Paper short abstract:

This paper situates the privatization of US development assistance since the 1980s in the wider context of globalization, demonstrating how privatized development finance has served as a form of American industrial policy that seeks to mitigate the effects of trade liberalization.

Paper long abstract:

Scholarship on American development assistance has documented the expanding role for the private sector as a development actor since the 1980s. This literature has cast this transformation as one of privatization, in which activities historically carried out by the state are instead carried out by private corporations. In this paper, we complicate this narrative, showing that the privatization of American development policy has transformed the nature and purpose of development programs, not merely their funding source. Using a hand-coded database of 74 USAID reports from 1960 to the present, we show that privatization proceeded in two, normatively-distinct stages. From the 1980s to the end of the 20th century, the United States promoted the growth of the private sector in developing countries as the goal of its development policy through structural adjustment. Since the late 1990s, however, development policy has become a vehicle for expanding trade and investment opportunities for American businesses. In the context of political controversy about trade liberalization, the use of development to promote marketing opportunities for American firms has been justified as a mechanism to preserve American jobs in a globalizing world. We argue that explanations of the privatization of development must distinguish between programs that promote the interests of business in donor versus recipient countries, and take account of the links between development, trade and the domestic politics of donor states.