**Building Foundations for Cooperative Behavior\
Through U.S. Foreign Aid**

**Robert B. Hawkins, Jr.**

Why do crime levels decrease in a government housing project located in
one poor Indianapolis neighborhood but not in similar surrounding
neighborhoods? Why do Nepalese farmers in self-governing systems
consistently outperform their government-managed projects?[^1] Why have
Turkish fishermen been able to govern inshore fisheries for
two-hundred-plus years when theory and conventional wisdom would suggest
they should fail?

The answers to these questions: In Indianapolis a group of women decided
to constitute themselves as a self-governing community for the purpose
of converting government housing into cooperatively owned housing. In
Nepal farmers in self-governing irrigation systems spend more time on
building civic capital as the foundation of their capacity to govern
their own irrigation systems than do their counterparts in
government-managed systems. In Turkey necessity has driven inshore
fishermen to develop their own systems of governance to protect and
enhance a renewal of a common resource and their own well-being.

All three of these examples have a common denominator: they are based in
cooperative behavior and are prone to high levels of conflict when the
institutional structures of cooperation fail or are absent. Housing
projects in many inner cities are known as killing zones for drug wars,
to say nothing of rampant crime. Allocation of water in irrigation
systems in developing countries, especially for those at the end of
water canals, is often done through force and open conflict rather than
through agreed-upon and enforceable rules. Finally, the temptations of
fishermen to overuse their common resource is often so strong that
cheating and force take precedence over self-regulating rules.

The question I am addressing is, should or must these voluntary
self-constituting communities be the foundation of any strategy that
will succeed in dealing with the causes of conflict and the resolution
of conflict? Around the world a revolution is ongoing: communities of
men and women are taking control of their lives and building
institutions for productive action. Through action they answer this
question in the affirmative, asserting that cooperation is better than
force and conflict. This is a movement of hope.

To witness these activities one generally has to look to the underground
economies or the informal sector, for few are the direct result of
formal enabling acts or state policies. This forces us to ask *why?*
Does the growth of the informal sector or the underground economy
represent a proxy for system failure? Does it represent policy failure?
Is it a warning signal of societies prone to conflict?

In all the examples above there is conflict, to be sure, but it is
resolved through structures that have been crafted and modified by those
who govern them. I take it as a given that building strong, vibrant
civil societies as well as diverse self-governing local public economies
is an important constituent in building cooperative behavior as well as
preventing force-driven conflict.

Yet the barriers to focusing U.S. development policy, to say nothing of
building self-governing approaches in developing countries, are
Herculean at best.

**Hidden Assumptions**

I would like to start with what I consider to be the some of the key
policy givens that in the past have been associated with the creation of
predatory states that are a primary cause of conflict.

Let me start by quoting a principle that I think underpins our
interests. It is from Vincent Ostrom's new book, *The Meaning of
Democracy and the Vulnerability of Democracies:* "Democracies are at
risk when people conceive of their relationships as being grounded in
command and control rather than on principles of self-responsibility in
self-governing communities of relationship."[^2] The world is replete
with risks that are grounded in governments where accident and force,
rather than reflection and choice, fast become ways of life.

If one wants to reduce these risks the conventional answer is that one
should build democracies where individuals have standing as citizens to
become social and political entrepreneurs in building a vibrant civil
society. Yet the common policy prescription is to look to "one man one
vote" solutions as a viable way to reform rogue states. Deep beneath
this policy prescription is another policy accepted by most in the
development business: the state. Since the end of World War II
state-building has been a cardinal principle of U.S. foreign aid and
foreign policy. If one of the arts of foreign policy is statecraft, it
is hard to practice this art without states.

Yet it seems to me that any serious examination of how to prevent or
remedy the causes and effects of conflict must take a hard look at
policy prescriptions based on statism and governmentalism. This is
particularly true of the Agency for International Development (AID),
where building strong states with the capacities to provide services to
satisfy basic human needs has been a cardinal design principle. Although
AID and other agencies talk the language of decentralization and
building civil society, we see few results of truly self-governing
institutions emerge. What we see is the building of interest groups that
can get the state to respond. Yet the policy question is, do our
state-building assumptions create more conflict than they solve in the
long run?

**Thinking About Alternatives**

So what would the alternatives look like? We need to know so we can
begin to array the options to assess their capabilities and limitations.
The place to start to think about alternatives is federalism. If one
thinks of federalism as intergovernmental relations and decentralizing
program authority to state and local governments, one has already taken
a conceptual turn that has a 99.1 percent probability of being a dead
end.

What the modern age has forgotten is that federalism, at least our
variety, was first and foremost a political theory of citizenship. The
modern rendition of Hamilton's self-governing presumption in *Federalist
One* is to consider whether societies of men and women can choose good
government through reflection and choice, or whether they must depend on
accident and force to produce their constitutions.[^3]

Can we answer this question positively through our policy instruments? I
would suggest that a positive answer must build on how people relate to
one another in addressing the day-to-day issues of life. Face to face,
small self governing efforts are just as (or more) important in building
a democratic way of life and resolving conflict as one-man-one-vote or
majority rule. Again Vincent Ostrom is helpful. He states,
"Person-to-person, citizen-to-citizen relationships are what democratic
societies are all about. Democratic ways of life turn on self-organizing
and self-governing capabilities rather than presuming that something
called 'the Government' governs."[^4]

Now the importance of this to conflict resolution is that if you look at
most cases of conflict, say in our inner cities, what you find is
institutional poverty. By that I mean that the citizens in these
communities have very little authority to be self-organizing. The
authority or power to be self-organizing politically has been
centralized into cities, states, and the federal government. Instead of
a local public economy we have a grants economy where citizenship has
been reduced to two roles: voting and consumption of services. Also
missing are rooted organizations that have the self-interest and
capacity to negotiate settlements with other groups and governments that
possess the attributes of a win-win game of conflict resolution.

**Designing Alternatives**

If we want to build the civil and self-governing capacities of
developing countries as a strategy for conflict resolution, how do we do
it? After just having left a century that can be characterized as one of
centralization of governments, professions, and industry, where do we
begin to build small-scale enterprises? New-age information gurus like
Gilder and Toffler argue that the information age offers powerful forces
for decentralization, yet they provide few road maps of how to get
there.[^5]

I would suggest that a good starting guide is Alexis de Tocqueville in
*Democracy in America.* He argued that the new age of democracy would
only succeed to the degree that it developed a new political
science---one based on a science of association. I take this to mean
that we must replace the science of statecraft and hierarchical
management with a science of democratic association and a new theory of
public administration that is public and democratic. What does this
mean? Let me outline a set of design principles that lead us in a new
direction---a direction that could have profound impact on conflict
resolution.

**[Supporting Citizens as Citizens]{.underline}**

In my three introductory examples we see citizens playing roles of much
more than consumers of government services or mere ratifiers of
electoral contests between competing elites. If we look closely we see
citizens creating their governing institutions and then governing their
affairs. Even the poorest of citizens can become creators of publicness
in their own institutions.

In the age of centralization we have forgotten that local citizens built
America through what can be called local public economies. Among the
engines of development were thousands of special districts: fire, water,
school, and rural electrification districts that were governed by local
citizens. A rich array of state and federal enabling acts were built on
the fundamental notion that local citizens were capable. So there is no
question of capacity.[^6]

It can be argued that self-governance is a basic human capacity and a
basic human need. This capacity is also the wellspring for fundamental
human development. To deny people the right to develop this capacity is
a violation of equity and is sure to marginalize communities. It will
ultimately lead to high levels of cynicism and alienation and will
certainly become a source of conflict. The Catholic principle of
subsidiarity most strongly argues that to deny people the right to do
those things they are capable of is also a moral violation. I make these
statements because to build a new foreign policy on the principles of
citizenship and self-governing communities would be a fundamental
shift.[^7]

**[Underwriting Constituting Processes Is Critical]{.underline}**

Let's start with what many practitioners of the self-governing art know
to be critical to the likely success of any venture. In my work in
housing projects what I call the constituting processes are the most
important---those processes that allow individuals to come together and
develop a shared consensus about values and purposes. Sustained
reflection and discussion are key to building trust and shared
understanding, the two bedrock values that allow consensus to emerge,
decisions to be made and sustained, and reciprocity---the lifeblood of
politics---to deepen. We learned from experience that you cannot manage
until you can govern.[^8] These constituting processes are local
constitutional processes; they are the ways a community builds a
fundamental commitment to a set of core values. Their downside is that
they take time, which, in an impatient policy world, is a negative. Yet
there is no substitute if you want local people to govern and produce
important local services. There exists guidance from good research on
how to think about these processes. In *Crafting Institutions for
Self-Governing Irrigation Systems* Elinor Ostrom draws from extensive
research eight design principles that can aid local citizens in building
self-governing institutions.[^9]

There is, of course, a formal side to these constituting processes. The
constituting processes ultimately assign rights, duties, and
responsibilities. The voting rules provide a formal means through which
communities ratify their consensus. From these constitutions and voting
rules come bylaws, laws, and regulations that allow communities to
monitor and enforce their decisions. What cannot be stressed enough is
that in healthy communities these two processes are merely different
sides of the same coin. Where one is missing we face serious issues of
institutional failure and conflict.

**[You Must Link Character and Institutions]{.underline}**

How people think about and view opportunities is determined in part by
the institutions they have lived in and under. To tell local groups that
have lived within highly centralized societies in developing countries
that they have the capacity, right, and responsibility to live in
self-governing communities is to utter words that simply have no basis
in reality. To develop new ways of thinking about such opportunities
requires that we focus on the enabling environment. Let me provide an
example. When the U.S. Congress passed Project HOPE in 1987, it for the
first time conveyed authority to citizens in government housing projects
to create resident management corporations with the added authority to
convert these projects into cooperative tenant-owned developments. This
one act changed the ground rules of association, how tenants would
relate to local housing authorities, local politicians, and
public-sector unions. For the first time residents saw an opportunity to
solve real problems using their own resources. This is also an excellent
example of how people's character, how they think and act, can be
influenced and changed through a change in the institutional structure.
The Laurelwood Resident Management Corporation in Indianapolis has a
reason to become actively involved in reducing crime in its development
and neighborhood. Unfortunately, thirteen years after Project Hope was
launched, only two out of over one thousand demonstration projects are
nearing homeownership.

**[Focus on Enabling Environments]{.underline}**

In creating Project HOPE the Congress in all its wisdom did not change
the institutional incentives in the Department of Housing and Urban
Development to facilitate and reward public administrators and local
housing authorities who succeeded in assisting resident management
corporations in moving toward homeownership. It is unrealistic to think
that the AID could implement a new approach to building civil societies
without a clear set of policies---policies that would create powerful
incentives for states in developing countries to expand public authority
so that self-governing experiments could emerge from the choices of
citizens in local communities. This would also require that the U.S.
State Department recognize that it is in its own self-interest to move
from almost a blind acceptance of states toward building systems of
governance to solve both local problems and regional conflicts. I would
presume that at this time there is little consensus in the United States
on the aims or means of our foreign policy, which suggests to me that we
need a national discussion on new approaches.

**[Build Local Knowledge and Patience into Your Policy
Designs]{.underline}**

In the heady development days after World War II, state-building was
joined with excessive pride in the potential of the social sciences to
provide the types of information necessary to reach high levels of
development. In *Seeing Like a State* James Scott echoes what most
practitioners of development know: local knowledge plays an
indispensable role.[^10] The problem with local knowledge is that it is
lumpy, discrete, contextual, and difficult to into abstract concepts
capable of quantification. Built from years of experience, it is based
on trust, reciprocity, and mutuality of interest. To know the
capabilities of local leaders, to understand a community's social and
political dynamics, or to know the various aspects of a problem requires
that development specialists become immersed in the local community. And
if the constituting processes are key to political development, we are
talking time frames that far exceed the three-to-four-year assignments
of most development officers.

## [Small is Not Always Beautiful]{.underline}

While we have neglected at our peril the critical role that small
enterprises play in both the public and private sector, we should not
become blinded to the necessity of larger systems. A small-scale
irrigation system must be associated with other public enterprises that
deal with water basin issues, large-scale wholesalers of water, and
national policies that seek to rationalize the use of water. The issue
is how these small-scale enterprises can be partners in negotiated
solutions in which their self-organizing authority is not compromised.
There is a fundamental principle of organization involved here: people
and communities will only invest their scarce political and social
resources in activities when there is a clear return. A key to
stakeholding is that stakeholders have sufficient authority and rights
to participate with a high probability of return. All too often this
principle is violated.

There is also a second issue that must be addressed: hierarchy. All
order depends on recourse to ordering principles that have hierarchical
aspects; even a system of law favoring private property sets priorities.
In *The Chalice and the Blade* Riane Eisler recommends that we
distinguish between "dominator hierarchies" and "actualization
hierarchies," which I think points us in the right direction in thinking
about how we must change policy development and the structure of public
affairs in development activities.[^11] This implies key involvement of
national and regional levels of governance, but with a different role.
How do these levels develop enabling acts and administrative strategies
that facilitate the emergence of self-governing communities of interest,
with real capacities to solve real problems?

## [Create a New Public Administration]{.underline}

Rather than blindly following the Weberian model of hierarchical
administration we should begin to create a practical, democratically
centered public administration. The key principle of that administration
would be to build the capacity of citizens and communities to reflect,
choose, manage, and change their governing institutions. In short, we
need a public administration that builds citizens and then
self-governing communities.[^12] To do that we must change the reward
and incentive structures that public servants live within. Since these
new functions take longer periods of time and are dependent on vast
amounts of local knowledge, we should lengthen the tours of duty of AID
officials commensurate with the natural time frames of democratic
development.

**[Threats]{.underline}**

Just as we have guidance from good research, we know from that research
and experience that there are systematic threats to communal
self-governance. Let me mention two that Elinor Ostrom has found to be
systematic: blueprint thinking and overreliance on external supporters
for funding. National administrations love blueprinting approaches; they
are systematic and "efficient." Yet blueprint thinking or the
cookie-cutter approach assumes uniformity of condition, which can never
be met in our diverse world without coercion and force. More
importantly, applying one-solution-fits-all destroys the critical
constituting processes that allow communities to build consensus around
approaches to solving local problems. It also introduces a weakness into
nascent states that must and should deal with the diversity found in
most developing countries.

Overreliance on external funds likewise short-circuits local political
processes and can create in communities factions that are hard, if not
impossible, to overcome. Most importantly, they short-circuit the
investment of human resources so necessary to building legitimate
political responses to problems.[^13]

**[Thinking About Application]{.underline}**

It seems clear that this approach has little application when conflict
has already broken out, as in the case of Rwanda. Yet two interesting
questions are suggested. First, was a major cause of the conflict in
Rwanda that the formal government boundaries so violate the natural
social self-governing boundaries that the only way to maintain the
appearance of a government in control was force? Second, were
self-governing solutions a critical part of the settlement process? Wal
Duany shows in his work with the Neur that many of their conflicts were
constitutional: old understandings about the use of grassing and water
holes had broken down, and after a forty-five-day constitutional
convention of sorts, a new set of rules was at least able to solve that
portion of the conflict.[^14]

In the case of rebels in Nepal, the interesting question is whether its
self-governing irrigation systems are a model and foundation for seeking
ways to resolve the conflict for the long term.

## 

## Great Promise: From Weak States to Strong Systems of Governance

As paradoxical as it may seem, much conflict may be the result of weak
states rather than strong systems of governance. Many states are so
devoid of legitimate political authority that they are threatened to the
point of conflict by individuals and groups making legitimate claims for
representation and public authority to govern their lives. The challenge
is how to expand public authority in developing countries by expanding
diverse local self-governing enterprises, and how to make it understood
that this strategy is a win-win approach for all concerned.

If one is willing to stop seeing like a state and instead look at
success models for solving conflict at the grassroots level, one can see
models and approaches that hold out great promise. Yet to incorporate
these approaches and their lessons in a general strategy of conflict
resolution means we will have to unlearn a great deal of what we think
we know. We will also have to overcome the entrenched resistance of most
existing states and multi-interests that benefit from the existing
structure.

To start this process we should consider the following:

1.  A sustained national debate on how to change our foreign policy and
    development assistance in a changing world. Can we ask and answer
    the question: how can we design foreign assistance to reduce the
    overall level of conflict before it begins? Redesign the foreign
    assistance act to create powerful incentives for both AID and host
    countries to build truly self-governing local institutions should be
    a major question of any redesign.

2.  Redefine the reward structure for AID civil servants to a more
    political-public role.

3.  Support research that builds our understanding of how local
    self-governing institutions are designed and how they operate,
    creating a practical base of knowledge that can then be used in our
    development efforts. Essential to such research is understanding how
    democratic initiative has failed in the past.

4.  Leadership will be a key element in determining the success of a new
    civic building effort. Toward this end AID should consider creating
    a leadership institute that trains both AID professionals and local
    leaders in the knowledge and art of self-governance. Only when we
    build a solid base of local leaders who understand and practice
    self-governance will we be able to make real progress in
    transforming weak states into strong systems of governance capable
    of resolving conflicts.

[^1]: For an excellent study of this subject see Wai Fung Lam,
    *Governing Irrigation Systems in Nepal: Institutions, Infrastructure
    and Collective Action* (San Francisco: ICS Press, 1998).

[^2]: Vincent Ostrom, *The Meaning of Democracy and the Vulnerability of
    Democracies: A Response to Tocqueville's Challenge* (Ann Arbor:
    University of Michigan Press, 1997), 4.

[^3]: J. E. Cooke, *The Federalist* (Middletown, Connecticut: Wesleyan
    University Press, 1961), 3.

[^4]: Ostrom, op. Cit., pp. 3--4.

[^5]: George Gilder, *Microcosm: The Quantum Revolution in Economics and
    Technology* (New York: Simon and Schuster, 1989) and Alvin and Heidi
    Tofler, *Creating a New Civilization: The Politics of the Third
    Wave* (Atlanta: Turner Publishing, Inc., 1994).

[^6]: See Robert B. Hawkins, Jr., *Self-Government by District: Myth and
    Reality* (Stanford: Hoover Press, 1979). For an excellent study of
    the California water industry and public entrepreneurship see
    William Blomquist, *Diving the Waters* (San Francisco, ICS Press,
    1992).

[^7]: See Bruno V. Manno, "Subsidiarity and Pluralism: A
    Social-Philosophical Perspective" in *Toward Vatican III: The Work
    That Needs to Be Done,* ed. David Tracy, Hans Kung, and Johann B.
    Matz (New York: The Seabury Press, 1978).

[^8]: Stephen Cornell and Joseph Kalt, ed., *See What Can Indian Tribes
    Do? Strategies and Institutions in American Indian Economic Growth*
    (Los Angeles: American Indian Studies Center, 1993). In their study
    the authors find that the self-governing capacity of a tribe is
    closely associated with successful economic development.

[^9]: Elinor Ostrom, *Crafting Institutions for Self-Governing
    Irrigation Systems* (San Francisco: ICS Press, 1992), 69--75. Ostrom
    outlines eight principles that guide successful self-governing
    enterprises. They are: clearly defined boundaries, benefits exceed
    costs, collective-choice arrangements, monitoring, graduated
    sanctions, conflict-resolution mechanisms, minimal recognition of
    rights to organize, and nested enterprises. While there is no
    hierarchy to these principles, I would put recognition of rights to
    self-organize near the top of any set of priorities for developing a
    broad-based movement toward self-governance.

[^10]: James C. Scott, *Seeing Like a State: How Certain Schemes to
    Improve the Human Condition Failed* (New Haven: Yale University
    Press, 1988). See particularly Chapter 9, "Thin Simplifications and
    Practical Knowledge: Metis."

[^11]: Quoted from Ken Wilber, A Theory of Everything, (Boston,
    Shambhala, 2000) p.25.

[^12]: See Vincent Ostrom, *The Intellectual Crisis of American Public
    Administration* (Tuscaloosa: University of Alabama Press, 1989).

[^13]: Footnote forthcoming.

[^14]: Wal Duany, *Neither Places nor Prisons: The Constitution of Order
    Among the Neur* (Ph.D. diss., Indiana University, 1992).