exceed US$ 2.3 billion from 2007 through 2011; during the same period the funding to US-based entities reached US$ 10.3 billion (Dunning, 2013: 11).

Notwithstanding their catchy slogans, the ‘development mission’ of IDCs is primarily profit-oriented. Hence it is in their interest to perpetuate practices and modalities of international development that are profitable, such as mega-procurement vehicles like IQCs and practices like tied aid, even if these are ethically questionable or counter-productive in terms of development outcomes. It should come as no surprise that IDCs with a vested interest in the continuation of the present development and aid architecture are at the forefront of opposing changes that may harm their interests (Norris, 2012). For example, faced with changes in procurement and contracting being advocated by Rajiv Shah, the new USAID Administrator, including increasing the resources transferred directly to local organizations and agencies in aid-receiving countries, America’s biggest IDCs came together to form a coalition, now called the Council of International Development Companies (CIDC), to protect their interests.23 Dunning (2013: 6) notes that while US non-profits ‘greeted the reforms lukewarmly, feeling that USAID’s local procurement efforts largely ignored the significant contributions of U.S.-based NGOs and their existing patterns of work with local counterparts… U.S. for-profit contractors mobilized quickly in an effort to roll back the reforms before they could begin’.

In fact, IDCs the world over have been quick to act to safeguard their interests in the light of procurement reforms, especially in relation to policies that stress untying aid and increased use of recipient country systems for managing it. Ashurst (2012) describes this as a ‘pincer movement’, in response to which ‘some of the largest private contractors have pursued acquisitions abroad’. This and other means of expanding their footprint in donor as well as aid-recipient countries, for example through representatives, is seen as helping IDCs maximize their exposure to aid delivery and adapt to and leverage changes in contracting regimes to their own advantage.

The Politics of the Market Structure of Development Contracting

Research into domestic public service contracting regimes, especially in regions like North America, Europe and Australia, has yielded a great deal of insight into the mutually constitutive nature of contracting decisions and the contracting market. Although this literature is too extensive to review here in detail, some key insights from it help situate the rise of IDCs in the context of the politics of the development contracting market structure.

Two distinct features mark the development-related contracting market. The first is that development contracting often involves ‘complex products’. Even apparently ‘simple products’, like building a road, can trigger unexpected scenarios, while interventions aimed at strengthening the rule of law or enhancing access to healthcare, for instance, present infinitely greater challenges. Invariably therefore ‘complex products tend to be bought with less specific contracts because their very complexity means that there are a large number of different scenarios and circumstances that could occur and it would be too expensive for the buyer and seller to spell them out in advance’ (Brown et al., 2009: 8). In fact this is precisely the logic that underlies contract vehicles like USAID’s IQCs or the FAs in Europe.

A second crucial feature is that development contracting is often highly asset specific: that is, it requires ‘knowledge, skills, and abilities that can only be acquired through on-the-job experience or highly specialized investments’ (Brown et al., 2006: 326).24 High levels of asset specificity present risks for vendors, especially because customized assets such as physical infrastructure or, in some cases, even technology, cannot be transferred to other uses or similar uses elsewhere without huge costs, if at all. However, to the extent that the asset specificity in development contracting is heavily focused on ‘knowledge, skills, and abilities’ that are increasingly considered transferable, large development contractors have a distinct advantage in the market. As Brown et al. note in their analysis of public service contracting, complex products involving high levels of asset-specific services ‘can dangerously privilege vendors that win the first contracts, thus constraining future competition’ (ibid.: 326).

The problem is further compounded by the fact that despite development indicators becoming ubiquitous, measuring the results of development interventions continues to pose significant challenges. The combination of a complex product with high levels of asset specificity, coupled with difficulties in measuring outcomes, is not conducive to a competitive market structure (Brown et al., 2009: 10–11), especially for high value contracts such as IQCs and FAs. As noted above, the IDC market place is characterized by a complex grid of competition and collaboration with firms sub-contracting each other or bidding collectively in consortia even while competing on other bids. Thus, even as IDCs have expanded successfully by leveraging various modalities to consolidate themselves, development agencies have come under pressure to shrink and become leaner.25 This has ensured that the asymmetries in information and capacities have shifted more markedly in favour of IDCs, further strengthening their foothold in the international development regime.

Moreover, it is important to underline that the high level of interactions fostered between managers in IDCs and development agencies by contracting regimes are themselves important conduits of policy influence. Kelleher and Yackee (2008: 584) emphasize how, in addition to ‘reporting of activities, outputs, and outcomes’, contractors ‘also share policy-specific feedback with agency officials — for example, suggestions for budgetary changes or proposals for shifts in regulatory burdens’ which may further ‘their political preferences because they have a high stake in agency decision making’. Their study of the influence of organized interests on public agency decision making finds ‘that as government contracting increases, so too does perceived interest group influence on key agency decision-making’ (ibid.: 594).

The Contract Culture, Vendorism and Alignment of Interests

Contract-based relationships, by definition, imply that the contractor’s primary responsibility is to deliver whatever the client wants done as economically, efficiently and effectively as possible. But such arrangements are not neutral in their impacts and participating in contracting regimes ‘changes the practices, relationships and dependencies of contractors in fundamental ways’ (Sidoti et al., 2009: 9). In general, development contracting, whether involving for- or non-profits, has led to ‘tighter, more explicit and more rigorous criteria for funding’ (Chater, 2008: 8). Discourses such as ‘aid effectiveness’ have served to further increase the focus on the management and audit dimensions of international development cooperation (Hyndman, 2009). This has also entailed, among other things, a focus on precise and often narrow definitions of goals, design and implementation processes, and (most important of all) results, rendering aid a techno-administrative matter (Gulrajani, 2011). This is an approach that sits comfortably with for-profit development contracting because IDCs, far from asserting their autonomy, actually pride themselves on their ability to deliver standardized and contract-conforming services. For instance, the CIDC counts as a positive value that IDCs ‘are subject to the government’s direct instruction and control’.26

A 2011 study of 457 completed international development contracts issued by DfID, including 1,222 bids that were made for these contracts, found that the greater the weight assigned in evaluating the bids to adherence to the terms of reference, and the more detailed and precise the ex-ante description of terms of reference — i.e. the less open a project design is to the possibility of change — the more likely it was that for-profits (IDCs) would secure the contract (Huysentruyt, 2011: 15). In fact, the study found that non-profits were less likely to even bid for such projects even though, in general, they were found to offer higher non-contractible quality and significantly lower costs (ibid.: 16).27 Hence, the more the contract environment tends towards narrower and tighter criteria, the more it will benefit IDCs.

Notwithstanding the many serious and pertinent questions concerning the autonomy of NGOs in a donor–grantee relationship, the purchaser–vendor relationship of IDCs offers a radically different model, one in which autonomy itself is redefined so that it lies within the framework of total alignment with client interests. As the US-based CIDC stresses on its website, IDCs strive for ‘development results in support of US national security, economic, and humanitarian goals overseas’ (emphasis in the original).28 Moreover, it also notes that CIDC members are committed to ‘maximizing competition in the execution of work performed using US tax dollars. Building competitive free markets… Exporting American values’ (ibid.). This signals the depth of corporate complicity of IDCs in promoting the particular political and economic interests of their key clients, in this case the US government.

Engineering outcomes that consolidate the broad range of economic, political or security agendas of principals who award lucrative contracts is hardwired into the mission of IDCs because international for-profit development contracting is an outcome of, rather than a response to, a highly iniquitous and distorted political economy of international development. Consider the example of Chemonics and its recent history in Haiti. ERLY Industries Inc., the parent company of Chemonics until 1999,29 also owned American Rice, a company that benefitted greatly from the USA forcing Haiti to dismantle its rice tariffs in the mid-1980s.30 This, as former US President Bill Clinton himself came to admit, led to a virtual collapse of Haiti’s agriculture31 and contributed to food insecurity. Chemonics subsequently secured a lucrative multi-million-dollar contract from USAID to monitor food security in Haiti as part of the Famine Early Warning Systems (FEWS) through an IQC (Bell and Field, 2010; Dearing, 2010).

Chemonics also holds a US$ 126 million USAID contract (2009–2014) for its Watershed Initiative for National Natural Environmental Resources, which took up, amongst other things, the task of distributing Monsanto’s donation of nearly 500 tons of hybrid corn and other vegetable seeds throughout Haiti following the 2010 earthquake (Bell and Field, 2010; see also Haiti Justice Alliance, 2011b). There were protests against this move not only because some of the seeds were reportedly coated with unsuitable or harmful chemicals (Bell, 2010), but also because the donation was considered ‘a Trojan horse, with Monsanto seeking to gain a foothold in the Haitian market’ (Bell and Field, 2010). However, a 2011 investigation by Haiti Grassroots Watch revealed that distribution had indeed taken place raising serious concerns about safety and sustainability (Haiti Grassroots Watch, 2011; see also Bell, 2011). Riding on opportunities prised open by the US government meant that American Rice, Chemonics, and possibly Monsanto, became well placed to grab a share of lucrative revenues from trade with or aid to Haiti, neither of which actually privilege Haitian development interests.

Given the long history of linking development and military/security agendas — discussed at length below — it should come as no surprise that IDCs have also served as conduits to advance strategic and military interests. For instance, according to a 2008 memorandum (based on declassified documents) of the UK-based Campaign Against Arms Trade to the UK Committees on Arms Export Controls,32 illegal payments associated with arms sales in the Middle East may have been channelled through ‘Millbank Technical Services (MTS), a subsidiary of Crown Agents, which, at the time, was frequently used by the DSO [Defence & Security Organization] to sell arms on its behalf’ (Campaign Against Arms Trade, 2008; UK Parliament, 2008).

Several large IDCs from the USA and UK, as well as other countries, are active, often with their military establishments as clients, in a range of conflict theatres. As discussed further below, beyond specific projects carried out by IDCs that further strategic geopolitical and military agendas, their ability to mesh together development and military contracting has created a new level of alignment between development and military agendas, in turn further consolidating for-profit development contracting.

Circuits of Knowledge and Power

The embedding of IDCs into the international development regime is greatly facilitated by the highly porous nature of the boundary between IDCs and their principals, especially the development agencies. Thanks largely to their financial strength, IDCs can harvest a vast array of ‘independent’ consultants as well as staff from governments and development agencies, universities, research centres, the UN and even international and national NGOs. These experts are, in a sense, the building blocks of an ever-expanding circuitry of knowledge and influence. IDCs in the USA are staffed heavily with former USAID officials (Centre for Economic Policy Research, 2011b). Just to take one example, Chemonics, whose biggest client for years has been USAID, was founded by a former State Department officer. Scott Spangler, once the company’s principal owner, held several senior positions in USAID during the first Bush administration, even serving as its Acting Administrator (Center for Public Integrity, 2003). The situation in the UK is no different. A recent investigation by The Telegraph into UK-based IDCs revealed that many of ‘the best-paid consultants are former DfID officials who appear to have gained substantial increases in their personal wealth since leaving the department, even though they are still doing essentially the same work’ (Gilligan, 2012). It is estimated that DfID spent around £500 million on consultants in 2011 (Provost and Hughes, 2012).

What makes this ‘revolving door’ critical to IDCs is not just the circulation of knowledge and ideas but also the possibility of expanding spheres of influence, across state and non-state actors, that it brings. According to the Center for Public Integrity (2003), nearly 60 per cent of the companies that won contracts awarded by the Pentagon, the US State Department and USAID in Iraq and Afghanistan in 2002 and 2003, had ‘employees or board members who either served in or had close ties to the executive branch of Republican and Democratic administrations, members of Congress of both parties, or at the highest levels of the military’. In 2011, the UK IDC Crown Agents appointed a chief executive whose previous positions included sixteen years with the UK Ministry of Defence, including as political advisor to the NATO commander in Kabul, as well as working in companies like Shell, American Express, Burma Oil and Unigate.33 The convergence of high-level political, military and corporate backgrounds is ideal for IDCs that are positioning themselves at the cutting edge of both the development and security agendas.

The ‘revolving door’ is also salient because it helps generate what DiMaggio and Powell (1983: 152) call ‘normative isomorphism’, at the heart of which is a ‘pool of almost interchangeable individuals’, who by virtue of the similar positions they occupy across a range of institutions, coupled with similarities ‘of orientation and disposition’, shape organizational behaviour. This community of experts, ‘independent consultants’ in particular, plays a central role in the transfer and diffusion of specialist knowledge across institutional and geographical boundaries, in areas ranging from development to rule of law and peace building to security and counter-terrorism. Their emphasis, in moving from project to project, is on providing a compelling account of how certain measures can be packaged as ‘best practices’ or ‘shared solutions’. Thus, ‘undifferentiated “development” expertise… free-floating and untied to any specific context,… is so easily generalized, and so easily inserted into any given situation’ (Ferguson, 2006: 275).

The globalization of management specialists, whose skills in realizing economy, efficiency and effectiveness are considered universally transferable and applicable in virtually any institutional, policy or social context, is another key element of this picture. In fact, global management-consulting firms like KPMG and Price Waterhouse Coopers are also amongst the significant contractors for aid agencies. IDCs thrive on this epistemic community that helps normalize ‘particular practices and relations’ and whose members ‘share assumptions and reinforce, normalise and reify each other’s views, [and] form a structural dynamic within the relations of consultant to client — a complex system from which emerges a set of “truths”’ (Davis, 2009: 8–9), enabling a constant reproduction of legitimacy. These professional interactions and networks in fact shape the organizational cultures in development agencies, especially contracting decisions. For example, in their study of contracting decisions by city managers in the USA, Brown and Potoski (2003: 464) note that participating ‘in professional networks shapes production choices by creating institutional pressures to pursue certain production mechanisms over others’.

In conclusion, specific modalities of international development, the politics of contract market place and particular institutional cultures have combined to profoundly reshape the organizational ecology of international development in favour of IDCs. The size, growth and influence of IDCs today is a vindication of Frumkin’s insight that ultimately the contracting decision making itself shapes the ‘landscape of providers that is likely to emerge’ (Frumkin, 2002: 13). The production and legitimation of certain modes and practices of contracting has placed IDCs firmly at the heart of the international development regime. While IDCs may not be the primary architects of development vendorism, they are its biggest beneficiaries. Development is what happens while IDCs make a profit, or, to put it another way, IDCs exist only because there are profits to be made from the international development regime.

Moreover, if the medium is the message, then there could not be a more effective way of exporting neoliberal, free-market values than doing development through for-profit firms. Far from being an abstracted technocracy purveying politically neutral development expertise and skills — even if such a thing were ever possible — interventions by IDCs often reflect the preferences and biases of the dominant political and economic forces that sustain them. As Deborah Doane, Director of the World Development Movement, has observed with respect to the UK’s use of contractors (in Tran, 2013): ‘The use of certain consultants, such as Adam Smith International, inevitably predetermines the policies they implement overseas, from privatised water to privatised education.… We know that public services can actually provide better value in developing countries, but in some cases that choice is not being given’. However, given the transformation of the ‘aid sector into a sizable industrial complex [that] has privileged managerial values of efficiency and impartiality at the expense of civic orientations and moral purposes’ (Gulrajani, 2011: 212), such consequences are inevitable.

The moral economy of for-profit development vendorism is further circumscribed in two important ways. Firstly, by definition, in the contract-governed culture the wider motivations, actions or identities of the contracting parties are easily rendered irrelevant unless otherwise specified as salient. Secondly, other than narrow statutory and customary corporate obligations, for-profit development, as a business, does not need to be concerned with the ethical orientations of its principals. Taken together, these two factors help loosen the normative constraints associated with clients choosing contractors and vice versa, or development contracting being aligned organizationally with any other business. IDCs can work with NGOs just as easily as they can work with military establishments while their portfolios can include development alongside extractive industries, managing privatization and deregulation of key public sectors or supporting the conduct of wars. In the age of the ‘war on terror’ and humanitarian military interventionism, IDCs are reaping the benefits of enabling the harmonization of their clients’ economic, political and military ambitions, paving the way for the rise of the military-development assemblage, to which we must now turn our attention.

THE MILITARY-DEVELOPMENT ASSEMBLAGE

Security and Development: The Blurring of Lines

In his 1941 State of the Union address, US President Franklin D. Roosevelt spelt out the freedoms from want and fear, along with the freedoms of expression and worship, as a ‘definite basis’ for a new world order. His weaving together of ‘want’ and ‘fear’, which continues to find resonance today,34 was an important step towards coupling development and security, especially in the field of international cooperation and inter-state relations.

Just under two decades later, in January 1961, President Eisenhower called for a ‘proper meshing of the huge industrial and military machinery’ with America’s ‘peaceful methods and goals’, warning otherwise of the acquisition of ‘unwarranted influence, whether sought or unsought, by the military industrial complex’.35 Heeding his predecessor’s call, President Kennedy drafted Robert McNamara, the first non-Ford family president of the Ford Motor Company, as his Secretary of Defense. Eight years later, in the midst of the Vietnam War, McNamara took charge of the World Bank and a decade later presided over the introduction of the Structural Adjustment Programme.

If McNamara embodied the ‘meshing’ of the military-industrial complex with international development, his belief that ‘there was a direct link between concerns about military security and economic development’36 was buttressed by Cold War geopolitics that viewed development assistance as ‘a security technology’ (Sörensen, 2012). Aid was consistently channelled to countries of strategic interest rather than the most deserving (Pupavac, 2010). However, the collapse of the Soviet Union provided the impetus for a further major redefinition of both development and security. The former was recast first, as ‘human development’, most significantly in the UN’s first Human Development Report in 1990. The latter was soon thereafter reframed as ‘human security’, also reflected in the 1994 UN Human Development Report. As the very formulations suggest, the focus of these new formulations on development and security is the human rather than the state.

The emphasis on the human in the post-Cold War era marks the legitimation of internal (rather than external) threats to security and the ‘discovery’ of internal war and conflict as major threats to individual and societal well-being (Duffield, 2006). As the Development Assistance Committee (DAC) of the OECD underlined in 2001: ‘The concept of security has shifted away from a fundamentally military focus on protecting territory and sovereignty with strength of national defence forces. As a consequence, discussions of security issues, “systems” and actors have become comprehensive and no longer refer to military systems only’ (DAC-OECD, 2001: 37). It was in this context that the OECD’s call for a ‘development cooperation lens on terrorism prevention’ assumed significance. Central to this was a call to reconstruct the security-development assemblage by joining up allies, including ‘financial analysts, bankers, arms control and bio-chemical experts, educators, communications specialists, development planners and religious leaders’ (OECD, 2003: 10). This joining up is also echoed in the integration of ‘humanitarian and development work with that of peacekeeping and political affairs’ (Eide et al., 2005, in Duffield, 2012: 22), which gained ground in the face of what the UN termed ‘complex emergencies’ that called for system-wide responses.

The idea of human security also marks the ‘biopolitical turn in international development’ (Duffield in Tschirhart, 2011). The biopolitical, in this case, acts in and through the profiling and sorting of populations into categories of risk, which are represented (and managed) in frames of First World security and Third World underdevelopment. Thus, according to the Canadian International Development Agency: ‘Canadians will benefit from a more prosperous, secure and equitable world. Conversely, the argument goes, Canadians will be less and less secure in a world characterized by poverty and unsustainable development’ (Hyndman, 2009: 875). This is not to imply that geopolitics is irrelevant; the emphasis on the biopolitical only underlines the expansion of the interventionist liberal agenda following the collapse of the Soviet Union (Sörensen, 2012). Moreover, underlying it are echoes of much older fears (e.g. Connelly, 2008) concerning the need to secure the (Northern/metropolitan) global order from the impact of burgeoning ‘underdeveloped’ and ‘unsecured’ (Southern/peripheral) populations.

However, it would be a mistake to hinge this intertwining of security and development entirely on the need to prevent the South from ‘leaking’ into the North, bringing with it demographic, biological, cultural and other hazards. An equally significant factor is the projection onto the international stage of the internal response to the ruptures and fissures as a result of expanding social insecurity and economic disparities within the global North itself, especially in the USA and UK. The neoliberal regulation of social insecurity and an ever-expanding precariat has been met with a punitive revamping of public policy, welding the ‘invisible hand’ of the market to the ‘iron fist’ of the penal state (Wacquant, 2009). The new regimes of policing, disciplining and pacifying, including workfare and prisonfare, are not only increasingly contracted out to corporations37 but are also being exported around the world.38

The weaving together of welfare and penality domestically, and development and security globally is also occurring in a context, dominated by the ‘war on terror’, in which there is a blurring of lines between the modes and technologies governing and securing metropolitan centres, on the one hand, and the disordered peripheries, on the other (Graham, 2010). Stephen Graham employs Foucault’s ‘boomerang effect’ to describe how the latter are proving to be laboratories for new security and disciplining technologies, which then travel back to the former to be integrated into development, especially in mega-cities and urban governance across the global North and South (Graham, 2013).

In 2008, Robert Zoellick, then President of the World Bank, called for ‘bringing security and development together’, noting, ‘military and development disciplines too often worked on separate paths’.39 This call for convergence is captured by what Derek Gregory terms the cultural turn in war, signalled, among other things, by the rise of ‘conflict ethnography’ to inform population-centric counter-terrorism (Gregory, 2008). Lessons from the ‘war on terror’ and allied ‘humanitarian interventions’ also reshaped approaches to war. If ‘poverty, ignorance and manipulation by malcontents provoked insurgency’, then counterinsurgency is best treated as ‘armed social work’, as ‘intrinsically therapeutic’ (ibid.: 21, 40). Simulated missions (tropes that are reproduced in video games and Hollywood cinema) like rebuilding a girls’ school or moving a medical clinic, reinforce this image of counterinsurgency (ibid.: 40).

Thus, over the past two decades — but post-2001 in particular — the conceptual boundaries between development and security have been steadily erased, primarily by expanding their respective meanings to such an extent that, ‘emptied of their traditional content’, it is now near impossible to distinguish between them (Chandler, 2009: 34). The increasing interlocking of development and security has created significant new spaces for development actors, particularly in the context of conflicts and complex emergencies. Inevitably, however, it has also resulted in the roles of development and security actors being viewed as complementary or overlapping. This blurring of identities between military and aid actors, as Duffield notes, ‘is more than the former handing out humanitarian assistance or electric generators; it’s about the military taking over technologies of governance that were themselves pioneered by NGOs’ (Duffield in Tschirhart, 2011: 4).

Towards a Market-led Development-Security Assemblage

IDCs have not only been quick to grasp the significance of the changing landscape of the development-security relationship for their business. They have been involved in shaping this landscape. For instance, several of IDCs mentioned in this article have followed American/British troops into Afghanistan, Iraq and Pakistan, NATO forces into the former Yugoslavia or Australian troops into the Solomon Islands,40 and were or still are engaged in stabilization operations in relation to various aspects of state building or post-conflict reconstruction in these countries.

Even those projects undertaken by IDCs outside these major theatres of operation are not free of interests that seek to harmonize development needs of a beneficiary with the military and security considerations of their clients. Take for example, a USAID project carried out by Chemonics in Kazakhstan and Uzbekistan to build capacity to facilitate trade and uphold international trade agreements.41 The project, according to Chemonics, aims to enhance cross-border trade between central Asian countries and Afghanistan through an array of trade facilitation activities. However, a closer reading reveals that the ‘project will also evaluate the export potential and business constraints in central Asia, particularly for fresh and processed agricultural products and other sectors of interest to the U.S. Department of Defense for supply to Afghanistan’.42

Other IDCs have effectively integrated military and development contracting, building capacities in both. For example, the WYG Group combines ‘seven core market areas’: Defence & Justice; Energy & Waste; Environment (including water and waste water); Transport; Mining, Metals & Minerals; Urban & Commercial Development; and Social Development & Infrastructure.43 Private military firms (PMFs), already well integrated into the global military architecture, have been quick to see the gains from expanding their portfolios to include development. While the rise of PMFs is well documented and the idea of private militaries goes back a long way in history, contemporary PMFs are businesses with unprecedented organizational and financial structures and operational capabilities. As Singer observed, their ‘[c]orporatization not only distinguishes PMFs from mercenaries and other past private military ventures, but it also offers certain advantages in both efficiency and effectiveness’ (Singer, 2001/02: 191).

Many major PMFs are leveraging these advantages to effectively reinvent themselves and to further blur the boundaries between development and security. They have expanded their portfolios to include international development through outright acquisition of IDCs:

  • In 2007, Tetra Tech, ‘one of the largest contractors’44 at the US Missile Defense Agency headquarters, acquired ARD Inc., an IDC that secures large international development contracts from USAID and other agencies for rural development, justice sector reforms, strengthening local government, coastal resources management, etc. in different parts of the world. In 2011 alone, this helped Tetra Tech to secure US$ 400 million worth of contracts from USAID for work related to climate change mitigation, forestry management, water and sanitation services in Africa, Indonesia, Mexico and Afghanistan. Tetra Tech’s total revenues in 2011 amounted to US$ 2.6 billion.45
  • L-3 Communications, ‘a prime contractor in aircraft modernization and maintenance, C3ISR [Command, Control, Communications, Intelligence, Surveillance and Reconnaissance] systems’ acquired the IDC, International Resources Group (IRG) in 2008.46 IRG specializes in providing ‘management, policy and training support to U.S. government agencies and international development organizations in the areas of energy, environment and natural resource management, relief and reconstruction, and economic development’.47
  • In 2010 DynCorp Inc., an American company whose portfolio includes Air Operations, Aviation, Contingency Operations, Development, Intelligence Training & Solutions, Security Services, and Training, announced the completion of its acquisition of Casals and Associates (Inc.), a well-known IDC.48 As of 30 December 2011, DynCorp employed or managed approximately 29,000 personnel with operations in thirty-six countries, with revenues for 2011 totalling almost US$ 3.7 billion.49
  • In July 2014, AECOM announced that the Madrid-based ACE International Consultants S.L. had joined its international development business. ACE International is a consulting firm specializing in economic and social development cooperation and private sector development whose clients include EuropeAid, the World Bank and the Inter-American Development Bank; it ‘has approximately 80 employees who leverage their working relationships with a global network of roughly 8,000 experts in nearly 140 countries to advance clients’ programs’.50 AECOM is a US$ 8-billion global engineering and construction services company with interests in the transportation, energy, mining and facilities sectors. It is also engaged in providing a wide-range of support to US military establishments at home and abroad in logistics,51 intelligence,52 mission support,53 security screening, etc.

General (retd.) Carl E. Vuono, President of L-3’s Services Group, noted at the time the group acquired the development contractor IRG: ‘Together we will now be able to offer government agencies, international organizations and foreign nations comprehensive solutions to the most complex requirements of development, institutional capacity building and stability operations’, allowing ‘L-3 to diversify and expand its service capabilities and penetrate new markets both internationally and domestically’.54 DynCorp International’s acquisition of Casals and Associates was similarly motivated by a corporate vision to achieve a ‘combination of competencies to provide services supporting U.S. defense, diplomacy and international development’.55

During the Cold War, the logics of security and development were linked in a strategic sense but in the age of ‘humanitarian interventions’, when destroyers reappear as re-constructors, the logic of war has dissolved into the logic of development in a ballistic sense i.e., ‘armed social work’. It is no surprise that military and development contracting should converge and that skills and expertise are considered transferable from one to the other, albeit with some minor adjustments. After all, both war and development are not only increasingly conducted within a similar framework — as joint ventures between the corporate state and global capital — but are also near indistinguishable.

Tracing the emergence of ‘soldier-scholars’ and the rise of population-centric counter-insurgency, Laleh Khalili (2010) notes that today ‘the prophets of counterinsurgency concentrate on everyday, commonsensical tasks in pursuit of unobjectionable goals such as “stability,” “development,” “nation-building” and “democracy”’. But all of this ‘demands a panoply of disciplinary capacities’ and drawing from David Kilcullen, a soldier-scholar, Khalili lists cultural and ethnographic intelligence, social systems analysis, early-entry or high-threat humanitarian or governance teams, field negotiation and mediation teams, as being amongst these ‘strategically useful capabilities’. In fact, it is these very ‘strategic capabilities’, which IDCs readily provide, that form the fulcrum of the convergence between for-profit development and military contracting.

This convergence paved the way for the emergence of a market-led military-development assemblage, at the heart of which is the ‘military-development corporation’ profiting equally from making war, talking peace, engaging in post-war reconstruction and doing development. ‘Market-led’ signals not only the pre-dominance of privatization, competitive vendorism, and managerialism in shaping the assemblage but also the direction and nature of state involvement and engagement, as a facilitator and enabler rather than being totally absent or distant. ‘Assemblage’, following Foucault and Deleuze, signals intersections of the epistemic and the ideological on the one hand and concrete practices and institutional modalities on the other (Legg, 2011). The idea of an assemblage implies a more open and relational arrangement than, for example, the idea of a security-development ‘nexus’, which implies universality, coordination and coherence. Assemblage accommodates a multiplicity of bodies, heterogeneous but with strong affinities, and relationships that are fluid and contextual, shaped by space-time, and capable of being simultaneously competitive and collaborative (ibid.).

Rather than a stable complex, the military-development assemblage is best understood as a polymorphous matrix of segments of military and development units, which can rearrange themselves according to the demands of the mission and circumstance, often bearing a close relationship with the state.56 It is reproduced through (a) a dense web of diverse actors — governmental, intergovernmental and non-governmental, for- and non-profits as well as individual experts; (b) an array of institutional arrangements and modalities — from contracting vehicles to procurement policies to consortia of bidders and other formal and less formal inter-relationships; and (c) an epistemic community of experts spanning diverse institutional locations to ensure the diffusion, circulation and reproduction of specific kinds of self-legitimizing expertise and knowledge.

It is crucial to note that the military-development convergence also has significant ideological effects. Bringing development and counter-insurgency or war under a ‘unified command’ structure simultaneously elevates and militarizes the former. It also enables those engaged in the latter to perform ‘for local and international audiences, presenting a “unified narrative”’ that can then be ‘deployed’ to engage communities and NGOs ‘through targeted social and economic programs’ (Kilcullen in Khalili, 2010). IDCs, with their ‘dual purpose’ orientation and capabilities, are a crucial part of the strategic assets needed for such integrated missions. As Khalili emphasizes, the ‘humanitarian style of military intervention’, seemingly progressive, actually serves to obscure ideologies of domination. Moreover, the discursive thrust of this intervention is based on reconstructing conflict itself; there is ‘no power ascribed to memory, history or ideals of justice, except in so far as one side or another can use these things instrumentally’ (Khalili, 2010).

CONCLUSION

For-profit development and private military contractors alike have reaped a windfall from the slicing up of the broader, transformative goals of development into discrete projects and narrow results, which are easier to manage and align with specific interests. Underlying this is an ever-increasing focus on the management and audit dimensions of international development that disguise the larger failure to grapple with the challenge of increasingly unstable political aims of international development and a ‘disavowal of external or international responsibilities’ (Chandler, 2009: 31). At the same time, the steady seepage of security into development has left both agendas riddled with ‘serious tensions and inconsistencies’ (Tschirgi, 2005: 10).

A market-led process has outpaced not only normatively grounded policy deliberations but also political critique, theoretical contestation and debates on the linkages between development and security. In fact, it has already created the institutional apparatus and mechanisms to receive, process and reshape policy shifts and engineer the kind of coherence that will continue to safeguard the interests of large IDCs and military-development corporations. Thus, while changes in contracting or procurement policies may appear like a significant reconfiguration, it is more likely than not that private development and military contractors are already well placed to adapt to and profit from them.

Challenging and dismantling the military-development assemblage and loosening the grip of IDCs on the modalities of international development is crucial to reclaiming the latter as a site of contested values, meanings and goals. However, this will demand significant epistemic, ideological and institutional shifts, key to which is moving away from a focus on ideas of ‘effectiveness’ or ‘accountability’ based on a narrow, formal consequentialist ethics towards solidarities and responsibilities informed by deeper, substantive ethical and political concerns. Central to this is interrogating the normative foundations of the cultures of development contracting, both for- and non-profit, and holding the light to the political economy of the ‘development business’ and its effects, especially how it buttresses ideological, political, institutional and epistemic configurations of dominance.

  1. 1

    In the sci-fi series Star Trek, the Ferengi are a race that worship the ideals of free enterprise guided by the Rules of Acquisition; the pursuit of profit is considered the supreme duty of every Ferengi.

  2. 2

    Understood here to mean development work or projects undertaken by for-profit companies on behalf of bilateral or multilateral donors and aid agencies.

  3. 3

    See, for example, reports of the Center for Public Integrity, particularly with respect to Iraq (e.g. Center for Public Integrity, 2003).

  4. 4

    See, for example, Easterly and Freschi (2012); Gilligan (2012).

  5. 5

    See ‘Winning Contractors’ http://www.publicintegrity.org/national-security/windfalls-war (accessed 15 January 2015).

  6. 6

    See for instance Brown and Potoski (2003); Brown et al. (2006, 2009); Chater (2008); Frumkin (2002); Huysentruyt (2011); Kelleher and Yackee (2008); Kramer (1994); Sidoti et al. (2009).

  7. 7

    ‘International Development Contractors’ (IDCs) is preferred over ‘International Development Companies’ because it includes (a) firms whose core or only business is not development and (b) firms traditionally only in the business of development which are now diversifying into other areas. It is therefore more inclusive and accurate.

  8. 8

    Figures from ‘USAID Top Vendors – Contractors and Grantees – FY 2011’ on the website www.developmentwork.net, available at http://tinyurl.com/pxqyyud (accessed 25 May 2013).

  9. 9

    Figures from ‘Top 40 Vendors’ on the USAID website, http://www.usaid.gov/results-and-data/budget-spending/top-40-vendors (accessed 6 February 2013).

  10. 10
  11. 11

    See www.chemonics.com (accessed 7 December 2012).

  12. 12

    This is based on information sourced by The Guardian from the UK Contracts Finder website; see Provost and Hughes (2012).

  13. 13

    The following three (by value) were Voluntary Services Overseas (£54.6 million), British Council (£32.4 million) and another IDC, Maxwell Stamp (£26.1 million) (Tran, 2013).

  14. 14

    See ‘History Timeline’ at http://www.crownagents.com/Modules/Timeline/Default.aspx?contentID=1702 (accessed 8 February 2013).

  15. 15

    See ‘1869’ in the History Timeline for the period 1836–1870 at http://www.crownagents.com/about-us/our-history (accessed 24 January 2014).

  16. 16

    It was ‘reporting to and monitored by the Minister for Overseas Development (as the title was then) acting on behalf of Britain’s Foreign Secretary, who also appointed its board of directors’; see http://www.crownagents.com/about-us/our-history (accessed 24 January 2014).

  17. 17
  18. 18

    See http://www.grminternational.com/about/our_history (accessed 5 December 2012).

  19. 19
  20. 20

    This paragraph is based on information from two websites: http://www.mottmac.com/aboutmottmac/ourheritage/ and http://www.hlsp.org/Home/Aboutus/Whatwedo.aspx (both accessed 26 May 2013).

  21. 21

    See Thabo Mbeki’s address to the G20 Finance Ministerial Conference on 18 November 2007: ‘A general consensus is also emerging that the structural fault in the global economy, which ensures growing disparities between the rich and the poor as well as deepening levels of poverty and underdevelopment…’ (The Presidency, Republic of South Africa, 2007).

  22. 22

    For a detailed description see Indefinite Delivery, Indefinite Quantity Contracts on the website http://www.gsa.gov/portal/content/103926 (accessed 7 December 2012).

  23. 23

    Shah’s remarks that USAID ‘is no longer satisfied with writing big checks to big contractors and calling it development’ (in Easterly and Freschi, 2012) alarmed the for-profit development contracting industry. The CIDC reportedly hired the high-profile lobbying firm Podesta Group, which is ‘promoting the work of international development companies’ in the US Congress (Easterly and Freschi, 2012).

  24. 24

    Asset specificity also includes distinct physical infrastructure and technology.

  25. 25

    Dunning (2013: 26) cites the US HELP Commission as noting in 2007 that USAID’s staffing levels had shrunk from 3,163 in 1992 to 2,040 in 2006, while its programme funding had increased from US$ 7.68 billion in 1996 to US$ 10.66 billion in 2006.

  26. 26

    See the CIDC website http://americaningenuityabroad.org/did-you-know/ (accessed 21 March 2014).

  27. 27

    Even though contracting to for-profits ‘implies greater government control over project design’ it comes at the ‘expense of non-contractible quality and substantial ex post renegotiation costs’ (Huysentruyt, 2011: 16).

  28. 28

    From the website section ‘Did You Know? The Role and Impact of International Development Companies in Meeting US Foreign Aid Goals’; http://www.cidc.us/did-you-know/ (accessed 21 March 2014).

  29. 29

    From the Chemonics website, ‘Chemonics International is Sold to Private Investors’, http://www.chemonics.com/OurStory/OurNews/Pages/Chemonics-International-is-sold-to-private-investors.aspx (accessed 21 March 2014).

  30. 30

    By the mid-1990s, ERLY/American Rice was importing some 40 to 50 per cent of all rice eaten in Haiti. For more on this, see Bell and Field (2010); Haiti Justice Alliance (2011b); McGowan (1997).

  31. 31

    Bill Clinton acknowledged this at a US Senate Foreign Relations Committee hearing in 2011. See http://www.democracynow.org/2011/7/14/dr_paul_farmer_on_bill_clintons (accessed 16 February 2013).

  32. 32

    A body of four UK Parliamentary Committees that monitors arms exports controls.

  33. 33

    From the Crown Agents website, ‘Crown Agents announces new chief executive’, 3 March 2011, http://www.crownagents.com/crown-agents-announces-new-chief-executive.aspx (accessed 4 December 2012). See also: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHp9wwnv4HIg (accessed 15 January 2014).

  34. 34

    See, for instance, ‘Freedom from fear and want, a sustainable development imperative’ at http://www.ohchr.org/EN/NewsEvents/Pages/Freedomfearandwantasustainabledevelopment.aspx (accessed 26 March 2014).

  35. 35
  36. 36

    See World Bank Archives online ‘Robert Strange McNamara’ at http://go.worldbank.org/44V9497H50 (accessed 19 September 2014).

  37. 37

    Examples include the privatization of prison services in USA to providers like Wackenhut and social welfare eligibility assessments in the UK to Atos; for a critical assessment of the latter see http://atosstories.blogspot.co.uk/2013/03/esa-end-game_19.html

  38. 38

    A good example is the global diffusion of so-called ‘zero-tolerance policing’, which rejects social correlates of crime and focuses instead on assertive law enforcement.

  39. 39

    See World Bank, World Development Report, Press Release, 11 April 2011, http://go.worldbank.org/QLKJWJB8x0 (accessed 7 February 2013).

  40. 40

    On Australian IDCs in the Solomons, see Crikey (2010); Head (2004).

  41. 41

    The project is a task order under the USAID/Central Asian Republic’s Macroeconomic Foundations for Growth indefinite quantity contract. See the website: http://www.chemonics.com/OurWork/OurProjects/Pages/Regional-Economic-Integration-Activity.aspx (accessed 15 February 2013).

  42. 42

    Ibid.

  43. 43

    From the WYG International Annual Report 2012, p. 7.

  44. 44

    Tetra-Tech is ‘working with MDA and the Pacific Range Support Team in support of the testing of BMDS [Ballistic Missile Defense System] systems’. See http://www.tetratech.com/projects/technical-support-for-ballistic-missile-defense-system.html (accessed 29 November 2012).

  45. 45

    Tetra Tech, Annual Report 2011.

  46. 46

    Press Release, ‘L-3 Acquires International Resources Group Ltd.’, New York, 5 December 2008, http://www.l-3com.com/media-center/press-releases.html?pr_id=1233087&year=2008 (accessed 26 March 2014).

  47. 47

    Ibid.

  48. 48

    DynCorp International Acquires Casals & Associates, Press Release, 25 January 2010, http://ir.dyn-intl.com/releasedetail.cfm?ReleaseID=439654 (accessed 5 December 2012).

  49. 49

    Delta Tucker Holdings, Inc., Form 10-K (Annual Report), Filed 04/09/12 For The Period Ending 12/30/11.

  50. 50

    Press Release, ‘ACE International Consultants S.L. joins AECOM’s international development business’, 10 July 2014, http://www.aecom.com/News/Press±Releases/_news/ACE±International±Consultants±S.L.±joins±AECOM’s±international±development±business (accessed 19 September 2014).

  51. 51
  52. 52
  53. 53
  54. 54

    L-3 Press Release, ‘L-3 Acquires International Resources Group Ltd.’, New York, 5 December 2008, http://www.l-3com.com/media-center/press-releases.html?pr_id=1233087&year=2008 (accessed 26 May 2013). A further restructuring in 2012 saw the launch of Engility as an independent company ‘made up of leading businesses within L-3’s Government Services segments: including MPRI, Command & Control Systems and Software (C2S2), Global Security & Engineering Solutions (GS&ES), Linguist Operations & Technical Support (LOTS) and Engility Corporation and International Resources Group (IRG)’. See http://www.engilitycorp.com/about/history/ (accessed 19 September 2014).

  55. 55

    DynCorp Press Release, ‘DynCorp International Acquires Casals & Associates’, 25 January 2010, http://ir.dyn-intl.com/releasedetail.cfm?ReleaseID=439654 (accessed 5 December 2012).

  56. 56

    Based on the discussion of Deleuze and Guattari’s ‘war machine’ in Mbembe (2003). See also Deleuze and Guattari (2010).

REFERENCES

Biography

  • Vijay Kumar Nagaraj (vijayknagaraj@gmail.com) is currently affiliated to the Centre for Poverty Analysis (CEPA) in Colombo, Sri Lanka. He is also a member of the Collective for Economic Democratisation.

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