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I Introduction
How do global governors relate to eac/ ot/er and w/at% if an% are t/e
conse?&ences of t/ese ties2 Alt/o&g/ sc/olars of international organi@ation tend to foc&s
on t/e "&r"ose and str&ct&res of contem"orar global governance% t/e act&al ties t/at link
global governors remain &nder4t/eori@ed As t/is essa will s&ggest% s&c/ linkages not
onl set "arameters on t/e agenc of individ&al global governors% b&t t/e also /el" to
establis/ t/eir a&t/orit over a given sector
9f t/ere is a "revailing wisdom on t/e to"ic% it is t/at global governors are
im"licated in a set of networks t/at involve vario&s t"es of international and
transnational actors Ann arie #la&g/ter /as recentl advanced one of t/e most
so"/isticated versions of t/is t/esis and arg&es t/at t/ese networks are com"rised of a
variet of actors or governors% incl&ding international organi@ations% non4governmental
organi@ations and disaggregated "arts of states and t/eir b&rea&cracies B#la&g/ter -))3
T/ese actors forge bot/ /ori@ontal ties wit/ ot/er organi@ations to coordinate and manage
t/eir reg&lator tasks% as well as vertical ties to delegate t/e governance of "artic&lar
iss&es and sectors to s"ecific transnational bodies
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strategies to advance ca&ses internationall t/at are regarded as illiberal% or to c/eck t/e
advance of ot/er activist networks t/at ma infringe on t/eir val&es
Adding to t/ese criti?&es% t/is c/a"ter criticall examines t/eproject contractas a
distinct mec/anism of global governance 9t s&ggests t/at contracting is not merel a
tec/nical ve/icle for delegating or delivering governance !rawing &"on organi@ational
t/eor% 9 ex"lore /ow t/e introd&ction of contracts into a "revio&sl non4contract&al
realm affects t/e incentives and relational ties t/at bind global governors At t/e micro4
level% 9 arg&e t/at t/e terms of a contract infl&ence an organi@ation0s strategic be/avior%
w/ile at t/e macro level 9 ex"lore /ow contracting infl&ences t/e a&tonom% com"etition%
acco&ntabilit and tr&st among governors 9 ill&strate t/ese claims b examining t/e
growt/ of contracting as a governance mec/anism in two ver different contem"orar
transnational sectors: '#4led "ost4war reconstr&ction in 9ra? and t/e international
/&manitarian aid regime T/e cases are instr&ctive in t/at t/e demonstrate im"ortant
variation in t/e terms of contracting t"es% b&t also s&ggest t/at contracts% more generall%
ma dissi"ate acco&ntabilit and erode tr&st% even across w/at &s&all are regarded as
dissimilar t"es of governors and transnational actors
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agreements among transnational actors t/at sti"&late "ament for a s"ecific "roject or set
of services 9 differentiate formal contracts from more informal coo"erative relations/i"s%
comm&nications or &nderstandings t/at /ave been reac/ed wit/o&t a formal written legal
agreement and bidding "rocess
Micro-level Effects: Contractual Terms and Organiational !ncentives
Contracts var in t/eir exact sco"e and terms #ix s"ecific as"ects of contracts F
cost str&ct&re% com"leteness% d&ration% monitoring% "erformance sanctions and renewal
"otential F can all s/a"e t/e incentives of contracting organi@ations BCoole -))E
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ex"and its j&risdiction and% if available% a""ro"riate an available s&r"l&s rent or
o""ort&nities not assigned b t/e original contract Bfor 6' a""lications% see
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Macro-level Effects: #o$ Contracts Might %ffect Relations %mong &overnors
9f t/e terms and incentives offered b contracts affect a contracting governor0s
overall organi@ational strateg and be/avior% /ow in t&rn does contracting im"act broader
relations among governors2 =ee"ing wit/ #la&g/ter0s model of global governance
networks% we can /"ot/esi@e abo&t a n&mber of likel effects t/at t/e ado"tion of
contracts is likel to /ave on bot/ t/e /ori@ontal and vertical ties of contracting
governors
1e s/o&ld also bear in mind t/at t/e transnational or global environment ma
differ in significant was from a domestic setting 9n t/e latter% binding domestic law and
establis/ed adj&dication "roced&res make t/e enforcement of contracts and sanctioning
more likel t/an in a transnational setting w/ere s&c/ binding legal oversig/t is absent or%
at least% considerabl weaker an of t/e international settings t/at are most likel to
witness a s&dden "roliferation of contracting governors F com"lex emergencies% disaster
relief sit&ations% "ost4conflict reconstr&ction F are c/aracteri@ed b "olitical &ncertaint%
legal vac&&ms and a lack of ca"acit t/at renders states% and international organi@ations%
&nable to ade?&atel monitor t/e o"erations of contracted governors
Contracting and Com"etition BHori@ontal Ties
Contracting governors% es"eciall t/ose wit/o&t an alternate "rivate reven&e
stream% m&st com"ete for contracts for t/eir organi@ational s&rvival Com"etition for
contracts "rivileges t/e im"ortance of t/e tender "rocess wit/in t/e organi@ation0s
"lanning and strateg T/e more reliant t/at an organi@ation becomes on external
contracts for its fiscal s&rvival% t/e greater t/e c/ance t/at its internal staffing and
activities will be geared towards sec&ring and maintaining external contracts
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7ver t/e longer term% com"etition over contracts ma also affect t/e sco"e of
iss&es and f&nctions t/at governors c/oose to &ndertake Com"etition over "roject tenders
enco&rages contracting governors to contin&o&sl amend and ex"and t/eir ca"abilities
and task s"eciali@ation in order to bid on new contracts t/at ma not necessaril directl
relate to t/eir traditional area of ex"ertise 9n organi@ational terms% t/e increasing
com"etition for contracts ma act&all decrease t/e f&nctional s"eciali@ation of global
governors
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strengt/ of its oversig/t "rovisions ma well determine a contractor0s a&tonom from t/e
donor
Contracting and Acco&ntabilit BJertical Ties
Contracting is also likel to affect t/e acco&ntabilit of governors $ se"arating
t/e roles of mandate Bdonor and im"lementation Bcontractor% contracts act&all s"lit t/e
res"onsibilit for a governance initiative and "roject T/is s"lit creates "la&sible
deniabilit for donors% w/o can take credit for relativel s&ccessf&l "rojects% b&t can
deflect blame for less s&ccessf&l o&tcomes on t/e contractor0s "oor exec&tion oreover%
as Avant describes in /er examination of "rivate sec&rit com"anies% contracting for
services can also b"ass traditional mec/anisms of legislative oversig/t in donor
co&ntries% t/ereb em"owering t/e exec&tive and s/ifting internal balances of "ower
BAvant -))5: 3,,4,- T/e legal &ncertaint generated b a transnational environment%
"artic&larl in weak instit&tional settings% also f&rt/er dissi"ates traditional c/ains of
acco&ntabilit as contractors ma even be granted imm&nit for t/eir actions from t/e
laws of t/e co&ntr t/at t/e are o"erating in To be s&re% as Grant and =eo/ane remind
&s% t/ere are several t"es of acco&ntabilit involved in global governance% and not all of
t/em are legal or "artici"ator BGrant and =eo/ane -))3 However% wit/ exce"tion of
t/e re"&tational effects% none of t/e ot/er mec/anisms of acco&ntabilit t/at t/e identif
B/ierarc/ical% s&"ervisor% legal% market% "eer act&all a""l in a transnational
contract&al setting% w/ere oversig/t of a contracting governor remains minimal
T/is dissi"ation of acco&ntabilit also raises serio&s concerns over t/e longer
term abo&t t/e so&rces of "olitical a&t/orit for global governors Alread% in bot/ t/e
develo"ment and /&manitarian world% actors on t/e gro&nd view o&tside contractors%
es"eciall "roject cons<ants% wit/ great s&s"icion and ske"ticism B1ar on 1ant -))E
T/&s% contracting governors ma contin&e to o"erate in vario&s areas of global
governance% b&t t/eir credibilit wit/ /ost co&ntr governments and target gro&"s ma be
greatl diminis/ed if t/e are viewed as self4interested contractors as o""osed to
committed governors
Contracting and Tr&st BHori@ontal and Jertical Ties
Coole4*
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t/e game wit/ binding contracts attrib&ted t/e "las of ot/ers to t/eir contract&al terms
and constraints% rat/er t/an dis"osition to tr&st% even if t/e /ad been "revio&sl deemed
tr&stwort/ Bal/otra and &rning/am -))-: 3E. $ contrast% t/e a&t/ors fo&nd t/at
w/en t/e ex"eriment was re"eated &sing non4binding contracts% levels of tr&st increased
significantl% even in an anonmo&s% com"&ter4mediated environment Bal/otra and
&rning/am -))-: 33-
#econd% t/e "ros"ect of contract&al renewal is not t/e analtical e?&ivalent to an
iterated interaction among agents,
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governors according to its "artic&lar sit&ational logic and constraints
#'potheses on Contracting and &lo(al &overnance
T/e above disc&ssion s&ggests t/e following general /"ot/eses abo&t contracting and
global governance:
Working Assumption: The terms of a contract ) its pa'ment structure* completeness*
duration* monitoring mechanisms* performance sanctions and rene$al prospects )provide the incentives for the (ehavior of a contracting governor+
Hypothesis 1: Contracting engenders competition among actual and prospectivecontracted agents+
Hypothesis 2a: Contracting is more li,el' to reduce the organiational autonom' of
contracted agents $hen agents are a+ dependent on the contract for fiscal survival (+
monitored effectivel' c+ sanctioned for non-compliance and d+ contracts are of the.fi"ed price/ variet'+
Hypothesis 2b: Contracting is more li,el' to enhance the organiational autonom' of
contracted agents $hen agents are a+ not dependent on the contract (+ inade0uatel'
monitored (' the donor c+ are not sanctioned for non-compliance and d+ contracts areof the .cost-plus/ variet'+
Hypotheses 3: Contracting* regardless of t'pe* dissipates the accounta(ilit' ofgovernors+
Hypothesis 4: Contracting erodes trust among glo(al governors* even if previouscooperative ties $ere (uilt upon long-standing and common normative commitments+
Hypotheses 5: The a(ove h'potheses should hold regardless of a glo(al governor1s for-
profit status* issue area* net$or, ties or strength of normative commitments+
Conversel% t/ese claims abo&t t/e transformative effects of contracting wo&ld be
falsified if: t/e terms of a contract did not affect a governor0s incentives and strategic
be/aviorD contracting did not enco&rage com"etition among governorsD contracts did not
"redictabl affect a governor0s a&tonomD contracting concentrated acco&ntabilitD
contracting "arties maintained or en/anced t/eir tr&stD and t/ese contracting "rocesses
differentiall im"acted vario&s sectors of global governance
IV Illustrative Cases: Iraqi Reconstruction and the New u!anitarian Regi!e
2ogic of the Cases
Coole4,-
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To ill&strate some of t/e mec/anisms and /"ot/eses o&tlined above% 9 examine
t/e role of contracting in t/e '#4led reconstr&ction of 9ra? and in t/e contem"orar
international /&manitarian aid sector Alt/o&g/ t/ese disc&ssions can in no wa be
considered ant/ing more t/an anecdotal evidence for some of t/ese claims% 9 /ave
selected t/em wit/ two im"ortant criteria in mind
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"ost4war reconstr&ction '# officials stated t/at allowing t/e "rivate sector to lead t/e
reconstr&ction wo&ld "&t ex"erienced m<inational com"anies in c/arge of t/ese diffic<
"rojects% avoid dealing wit/ corr&"t 9ra?i enter"rises and demonstrate to 9ra?is t/e
ca"abilities and ingen&it of t/e '# "rivate sector Biller -))5: ,,,4,(, According to
!avid Nas/% /ead of t/e coalition0s original Project and Contracting 7ffice% t/e overall
contracting model "romised to be a win4win for American com"anies and t/e 9ra?i
"eo"le Biller -))5: ,,3
IN"#RT $igure % ere
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sector% as well as a conse?&ence of t/e recent trend for states to directl or bilaterall
f&nd NG7 activities Bmore on t/is later 9n -))E% major /&manitarian NG7s received
abo&t K- billion from "&blic f&ndraising% K,-4-) billion from government agenc
contracts% and K3))4)) million in c/anneled f&nds% most of t/em contracts% t/ro&g/ 'N
agencies 7f t/ese% seven or eig/t 9NG7s received t/e b&lk t/is assistance 9n -))3%
1alker and Pe""er estimate t/at abo&t one4t/ird of t/e KE billion state4donor f&nding
ended &" in NG7 coffers% eit/er directl or t/ro&g/ 'N agenc "rojects B1alker and
Pe""er -)).: 3 However% as Table - s&ggests% some NG7s are considerabl more
reliant on external contracts for f&nding t/an ot/ers 9n fact% a few NG7s% t/e most
notewort/ of w/ic/ are 7xfam and decins #ans
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7ne immediate difference between t/e cases lies in t/e level of com"etition
among contractors 1/ereas t/e /&manitarian sector does s/ow signs of significant
com"etition between NG7s for government and 97 grants% s&c/ com"etition was
significantl m&ted in t/e 9ra? case% d&e to "re4standing agreements between major
contractors and t/e '# government and t/e extensive &se of no4bid contracts
Com"etition for contracts /as been a /allmark of t/e /&manitarian sector for t/e
last -) ears Com"etition is most intense in t/e wake of disasters or com"lex
emergencies% w/en b&nc/es of /&manitarian NG7s flocks to a site in t/e searc/ for relief
work T/is tends to concentrate t/e attention of bot/ NG7s and donors on j&st a few
global /&manitarian /ots"ots
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and Afg/anistan% as sc/olars /ave even observed deliberate &nderbidding b NG7s for
"roject contracts in t/ese settings BA!! And alt/o&g/ in t/e wake of t/e Ts&nami in
so&t/east Asia% a wave of "rivate donations red&ced t/e financial im"ortance of
contracting% NG7s nevert/eless intensel com"eted for international media attention and
bid &" salaries for local staff members in order to s"end t/ese si@able earmarked f&nds on
s&itable "rojects BHarris -))5 and #tirrat -))5
7ne meas&re t/at some NG7s are now taking to c&rb s&c/ "otentiall destr&ctive
com"etition is to carteli@e t/e distrib&tion of aid b establis/ing a consorti&m in t/e field
among re"&table NG7s
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contracting o""ort&nities
Contracting and %gent %utonom'
7n t/e iss&e of a&tonom among contracting governors% t/e two cases also reveal
significant differences 9n t/e 9ra? case% t/e ado"tion of cost4"l&s contracts% "oor
oversig/t and a lack of central coordination and management% led to nearl &nc/ecked
a&tonom on t/e "art of larger contractors $ contrast% t/e increasing &se of fixed "rice%
bilateral contracts in t/e /&manitarians sector /as constrained t/e actions and
a&tonom of NG7s% forcing t/em to align t/eir own organi@ational missions and
"riorities wit/ t/ose of donors in order to sec&re and maintain external f&nding
Contracting and A&tonom &nder Cost4Pl&s Contracts in 9ra?
9n 9ra?% major reconstr&ction contractors were initiall too a&tonomo&s 9n
organi@ational terms% contracts were awarded b distinct reconstr&ction f&nction% b&t
contractors lacked an kind of central coordination mec/anism to "lan or even exc/ange
basic information abo&t reconstr&ction "riorities
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overs"ending and overbilling b =$;% t/e largest of t/e reconstr&ction contractors =$;
emerged from t/e war wit/ a m<i4billion dollar% no4bid contract to re"air 9ra?0s oil
infrastr&ct&re and was also contracted to s&""l '# militar cam"s wit/ meals and
amenities According to investigative re"orter C/ristian iller% =$; delivered on its
overall obligations% b&t did so at exorbitant cost Biller -))5 A&dits b t/e !efense
Contracting Agenc% t/e Pentagon0s "rimar oversig/t office% concl&ded t/at t/e
com"an /ad inflated its costs and failed to kee" track of ex"endit&res and reven&es
6xtreme exam"les abo&nd: in one ccle% =$; billed t/e government for K,)) "er bag of
la&ndr it serviced and a""roximatel K-E. for soda "er soldier Biller -))5: ,% (
=$; em"loees re"orted t/at rat/er t/an re"air com"onents of existing e?&i"ment% s&c/
as oil filters in tr&cks% t/e were enco&raged b management to act&all destro t/e entire
"iece of e?&i"ment Bin w/at became known as t/e b&rning "it and sim"l bill for a
re"lacement #everal exec&tives were acc&sed of taking millions of dollars in kickbacks
from s&bcontractors across vario&s "rojects% w/ile t/e com"an was ca&g/t billing K.)
million for a contract t/at /ad been "revio&sl cancelled and was acc&sed of c/arging
K-)) million for meals t/at were never act&all served to soldiers Biller -))5: ,4-
$ A&g&st -))E a !o! a&ditor fo&nd t/at =$; co&ld not s&""ort K, billion in
ex"enses or abo&t E- of t/e KE( billion in bills t/at were reviewed B70Harrow Ir
-))E
#imilarl% a recent re"ort b t/e #"ecial 9ns"ector General for 9ra? ;econstr&ction
on t/e "erformance of $ec/tel Ft/e first com"re/ensive eval&ation of single contractor0s
"erformance in 9ra? Bas o""osed to a "roject F fo&nd t/at t/e com"an onl met ,) o&t
of -E of its original "roject goals% w/ile most "rojects were canceled% red&ced or never
com"leted as designed BGlan@ -)). 7verall% as of A&g&st -)). Pentagon ins"ectors
were still investigating ab&se and corr&"tion in abo&t K5 billion wort/ of militar
contracts% most of t/em for s&""lies BT/om"son and #c/mitt -)).
1/at led =$;% $ec/tel and ot/er '# contractors to act in s&c/ a blatantl
a&tonomo&s and o""ort&nistic manner2 Above all% t/e &ncertaint of t/e "ost4conflict
environment% t/e lack of oversig/t and t/e cost4"l&s contracts gave ever incentive to
t/ese com"anies to inflate costs and ind&lge in excesses wit/o&t fear t/at '# reg&lators
Coole4,*
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wo&ld sanction t/em As arie de+o&ng% a Hallib&rton em"loee in =&wait observed of
t/ese contract&al incentives and lax monitoring% t/ere was t/is w/ole t/o&g/t "rocess
t/at we co&ld s"end w/atever we want to beca&se t/e government won0t crack down in
t/e first ear of a war T/e /ave no incentive w/atsoever to be "r&dent 9t0s cost "l&s
Biller -))5: , !es"ite n&mero&s critical re"orts% neit/er t/e Pentagon nor t/e CPA
seemed concerned wit/ reigning in excesses or "&nis/ing offending contractors% w/ile
Congressional oversig/t into t/e iss&e was minimal
Contracting and A&tonom &nder
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and c<&res of man NG7s B#milie and inear -))(: 5
9t is t/erefore diffic< to disentangle t/e organi@ational effects of bilaterali@ation
on /&manitarian NG7s from t/ose of "roject contracting% as t/e former /as bro&g/t m&c/
more of t/e latter Nevert/eless% bilaterali@ation% from t/e donor0s "ers"ective% is
effective to a large degree beca&se states now directl can &se f&nding as a mec/anism of
control
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T/e now infamo&s Ab& G/raib and $lackwater scandals bot/ drew attention to
t/e lingering acco&ntabilit iss&es raised b t/e "ersistence of contractor imm&nit 9n
bot/ cases% neit/er t/e 9ra?i government% wit/ allegedl sovereign a&t/orit% not t/e '#
government /eld contractors acco&ntable for t/eir actions 9n t/e case of Ab& G/raib%
abo&t one /alf of t/e interrogators involved in t/e "rison ab&se scandals were /ired as
contractors b t/e firms CAC9 and Titan% as t/e former /ad been given t/e "rison contract
as a follow4on to its "roject to extract data from 9ra?i government information sstems
None of CAC90s civilian contractors were c/arged or "rosec&ted for t/eir role in t/e
scandal #imilarl% t/e $lackwater e"isode of #e"tember -)).% in w/ic/ a team of
sec&rit g&ards contracted to "rotect '# #tate !e"artment "ersonnel allegedl o"en
fired on a gro&" of 9ra?i civilians% killing ,5 in t/e "rocess% "rom"ted t/e 9ra?i
government to tr to terminate $lackwater0s contract and revoke t/e imm&nit g&arantee
for foreign contractors Aro&nd t/e same% '# federal a&t/orities anno&nced t/at t/e
were investigating allegations t/at $lackwater em"loees /ad &sed t/eir "ositions in 9ra?
to sm&ggle arms
T/e fragmentation of acco&ntabilit is also a major concern in t/e /&manitarian
sector As in t/e reconstr&ction case% it remains &nclear w/ere act&al res"onsibilit for a
"roject lies among t/e vario&s contracting NG7s and donorsE" postinvestigations into
acc&sations of wrongdoing or misa""ro"riation once f&nds /ave been dis"ersed are
diffic< and b&rdensome for all "arties involved 9nterviewed officials w/o work in t/e
/&manitarian sector admit t/at s&c/ investigations are ver rarel% if ever% &ndertaken 7n
t/e ot/er /and% in some settings some degree of coll&sion among donors% contractors and
"roject targets seems to be sstematicall tolerated #ome /ave even arg&ed t/at t/e
"arties involved in t/e contracting sstem /ave few incentives to t/oro&g/l investigate
allegations of financial irreg&larities or errors in t/e field
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international aid "resence 9ndeed% citing a recent article b ic/ael 1rong of t/e '=
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t/e relations/i" between actors in t/e /&manitarian network Among NG7s% t/e scramble
for relief contracts /as led to com"etitive be/avior over "roject contracts and t/e
&nwillingness to exc/ange even t/e most basic information abo&t t/eir activities and
"lans in t/e field 8arr inear and 9an #mile fo&nd t/at t/e /&manitarian sector is now
c/aracteri@ed b mistr&st and o"a?&eness and b a s&r"rising degree of s&s"icion and
reci"rocal anti"at/ between donors and NG7s Binear and #milie -))(: -
9nevitabl% man of t/ese iss&es are bro&g/t &" in t/e context of a disc&ssion abo&t t/e
need to im"rove aid coordination% a to"ic t/at remains &bi?&ito&s in t/e ind&str
literat&re However% w/at ver few "ractitioners acknowledge is t/at t/e contracting
sstem itself ma str&ct&rall in/ibit effective coordination and ma act&all erode t/e
ver tr&st necessar to im"rove it ax #te"/enson0s overview of /&manitarian
coordination and t/e develo"ment of inter4organi@ational tr&st observes t/at% as for
commitment4 based tr&st% if a coordinator m&st rel on Ot/e contract0 to sec&re
coo"eration and coordination% it seems likel t/at matters between t/e organi@ations /ave
descended to a diffic< "lace B#te"/enson -))3: (E3 $&t if t/e t/eoretical analsis
advanced in t/is "a"er is correct% it is t/e ver contract itself t/at ma be eroding tr&st
wit/in t/e /&manitarian network 9t is &nlikel% t/erefore% t/at tr&st can be generated in
addition to or on to" of t/ese formal contract&al relations/i"s
T/ese inter"retations are s&""orted b st&dies of contracting and t/e develo"ment
of tr&st in ot/er emerging areas of global governance
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inse"arable from t/e actions and strategies of governing agents
T/e terms of contracts "rovide incentives for actions and act&all transform t/e
internal "riorities of organi@ations As t/e cases of 9ra?i reconstr&ction and t/e
international /&manitarian sector s&ggest% s&c/ incentive4based be/avior also can affect
t/e networks and relational ties between global governors T/ese cases indicate t/at t/e
t"e of contract and oversig/t can /ave differential effects on t/e a&tonom and t/e
com"etitive be/avior of governors However in bot/ cases% t/e &se of contracting was
fo&nd to dissi"ate t/e acco&ntabilit among governors and erode tr&st 7f co&rse% t/ese
findings ma not travel to all instances of global governance and f&t&re st&dies s/o&ld tr
to discern t/e act&al effects of contracts in individ&al sectors b com"aring t/e be/avior
of governors o"erating on contracts wit/ t/ose w/o don0t
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needs to be m&c/ more extensivel anal@ed b sc/olars and "ractitioners alike
Coole4-5
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References
Axelord% ;obert ,*E The Evolution of Cooperation New +ork: $asic $ooksAvant% !ebora/ -))5 T/e 9m"lications of arketi@ed #ec&rit for 9; T/eor: T/e
!emocratic Peace% 8ate #tate $&ilding and t/e Nat&re and
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8/13/2019 Cooley IGIS 1
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Co&ntries%#ealth Polic' and Planning Jol ,(% No ,: (-4E)70Harrow Ir% ;obert -))E A&ditor Critici@es 9ra? Contract 7versig/t: Hallib&rton
'nit
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Hartford% Conn: =&marian1ang% #/aog&ang -))5 one A&tonom: Patterns of Civil #ociet