May 26 2009

Nodes of power

by at 3:46 pm

There is an undeniable interdependence in the global network between states, financial institutions and NGOs, but this network is not the same internationally. Different states and regions have different connection strengths between these nodes – and some networks are more susceptible to changes from certain nodes. This comes from the uneven global development that Stiglitz writes of extensively. The divide between rich and poor countries that he writes about in “The New Global Economy” means what happens within the United States’ nodes, for example, may directly affect India, a lower-middle income country. But what happens in India may not always directly affect the U.S. It comes down to economic strength, political might and histories of power.

That said, regardless of the geographic section of the network, what happens in one node inevitably affects the others. Here the state and financial institutions seem to have more power than the NGO node, following the politics of globalization.

Consider state priorities – if a country’s foreign policy identifies another country as a vested interest, NGOs may take more notice and begin or increase work in that country. NGOs will be further compelled to do so because financial institutions are more likely to fund projects. The results are widespread, including cash and human resources capital flowing into the selected country. These resources then begin to affect that country’s network – though the results could be good or bad, as Collier and Stiglitz both note.

NGO work in Afghanistan highlights this. The U.S. took an active interest in investing in redevelopment projects and money was thrown into Afghanistan as NGOs flooded the country to build roads and schools, bolster civic society and more. These resources have helped many in Afghan society, but also have helped restart the countries poppy production. Both the good and bad have an impact on Afghanistan and its place in the global network.

The opposite also would hold true of nodes affecting each other – if a state does not hold another country as a high priority, financial institutions are less likely to fund projects and therefore many NGOs either must seek funding elsewhere or move on to another region. Cuba is a good example of this. Because of the U.S. embargo on most goods, services and travel, financial institutions would not consider funding projects by NGOs, who are not allowed to operate within the country.

Given the interdependence, the question becomes how to use the global network for good. States and financial institutions do hold much of the power, and this can be a problem if NGOs are beholden to politics and at the mercy of institutions with an agenda. Decades of top-down World Bank development projects show this is usually spectacularly unsuccessful and may be ruinous to local populations.

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