Fukuyama trends toward being right on this issue. From a post of mine from March:

"We tend to approach the debate on democratization in the Middle East with a focus on constitutional or technical requirements of democratic regimes (free elections, rule of law), and the policies supporting these challenges (civil society projects, security sector reform). The ultimate hope, because of the role of Islam, is that secular politics will take precedence over religion. This approach is full of good intentions. But it is unlikely to be sufficient, even in the long run, because effective democratic state- and nation-building comes only through involvement of mass movements in a continuously negotiated settlement of the social question. The approach is willfully blind to the fact that secularization in the West itself is skin-deep because the fundamental societal compromises between growth and state provisions mirror widely shared religious ethics.

The upshot of this is that policies in support of Middle East democratization cannot expect to directly produce secular regimes. Western policy-makers should aim to support processes which will fuse state institutions with ethical conceptualizations of the good society that are representative of the populations. This also means embracing those Islamic movements that provide social services – because they hold the key to producing legitimate state projects in the region."

Dan,

I think Fukuyama is pretty off-base on this one. He clearly knows little about US assistance policy.

Money for privatization, democratization, etc is a drop in the bucket compared to what the US (not to mention the WB and other donors) spend on social sector programs in developing countries. I don't have the figures in front of me, butI would estimate 60-70% of development assistance goes into health care, education and social policy in most countries where USAID has missions. Of the remaining 30 or so percent, probably half goes to environmental issues, with the remaining 15% is spent on democratization, free trade and privatization. These amounts obviously vary country to country, but I've worked with USAID in more than a dozen countries and this seems to pretty consistent.

The MCC is only considered an innovation in the academic/think tank community. In the development community it is not highly regarded. The fundamental concept (conditionality - we give you money for good behavior) is not exactly new. The idea that countries then get to determine how that money is spent is also hardly novel. Moreover, it is staffed heavily by former USAID officers, who brought their experience, but also their baggage with them. As a result, it has not been an engine for innovation in the field.

We don't need a Washington Consensus on social issues. There is a much more practical problem: US foreign assistance policy is a complete mess. There are several competing agencies USAID, MCC, PEPFAR, State all fighting over turf and resources. As a result, in some countries, there can be 3-4 separate US government agencies trying to implement very similar programs.

Rice's efforts to establish a central director of foreign assistance, while well-intended, appear to have empowered the State dept to take over US assistance. That might sound good to those who argue that US assistance should be directly tied to US policy goals, but experience clearly demonstrates that it leads to bad development outcomes. It leads to short-term political favors that undermine long-term goals of improving people's lives. US assistance should reflect our core values, but be somewhat insulated from the day-to-day quid pro quo of diplomacy.

Straightening out the bureaucratic mess in DC will probably go a lot further in improving the delivery of US assistance than coming up with some new social policy framework.

Aren't DD and FF in agreement here? Both of you seem to think there is no Washington consensus on aid.

If we could develope a domestic social policy that works we might be able to export it.

US social policy is so dysfunctional that yes, we do have a social policy. Example -- government spending on health care that equals the UK's National Health Service spending as a proportion of GDP, but only covers 42 percent of the population instead of something like 85 percent. And private health care provision that is just as dysfunctional and profligate. When it is getting to the point that US companies are outsourcing to other developed economies like Canada in order to avoid health care costs, you see the consequences.

There is one area where the US shines, however -- senior citizens -- among whom the poverty rate is far below the national average (rather than far above the national average as is the case in many other countries). The current Social Security system is far stronger than anyone gives it credit for, and its augmentation with a raft of tax policies such as IRAs, 401(k)s and so on helps to further cement the condition of seniors in this country. We throw this arrangement of policies away at our peril -- every alternative to Social Security so far mooted would cost more and deliver lower benefits. Even if the growth rate in Social Security benefits needs to be scaled back, it's still better as a secure, basic cash benefit than any alternative out there, here or abroad. It provides a basic safety net and gives people the cash security to take greater and ultimately more rewarding risks with their private investments.

It seems to me that Fukayama is being inconsistent in that post. He talks about what organizations like Hezbollah and Hamas do, but then he says, "But there is no equivalent of the 'Washington Consensus' on how to help Bolivia or Pakistan or Egypt improve its primary education system..."

But Hezbollah doesn't sit around trying to figure out how to "help [Lebanon] to improve its primary education system." Nor does it offer "programs." It just opens up schools or clinics or whatever.

Ooops -- typo in the very first line of my previous post. Should say, ". . . .yes, American does have a social policy deficit." Though I suspect that's how most people already read it anyway.