Thursday, July 23, 2009

Free Market Civil Society

After the Asian tsunami, Ian Smillie proposed a new system for disaster relief, modeled on the British system. He made the observation that there is so much competition among relief organizations in most countries that it results in (1) unnecessary fund-raising costs and (2) lower donations due to public burnout from too much solicitation.

By contrast, in the British system, which has been operating since the 60s, the 12 main disaster relief organizations have formed a Disasters Emergency Committee. This committee:

- Maintains a fund so they can respond to disasters immediately.
- Coordinates their activities.
- Has relationships with TV networks, banks and the post office to streamline and hasten the donation process.
- Keeps fund-raising costs low.
- Gives the money to organizations deemed most likely to be effective in that particular location/type of disaster.

Smillie is a level-headed, pragmatic fellow who is always coming up with good ideas and insightful comments. His suggestion that other countries adopt this approach is bang on.

But the other thing that interests me about this idea is the depiction of the civil society as a competitive free market (which of course it is). While all of us who are bombarded with junk mail from NGOs know this, we don't normally think of it that way.

For example, Wikipedia defines civil society as being "the totality of voluntary civic and social organizations and institutions that form the basis of a functioning society as opposed to the force-backed structures of a state (regardless of that state's political system) and commercial institutions of the market."

Part of the problem with the Wikipedia entry is that it's wrong to say that civil society is voluntary. Many positions within NGOs are paid, and some command some very hefty salaries. (To be fair, the British word for NGO is VCO, Voluntary and Community Organizations, which may explain the Wikipedia definition.) But the other problem is the distinction of civil society and the commercial market.

We have an idealistic view of NGOs (charities, advocacy groups, church organizations, community groups, unions, professional organizations) that they are somehow selfless, outward-oriented organizations. Of course they aren't. Their goal, just like corporations, is to meet payroll, grow, provide services, and improve their brand. Many have endowment funds. Like corporations, most have boards of directors and auditors. Operationally, the distinction from for-profit corporations is often not great.

Many charities have a lot of influence over very vulnerable people, whether at home or in poor countries, and many have enormous resources. They may have do-gooder intentions, but they don't always do good - such as when they go to countries with high rates of AIDS infection and tell people they'll go to hell if they use condoms (Catholic church) or they tell women who've been raped that they'll go to hell if they have an abortion (American evangelicals) or when they have general tax exempt status but only help people who profess to be of the same faith (of which there are tons of examples, but just one is many groups that work in prisons).

They might just be incompetent, like charities that bring canned fish to disaster areas where starving people think of fish as gross and inedible (many non-coastal parts of Africa) or they may do good works that have unintended but dire consequences, like setting up refugee camps that lead to deforestation and destruction of roads (giant UNHCR trucks) or arriving at a disaster zone without a plan and impeding real help (everyone but the Red Cross). Then there are leftists who like to go to Africa to tell people that all their problems are caused by colonialism, which disempowers Africans and wrecks attempts to solve their problems.

None of that even touches the issues of lack of coordination, obnoxious and expensive fund-raising, inefficient duplication of efforts, and so on.

There are some attempts at coordinating NGOs, but not enough. (I worked at an umbrella organization for NGOs in Tanzania in the 90s so know a bit about the difficulties of doing that - we had physical altercations sometimes among warring factions.) There are some attempts at collective disclosure, such as web sites that compare NGOs on percentage of funds that go to the intended targets, but not enough. Tax exemption rules have some built-in safeguards. There are attempts at self-regulation within civil society. I wonder if there should be more direction provided to this competitive arena by government. Smillie says (link above) that it was the BBC that made UK charities coordinate their efforts. Perhaps our government should be regulating, or at least playing a role in advising, our NGOs.

Buth there are problems. For example, it's not true that the best-run charity is one that spends the maximum percentage of its funds on its targets - because you have to have adequate planning and auditing, and that costs money.

When the UK government commissioned a large study on this issue in 2005 (Better Regulation for Civil Society), they found that regulation dampened enthusiasm and innovation in civil society. It was red tape that many NGOs don't have the resources to maintain.

So it looks like small steps are the way to go, like the Disasters Emergency Committee - and more clear-headed thinking about what NGOs really are and what they should be doing.

Correction: My dad the philosopher sent the following to me in an email (which shows that I should discuss these things before posting!): "“Voluntary” when applied to civil society doesn’t connect with “volunteering”. Wikipedia was alluding to the classical view of the distinction between society and the state, where the state is said to be coercive and compulsory [you can’t unilaterally withdraw from the state, but it has to let you go and it has a monopoly on force] whereas society is voluntary [you choose to join social groups are not]. So whether people in civil society are paid or not is beside the point. I wrote a paper a long time ago criticizing this standard view of the distinction between state and society, arguing that a state could have only laws that are permissive [promising rewards if people do wanted things] and none that threaten people with punishment for non-compliance; such a state could collect the money it needs not through coercive taxation but through raffles, etc. One might say that such an institution would not be a state, but in my view that would involve circular reasoning or begging the question."


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