Wedel_U.S. Assistance for market reforms_Foreign Aid Failures in Russia and the Former Soviet Bloc

Wedel_U.S. Assistance for market reforms_Foreign Aid Failures in Russia and the Former Soviet Bloc

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Since the fall of the Berlin Wall in 1989 and the subsequent breakup of the Soviet Union in 1991, the governments of the United States and other Western countries have provided massiv e aid to promote a transition to the free market in Central and Eastern Europe and the forme r Soviet Union. But aid for market reforms in th e region has been largely ineffective. Whether pro - vided in the form of technical assistance, grant s to political groups or nongovernmental organ i - zations, loans and guarantees to the private se c - tor, or direct financial aid to post-communis t governments, that aid has been plagued by a number of problems. The failed $22.6 billion bailout of Russia by the International Monetar y Fund in July 1998 only confirmed the flawed nature of the aid-for-reform approach . Technical assistance, for example, has often been used to hire Western consultants whos e advice is redundant or adds little to the develop - ment process. Aid has become an end in itself , and, in prominent instances, has resulted in con - flicts of interests or self-enrichment of aid - financed advisers. Because providing officia l funds to countries in transition is an inherentl y political process, reform efforts often backfir e when they are perc e ived to follow an agenda se t by Western governments. Those efforts hav e
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Introduction When the Communist Eastern Bloc co l - lapsed in 1989 and the Soviet Union itsel f ceased to exist in 1991, it seemed that the Wes t (particularly the United States) finally had what it had always wanted—the opportunit y to introduce quick, all-encompassing politica l and economic reform. International lendin g institutions and the foreign aid community ,
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This note was uploaded on 06/13/2011 for the course POLI 391 taught by Professor Anikin during the Summer '11 term at South Carolina.

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Wedel_U.S. Assistance for market reforms_Foreign Aid Failures in Russia and the Former Soviet Bloc

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