The CPD Blog is intended to stimulate dialog among scholars and practitioners from around the world in the public diplomacy sphere. The opinions represented here are the authors' own and do not necessarily reflect CPD's views.


The Privatizing of American Power – An Issue Americans Can’t Afford to Ignore

Mar 29, 2011

As our attentions are increasingly focused on the Middle East, deficit reduction, spending and job creation…one issue that receives little attention but is inextricably linked to each of these critical issues is the mass privatization of American power. We are exploring this theme in my Corporate Diplomacy II course this spring, the inspiration of which came from the work of international relations scholar Allison Stanger, Director of the Rohatyn Center for International Affairs at Middlebury. Stanger, who recently appeared on The Daily Show, is the preeminent expert in U.S. government privatization trends, particularly in the areas of foreign policy and defense. Her book, One Nation Under Contract: The Outsourcing of American Power & The Future of Foreign Policy is essential reading for every elected official and any American seeking a better understanding of where our taxpayers’ dollars are spent overseas.

It is important to note at the outset that one of her primary conclusions is that “Outsourcing done right is, in fact, indispensable to America’s interests in the information age.”

Additionally, Stanger makes three arguments in One Nation Under Contract:

  • The outsourcing of U.S. government activities is far greater than most people realize, has been very poorly managed, and has inadvertently militarized American foreign policy;
  • Despite this mismanagement, public-private partnerships are here to stay, so we had better learn to do them right;
  • With improved transparency and accountability, these partnerships can significantly extend the reach and effectiveness of U.S. efforts abroad.

Further detailed findings can also be found in Stanger’s testimony last summer to the Senate Budget Committee. Be forewarned, this reading is not for the faint at heart. Don’t say I didn’t warn you. This opening paragraph really hits at the heart of the issue…

Despite this paradigm shift in how government conducts its daily business, contracting continues to be perceived as something peripheral to policy itself rather than wholly comprising it. When contracting and grants comprise 83 percent of the State Department’s requested budget, as they did in 2008, 82 percent of the Pentagon’s budget and a whopping 99 percent of USAID’s net cost of operations, this is clearly no longer the case. In the foreign policy realm, with America’s first two contractors’ wars in full swing, contracting has become a clear strategic issue. It must be treated as such.

As a former civil servant FTE (full-time employee, direct hire) with the State Department and someone who has been an advocate for public-private partnerships and corporate diplomacy through my work with Business for Diplomatic Action, I deeply appreciate Stanger’s findings and call to action. I am also in violent agreement that there needs to be a candid public discussion about how we fund and execute foreign policy and fight wars. Stanger has been trying to raise the issue for years; I hope people are finally listening. She is a pioneer. Maybe now that her work has been featured on The Daily Show we might actually all pay attention. This is an issue we can no longer afford to ignore.



Excellent posting Cari. I remember well Allison’s presentation at a Business for Diplomatic Action advisory board meeting which prompted to me to purchase her superb book. You’ve inspired me to review some its chapters! Like you, I believe there is indeed a positive and constructive role for outsourcing done right--and surely much is done right--but I have personally seen many examples of waste (mostly in the form of overpriced services) and inadequacies. What particularly struck me when I started to become exposed to US government (DoD, DoS, USAID) international RFPs was how often egregiously erroneous and misguided assumptions upon which the proposals were to be premised, found themselves in the RFPs. In bringing this to the attention of the government client, I discovered that this was because RFPs are often written by people in procurement with little knowledge nor understanding of the scope. And a vicious circle ensues: few contractors are inclined to point out the fallacies for fear of jeopardizing their chances of securing the contract, and thus flawed tactics, methodologies and understandings find their way into US-funded foreign policy-based initiatives.

Outstanding summary which represents the byzantine parable in which we are headed. I always enjoy your writing Cari!

I shuddered when I read your words Cari, I guess I was trying to forget. I worked for USAID last year. I had the most inspiring mission and projects to fulfill, however within just days, I found myself being mentally and verbally abused by the manager of the project! Finally after 2 months, out of self preservation, I had to resign! I was not the only one. My non American manager absolutely ruined our (American) diplomatic relationship with hosts of the country we were suppose to helping. While I know this is not the norm, I think nothing put it in perspective for me as to realize we have so many talented and worthy Americans who can do the job. USAID representing billions of dollars of US Tax dollars, should be the first place we demand that all contractors are American.

Thanks for this. I have not read Professor Stanger's book, but I will now. She is surely correct that objective examination of this question is overdue. My own experience is limited to the Department of State, where I worked as a contractor for several years. I found little to distinguish the hard work, dedication and energy of fellow contractors from our Federal employee colleagues, but I also found that State has done an inadequate job of managing this blended workforce. And the numbers can be daunting. The Bureau of International Narcotics and Law Enforcement, for example, has some 6500 employees, most deployed overseas. Of that number, fully 5,000 are contractors.

Excellent observation Cari, thank you. It seems we are playing "Ostrich" Politics and wish not to know about the mismanagement of the various arms of the government. Unfortunately the word 'contractors' has received a bad reputation after the various horrors of Afghanistan...and we only know little what really is happening. I heard a most interesting observation, titel: "One Nation Under Surveillance, a new social contract to defend freedom without sacrificing liberty." It takes courage to speak up about the 'wrongs' even in this Nation.

Email Comment received from Camille Lavington:

Dear Cari,

Another home run!
Cari, you are so articulate that readers will better understand the issues. Privatization has come about because of many errors in policy. Go back to first base and consider how the unions and defense contractors have overstepped their boundaries. Somehow, our foreign allies are standing at our welfare doors with their hands out and offer little in reciprocation. We need a balance and better transparency all the way around.

Congratulations on this blog.

This is a wonderful piece on privatization. I am working on a more general version of the privatization of American government and our ailing democracy and this is something I have been saying for some time. I feel validated with substantial SUBSTANCE!

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