A New Agenda for Aid, Trade and Investments? A study to a paradigm shift in development policies and the role of international organizations

A New Agenda for Aid, Trade and Investments?

A study to a paradigm shift in development policies and the role of international organizations

Master Public Administration, specialization International Governance

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Preface

Dear reader,

You are reading my thesis for the Master Public Administration, specialization International Governance. This thesis is the end of my Master and the end product of my studies at Leiden University.

Before writing my thesis, I had different research plans than the research presented in this thesis. Development policies have my interest for a very long time, in special the international influence on the domestic development policies in the Netherlands. However, it was very difficult to formulate a solid research question and to perform research to this subject, due to the long time span and the complexity of the international policy field.

After reading and doing research, the topic changed to the shift in Dutch development policies to ‘Aid and Trade’ in development policies. The international aspect came back as the possible cause of the policy change.

Also the political background of the documents and the position of the civil society in this process are taken into account, both specific areas of interest. My bachelor thesis I have written about lobby and advocacy of non-governmental development organizations and in February I start as an intern on the department of Direct Social Development at the Ministry of Foreign Affairs, a department that works with Dutch development NGOs. A chance to have work experience in the field of Public Administration.

The process of writing was a learning process for me. I have enjoyed writing my thesis and exploring possibilities of academic research, such as conducting interviews with people with views and perspectives on the current development policies. I want to thank all the respondents for their time, knowledge and expertise that they have shared with me.

Also I want to thank my supervisor, dr. Maarja Beerkens for the clear and excellent supervision during the process and the useful advices.

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Content

Preface 3

Content 5

Chapter 1 Introduction 7

Chapter 2 Theoretical perspective: Policy change, paradigm shift and international

policies 11

2.1 Domestic politics, civil society and public policy 2.2 Incremental and radical changes

2.3 Paradigm shift

2.4 International organizations and policies 2.5 Policy Transfer

Chapter 3 Methodology 22

Chapter 4 WTO, Political Background and Development Policies 26

4.1 WTO

4.2 Dutch political context and political background of the three documents 4.3 Content of the three Dutch development policy documents

Chapter 5 Analysis I 38

5.1 Domestic policies and the creation of the policy documents 5.2 Change in policy goals and policy instruments

5.3 Change in discourse 5.4 Paradigm shift

5.5 Reactions of respondents on the shift to ‘Aid and Trade’

Chapter 6 Reasons for change 52

6.1 Table with collected reasons for change 6.2 Reasons given by the respondents

Chapter 7 Analysis II 58

7.1 The role of international organizations

7.2 Political influence, crisis in policy and the role of the civil society

Chapter 8 – Conclusion 63

References 67

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Chapter 1 Introduction

“For many people economic poverty is rooted in their inability to trade – and trade is a vital route out of poverty.”

(Trade Matters; DFID, 2005)

The Dutch government has produced and still produces many public policies and programmes which are constantly changing and adopting new approaches. The Dutch policymaking process and decision-making process is characterized by the involvement of many actors. The policymaking process is described as ‘an orchestra with no conductor’, due to the many actors and the fragmentation of the Dutch political arena (Gladdish, 1991:144). The Dutch political arena is characterized by a country of minorities, multi-party system, coalition government, strong parliamentary committees in a bicameral parliament, strong position of interest groups and an extensive bureaucracy (Andeweg and Irwin, 2009:169).

In the above listed actors that characterize the policymaking process, the international arena and the participation of the Netherlands in international organizations is not included. However, a lot of Dutch policies contain elements that are designed on international level. Dutch policies are influenced by ideas, thoughts, norms and policy programmes that are created within and promoted by international organizations. These ideas, thoughts, norms and policies can be accepted by domestic governments through different forms of legislation and decision-making procedures. In special policies related to global issues are highly influenced by international interference (Finnemore, 1993).

An example is the Dutch development policies. The Sustainable Development Goals, the successors of the Millennium Development Goals which are promoted by the United Nations are embedded in several policy documents (Koenders, 2007; Ploumen, 2013a).

An example of a discourse that is promoted internationally and is accepted in Dutch policies, is the discourse of ‘Aid for Trade’, or ‘Aid and Trade’. In 2005, the World Trade Organization, (WTO) launched an initiative that is called ‘Aid for Trade’. Aid for Trade was a new initiative, promoting that donor countries will give aid to stimulate economic growth and trade in developing countries with the goal to reduce poverty. Donor countries support the enabling environment in developing countries to contribute to the possibilities of trade between developing and developed countries. This can be done through practical programmes such as infrastructural projects, as well helping to create adequate trade-laws and regulations.

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The WTO is working on a better and more effective trade environment in developing countries (WTO.org, 2015).

The WTO has actively promoted this new initiative with its principles in the international arena. In the evaluation report of the WTO on Aid for Trade from 2015, the Netherlands is on the top-20 list of countries which have committed money for Aid for Trade (Roodenburg, 2015).

‘Aid and Trade’ in development policies has to become the leading trend in developing policies, as shows the quote above this introduction of the main English Aid organization DFID. Also in the Netherlands, ‘Aid and Trade’ is embedded in development policies. However, the Dutch development policies are subject to discussion and criticism from political parties and society for years. ‘It does not help’ and ‘money is wasted’ are commonly heard criticisms. New development policies will lead immediately to new discussions and debate in politics and society (De Wal, 2009:16).

The major development policy stream for development policies is set out by the responsible Minister or Secretary for Development. After every election, a new Minister or Secretary publishes a visionary document to present his or her policy for the coming years. Since 2012, Minister Ploumen is the Dutch Minister of Foreign Trade and Development Cooperation. Before, there was a Minister only for Development, based at the Ministry of Foreign Affairs. The portfolio of Foreign Trade belonged to the Ministry of Economic Affairs. After the 2012 elections, a new Minister Post was created, including the combination of development and trade, with a Minister of Foreign Trade and Development Cooperation (Parlement.com, 2015c).

The combination of foreign trade and development is not only presented in her new title. The main policy document of Minister Ploumen is called ‘A World to Gain: A New Agenda for Aid, Trade and Investment’. In this document, a strategic plan is presented for foreign aid and trade for the next four years, 2012-2016 (Ploumen, 2013a).

Minister Ploumen presented her development policy document as a ‘new agenda’ with a lot of attention on the private sector as instrument in implementing development policy. Trade and capacity building of businesses in developing countries is seen as the solution for least-developed countries, with the help of Dutch businesses. The element of trade is fully embedded in the Dutch development policies. The new policy document ‘bridges the gap between aid and trade’ (Ploumen, 2013b:4).

Minister Ploumen sees ‘Aid and Trade’ not as a zero-sum game or an approach whereby the Netherlands will benefit and the developing countries will be disadvantaged. In

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her opinion, the combination of aid and trade will benefit both the original ‘donor country’ and the ‘recipient country’, the developing country (Ploumen, 2013b:4).

‘Trade as solution for poverty’ is an old discourse, and not a new idea of the WTO. Over decades it is argued that the economic development of a country raises the level of prosperity and welfare of the people. Also in development policies economic development has got a lot of attention over the years in programmes and policy documents. However, aid in previous approaches was still given through the ‘traditional form’, mostly by donating money to the governments (bilateral aid) or programmes of international organizations or non-governmental organizations (NGOs) (multilateral aid) (NCDO, 2012:1).

For example, in the early 1990s, liberalization was the major policy stream in the development sector. The focus was on the economic development of a country; however, there was not much attention for foreign investments in the enabling environment or for the state’s responsibility to create trade-laws and regulations. Governments were neglected and had to be as small as possible, because they were seen as opponents of trade. This is different in the ‘Aid and Trade’ approach (idem).

The title of the new policy document implies that the agenda of Minister Ploumen is new and that radical changes have taken place in development policies. However, some people are arguing that the new agenda is a way of ‘framing’ to be convincing and that there was no significant change in development policy (Ruimschoot, 2013). The discourse used can be very strong in presenting policy in a certain way. In studying policy change, ideas can be the independent variable, as a force that causes change. It can also be the phenomenon to be explained.

As explained above, in studying change development policies it is also important to take into account the international arena. The discussion on the influence of international organizations on domestic policies is on-going under academics and according to some authors, underestimated (Finnemore, 1993; Schmidt, 2002).

The focus of this research lies in the shift in the Dutch development policies to a new agenda with ‘Aid and Trade’. To see if the policy change to ‘Aid and Trade’ is ‘new’ in the agenda of Minister Ploumen or that this approach is continued from previous policies. In academic literature on public policy, a lot of research is done on policy change and to the reasons for change. Two major approaches that are used often to explain policy change are incrementalism and punctuated equilibrium. Hall (1993) has used these two approaches to develop his theory on first, second and third order changes. Third order change is a radical change, a paradigm shift. A paradigm shift is characterized by change in policy goals, policy

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instruments and policy image, or the redefinition of the policy (idem). In studying policy change, the role of the international organizations often is neglected. Due to the international agenda of this development policy, also the role of the international organizations as influencers of change is taken into account. These two research areas together lead to the following research question:

Is the shift in Dutch development policy to a new ‘Aid and Trade’-agenda (2013) as a paradigm shift and what was the role of international organizations in this change?

Whether the change in development policies can be explained as a paradigm shift will be analysed with a content analysis of the three last main Dutch development policy documents from 2007, 2010 and 2013. They are compared and analysed on policy goals, policy instruments and policy image. These documents are illustrated with the political background at the time of the publication of the document.

The second part of the question is specified on the role of international organizations in influencing policy change. To respondents, civil servants and political advisors, is asked what caused the policy change to an ‘Aid and Trade’-agenda.

Chapter two of this thesis presents a theoretical overview. Besides the focus on literature on policy change, also literature on international organizations and their way of policy diffusion is added to the academic framework. Also the role of ideas and discourse in policy change is taken into account. Chapter three explains the research methods and presents issues on reliability and validity. Chapter four describes the case, background information and gives an elaboration on the content of the three policy documents. Chapter five contains the analysis on the policy change process and paradigm shift. The sixth chapter presents a scheme with the reasons given by the respondents, and a section of quotes where the respondents explain their given reasons. Chapter seven is the analysis of the reasons for the policy change to an ‘Aid and Trade’-agenda. Because of the two-part research question, this thesis has two analysis-chapters. The thesis ends with one concluding chapter where the answer on the research question is presented.

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Chapter 2 Theoretical perspective: Policy change, paradigm shift and

international policies

This chapter presents an overview of academic literature on public policy change. Policy change is explained by literature on domestic public policy, small and big policy change and the role of discourse in policy change. The focus will be on the concept of paradigm shift. Also factors that can influence policy change such as civil society, political tensions and international influence are taken into account. International influence is interpreted how institutions generate and diffuse ideas and policies into the social environment of their members, different countries (Finnemore, 1993; Schmidt, 2011; Somers and Block 2008).

The theoretical approach tries to bring together policy change, the role of discourse in presenting the policy image and the diffusion of policies of international organizations to their members. In the first section will be elaborated on domestic politics, civil society and the cycle of the policy process. The second section will focus on two models of policy change, incrementalism and punctuated equilibrium. The third section focuses on the role of ideas in policy change and discourse to present the policy image. The fourth section explains policymaking in the international arena nowadays and the following fifth section explains the concept of policy transfer from international organizations to their members

2.1 Domestic politics, civil society and public policy

In studying public policy, the domestic context is very important. The domestic actors involved in the policymaking process can be divided in political and societal actors. Political actors are often influenced by societal actors that want to push their interests into the political arena (Milner, 1993:19).

From this division of Milner, these two groups of actors are important in policymaking process. The political actors are divided into executive and legislative actors. In domestic politics, the executive and the legislative are playing different roles in relation to decision-making- and the policymaking process. Executive actors are the government or the cabinet led by a Prime Minister or President, as well the ministries, organizations and departments supporting this government.

Milner (1993:33-35) assumed that the executive actors act rational, they want to maximize their utility, which depends on re-election. Therefore, they will mostly choose

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policies that stimulate national economy and the interest of the interest groups. Also their support of international policies relies on these criteria.

Besides the executives, also the legislative actors are assumed to be rational. Their goal is to maximize their utility through the work of their office. In practice, they have to have the same interests as the executive actors; however, they may prefer different policies. In parliamentary systems, the differences in preferences are less likely, because the executive is chosen by the legislature (idem:36)

The second group of actors are the societal actors. These actors have their place in the civil society. The civil society is one of the three institutional areas that most countries characterized, together with the state and the market. The civil society is the third sector, the non-profit sector. Organizations operating in the civil society have a non-profit character. They have, in contrast with the market sector, not as goal to gain profits. Between these three institutional areas is a combination of decisions, interests and teamwork, called mutual influence (Dale, 2000:45; Yaziji and Doh, 2009:3).

Most of the societal actors are interest groups. Milner (1997:37) assumed that every interest group behaves rational. They want to have as much influence as possible in politics and policies. Interest groups will promote policies from international organizations only if that promotes their own interests. Societal actors can play two roles in the adaption of international influence and the acceptation of (international) policies. First they can put pressure on domestic policy makers and domestic political actors to adopt or reject policies. Also they are valuable in providing information to political actors about the policy externalities and the policymaking process (idem: 60).

New public policies are the result of a long decision-making- and policymaking process that is summarized in the model of a policy-cycle. This cycle starts with the agenda-setting of the new policy themes, and then continues with policy formulation. The legitimation of policy comes before the implementation, because there must be agreement about the policy. The implementation is followed by an evaluation, which will show whether or not the policy will be maintained as a success or will be terminated (Cairney, 2012:34).

This policy cycle, presented in figure 1, is a simplification of the policies process in real life. The figure gives an overview of the different stages of the policymaking process. A lot of different actors are playing a role within the processes of policy change. Also the context of the policy, the institutions involved and the role of ideas have to be taken into account while studying public policy (idem).

13 2.2 Incremental and radical changes

Policy change is often studied in analysing the ‘sort of change’. Big change, small change or whether or not the change came spontaneous or it was triggered by external actors. A distinction that is often used in studying change is the distinction between incremental or radical change. With incremental changes, the policy changes over time with small adjustments. This approach to study change is called incrementalism. Incrementalism shows that policy makers are much more likely to make small changes in the current policy than to introduce major new policy initiatives. An advantage of incremental changes is the safety for policymakers that small changes can only lead to small policy failures. Small changes reduce the chance of big mistakes and the effects of small changes are easy to measure. Another advantage is the assumption that small policy changes are more democratic than introducing a major new policy plan. Lindblom describes incremental changes in his studies ‘muddling through’, a process of small changes at the time without a clear policy goal (Lindblom, 1959:86).

Lindblom (1965) argues that policy-making is not a hierarchical and central process, it depends on ‘partisan mutual adjustment’. This is a process of negotiation, bargaining and compromises between different policy-makers and other actors involved in policymaking.

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According to Dror (1964:154), the approach of incrementalism only holds if three conditions are met. First, the existing policy is broadly satisfactory and accepted. Secondly, the nature of the policy has not changed in itself and thirdly, there have been no changes in the means and instruments to solve the problems addressed by the policy. These three conditions are not met in times of crisis, political instability, when approaches towards policy goals change or when new technology requires policy change.

Lindblom (1979:517) argues in his later work that incremental change can consist of small or large changes. He defends the point that the approach of incrementalism is conservative, because in the end incremental changes can be innovatory and seen as a large change. The crucial distinction between the two is the departure of change. Does it follow on the existing policy or is there another significant departure mark? Lindblom argues that “logically speaking, one can make changes in the social structure as rapidly through a series of incremental steps as through drastic alterations” (idem).

For policymakers it is easier to select options which may appear conservative and have a significant radical effect in the end. Short-term continuity can be a mask for long-term change. Therefore, policymakers need to be aware of a long term strategy before starting with the small incremental changes (idem).

However, according to Atkinson (2011), Lindblom missed in this approach the institutional interpretation of the conditions that ask for incremental changes or a more radical change. Lindblom assumes that policy is made in the depth of bureaucracy; however, he seems to forget that institutional influences also can influence the policy process.

The second approach that is often used to study policy change is the approach of ‘Punctuated Equilibrium’. According to this theory or approach, policies can stay for a long time the same and then change very quickly and dramatic. The punctuated equilibrium theory tries to explain the long periods of stability and short periods of heavy changes. Policy change can undergo incremental changes for decades followed by a radical change that set total new directions (Cairney, 2002:175).

The concept ‘equilibrium’ refers to stability as the result of balance of power in government that supports the policy and enforce the status quo. ‘Punctuation’ refers to the radicalness of the policy change. A ‘punctuated equilibrium’ appears after the successful promotion of the new policy image. One reason for the changeability of policy can be the presence of policy entrepreneurs. Policy entrepreneurs are actors that push for one policy solution above others or propose their concerns about the current policy at the right moment (Kingdon, 1979). Both approaches are compared in table 1.

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However, also the presence of an institutional policy venue can cause policy change. Policy venues are institutional arenas were decisions on policy issues can be taken. These policy venues often have an alternative policy image that they try to sell (Kingdon, 1984).

Issue attention is very important in radical change. This new policy image could arise after a crisis or a triggering event. Another name is focussing event. It is an event which catches the attention of the politicians, policy-makers, interest groups or the public. The event gives the opportunity to introduce new policy ideas, policy images or other radical policy changes.

Most important is the role of the policy image, the way in which policy is defined, understood and discussed (Baumgarter and Jones, 1993:31).

Incrementalism Punctuated Equilibrium

Change is seen as Small steps, logical follow-up of current policy. No change in policy image, instruments or goals

Radical change with new policy image, instruments and goals

Change is caused by Policy learning with shows improvements

Focussing event, crisis in current policy

Advantages Democratic, preventing major policy failures

Through the crisis, there is need for new policies

Different view Small changes can be in the end major change, with less policy failure

Role of policy image / discourse is very important

Not taken into account

Institutional tensions Radical change can cause major policy failure

Table 1: Incrementalism vs. Punctuated Equilibrium (Lindblom, 1965; Cairney, 2012:175).

2.3 Paradigm shift

The role of ideas is really important in studying policy change. Ideas are produced and promoted by different actors, such as political actors and decision makers. The policy ideas present the policy image. Ideas are very powerful in framing policy. Studying ideas can be divided in two ways. First, the role of ideas as the independent variable; as a force on their own. This is often used in studying the effects of ideas. Second, the role of ideas as a dependent variable, as the phenomenon to be explained. This is used when you are trying to explain a certain idea in itself (Cairney, 2002:221).

In this second way of studying, framing is a way in which policymakers try to seek support for the policy. Framing is presenting the policy in a way that gains public support. If a

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policy is sensible or criticized by the public, the trick is to frame the policy in a way that in general everyone agrees (idem:185-186).

The role of ideas in policy change is studied and analysed by Hall (1993:279) who divided changes into first, second and third order changes (table 2). First order changes are small, incremental changes. The current policy is based on previous policies and the overall policy goals are staying the same. The only thing that changes is an adjustment in policy instruments, while these instruments stay the same. The ideas of the policy do not change compare to the previous policy. In this situation, policy makers or civil servants are resisting pressure from outside or there is no interest in the specific policy.

Second order change is also related to previous policies. The overall policy goals stay the same, only minor changes in goals will occur. The policy instruments to implement the policy also stay the same. By these changes the outside interests are more involved and their views are taken into account. By second order change also the ideas of the policy stays the same.

The third type of change that Hall (1993) distinguishes is a rare type of policy change. In this third type of policy change, ideas play a major role. Where first and second order policy change are seen as ‘normal policymaking’, third order change is seen as a radical policy change. Third order change is characterized by the emerging of new ideas that change the policy completely. This is called a ‘paradigm shift’. The policy changes in a way that is a major departure from the manner policymakers normally would think of. Not only the policy goals and the policy instruments change, also the whole idea or image that is related to the policy, changes (idem).

A paradigm shift is characterized by the change in policy goals, policy instruments and policy image. Policy goals are the reasons why a policy is formulated. There is a certain problem in the field; the policy addresses that problem and present goals as guidelines to achieve the solution for the presented problem. Policy instruments are means, measures or techniques that are selected to attain the selected policy goals of the policy document. Policy instrument is a collective concept for all actors, measures and techniques that are selected to attain the policy goals. The policy image is the softest concept of the three elements that characterized a paradigm shift. It is not assignable or clearly visible in the policy document. The policy image is the image that is presented throughout the policy, the underlying ideas that are formulated in a specific discourse (idem:276-278).

17 First order change Second order change Third order change Basis Based on previous

policy

Based on previous policy Based on crisis, new ideas or paradigm Actual change Adjustment of policy instruments Change in policy instruments, goals stay the same

Paradigm shift: new policy goals, policy instruments and policy image; policy is redefined.

Caused by Self-reliance Outside interests are taken into account

Existence of new policy, crisis, new ideas in public arena or technical innovations

Table 2: Change according to Hall (1993)

Third order change can also be characterized as an ideational change. Ideational change does not occur immediately or spontaneous and ideational change is not easy to establish. According to Somers and Block (2005:266) ideational changes are rare and there has to be a crisis under the present regime which creates opportunities for new ideas. Not all new ideas are able to undermine the causal power and are able to change the ideational regime of an organization or society. Ideas are not equal in importance, urgency or interest. In their study to understand the rise of market fundamentalism, Somers and Block compared two paths-of-change from welfare regime to new laws on market-driven regimes towards the poor-laws. Research shows that a different approach of presenting and defining the policy-ideas can cause more public acceptance.

Not all radical changes are shifts in paradigm. Even that not all paradigm shifts are radical changes. Also incremental changes can lead to a paradigm shift, if in the end the policy is different than it was before the incremental changes. However, related to the period of time, academics are arguing whether or not a paradigm shift can occur through incremental changes or that it is a more radical shift in policy ideas (Schmidt, 2011:111).

The outcome of a policy change can depend on the political debate, the arguments of competing factions and the positional advantages in the institutional framework. Politicians have to face different opinions from interest groups and experts and have to decide and trust their knowledge in order to take a decision about matters of often technical complexity. Besides the political discussion, also policy failure or the results of policy experimentation can play a role in moving from paradigm (Hall, 1993:280).

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A change in discourse can open the regime for a radical change. A discourse is “a specific ensemble of ideas, concepts, and categorizations that are produced, reproduced, and transformed in a particular set of practices” (Hajer, 1995:44). Another definition of discourse is focus on the legitimacy and support for the programmes related to the policies: “whatever policy actors say to one another and to the public more generally in their efforts to construct and legitimate their policy programs” (Schmidt, 2002:169). A discourse is a set of ideas phrased in a certain way that it maximizes its legitimacy and utility.

Policymakers or entrepreneurs often use discourse to persuade the other actors in the policy arena. There can be hold different discourses as alternatives of the current programmes. The discourse that solves old concerns or new problems with new policy instruments without changing the policy objectives; is mostly seen as the best new discourse (idem: 224).

According to Schmidt and Radaelli (2004:210), discourse is an important factor in explaining the changes in policy-preference. They argue that the use of discourse helps to close the gap between the structure and the agency and that it explains how actors in different contexts can be persuaded to agree with the policy change. The use of discourse can be helpful to find legitimacy in politics and society for the change of certain policies. Discourse can be used to frame an issue in a particular way.

In using discourse in order to change policies, the setting is very important. In institutional setting, the agents are very important. Agents are persons that controlled the discourse. Discourse is the way of communication of the agents. Within their institutions, they present their ideas and have interactions. They spread their discourse in many directions, to gain more support and make the discourse recognized (idem:121).

The use of discourse can be summarized in the approach of discursive institutionalism. This is an analytic framework in with which the ideas and interactions about policy themes can be understood in their institutional context. Political actors, societal groups and bureaucrats could be involved in the interactions within a discourse about specific policies. The institutional context is not only important for the meaning-based logics of communication, also for the power and position of formal institutions (idem:121-122).

Change in discourse is a way to interpret and to understand the transformal or incremental policy changes and the levels of change like ideas, policy or programmes. The specific discourse may go top-down from international, supranational or national actors as well from the bottom-up, from civil society and societal groups (idem:122). The role of international organizations and the promotion of their policies are explained in the next section.

19 2.4 International organizations and policies

The influence and dynamics between international organizations and their members, states, is a consequence of globalization. Globalization is known as “the process in which the world moves toward an integrated global society and the significance of national borders decreases” (Zürn, 2013:402). From globalization derives the concept of ‘global governance’. Global governance regulates problems that reach beyond borders, which asks for collective decision-making (idem 408).

In order to coordinate these problems, nation states are working together in international organizations. Norms, rules and policies developed by the higher level can be implemented by decentralized units, the members of the international institutions. The process of the coordination of different policies can differ per issue and judicial aspect. In the international cooperation, actors have mutual policy adjustment as goal (idem:411-412; Milner, 1997:9).

The definition of Kooiman (2003:3) is relevant in understanding the complexity of the globalized policy field. He stated that “governing issues generally are not just public or private, they are frequently shared and governing activity at all levels (from local to supra-national) is becoming diffused over various societal actors whose relationships with each other are constantly changing.”

The challenge is to work with blurring boundaries between formal and informal power, influential actors and the diffusion of policies in the globalized context (Cairney, 2012:154-155).

There are scholars who argue that globalization and the influence of international organizations leads to a convergence of policies among countries. They assume this because policies of international organizations are often made with the help and approval of the member states. Also these policies are sometimes binding for their members to implement (Jahn, 2006:402).

Finnemore (1993:566) analysed that from outside, states are forced to have organizational innovation, rather than that it comes from internal pressures. States are shaped in their interaction within international social action. Policies and structures are influenced by international organizations. If a phenomenon or policy discourse is widespread among the global system, states are more willing to copy these policy issues into their own, domestic policies. This copying of policy is a reaction to the socially constructed norms and beliefs that are current within the wider international community.

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International organizations are not only coordinating actors that deal with worldwide problems as poverty, market failures and collective action dilemmas. They play a significant role in creating actors and concepts, defining responsibilities and coordinating the work that needs to be done. The designing of policies and giving these issues meaning and normative value are also characteristics (Barnett and Finnemore, 1999:700).

As a consequence of redefining and creating concepts and actors, the intervention of international organizations in domestic affairs increase because of their knowledge and expertise about their self-created concepts (idem:712).

From the international organizations, ideas, norms, policies and values are spread out to the member states. Barnett and Finnemore (1999:713) analysed that with these elements, elites and officials of the international organizations are preaching the new ideas to the member states as ‘modern missionaries’. They analysed a pressure of international organizations to shape domestic practices with their new ideas, norms, policies and values. The process of transferring policies from the international level to domestic policies is described as ‘policy coordination, policy transfer or policy diffusion’ and will be explained in the next section.

2.5 Policy transfer

As a country being involved in larger circles of international organizations and international cooperation, a consequence is the coordination of policy, norms, values or frameworks from outside to your domestic policies. This process is described by several authors with different concepts. Concepts used to describe this process are policy coordination, policy transfer or policy diffusion (Keohane, 1984:51-52). Policy coordination can be described as “actors adjust their behaviour to the actual or anticipated preferences of others” (Barnett and Finnemore, 1999:713).

Fischer (1988:35-38) distinguishes four levels of policy coordination. Four different forms of how policy on the international level emerges. Tacit policy coordination means that there is mutual policy agreement without official communication or a signed agreement. Second form of policy coordination is negotiated policy; those policies emerged as result of bargaining between different actors and led to a more formal agreement. Besides tacit and negotiated policy, he also distinguishes guiding policy and replacing policy. Guiding policy is characterized by a set of rules as a framework for policymakers. The fourth level of policy coordination is the surrender of national policies to give up their own policies to become

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involved in the broader policy community. Domestic policies are replaced by international policies.

This process of influencing from the international arena is defined as the ‘transnational diffusion process’ (Gilardi, 2013). Transnational diffusion can be described as how decisions, ideas and policies on domestic level are influenced by the international context, in special by the ideas, norms and policies promoted by international organizations. Also transnational diffusion can take place between two countries, where one country elements from policies, ideas or complete policies copied into its own policy (Gilardi, 2013:453).

A concept used to describe policy diffusion between two countries is ‘policy transfer’. Policy transfer is defined as “the process by which knowledge about policies, administrative arrangements, institutions and ideas in one system is used in the development of policies, administrative arrangements, institutions and ideas in another system” (Dolowitz and Marsh, 2000:5).

Giraldi (2013:461-462) distinguishes four ways of diffusion of policies in the international arena: coercion, competition, learning and emulation. With policy coercion, international organizations, powerful countries or other actors can put pressure on states to adopt certain policies. As a reaction to this coercion, there is policy competition between countries in order to attract or retain economic resources.

Policy diffusion also can contain a learning element. Policymakers use the knowledge and experiences of other countries in making their policies. Policy emulation can be described as the process whereby policies diffuse because of their normative and socially constructed properties instead of their objective character (idem:463:466, Tolbert and Zucker, 1983:26).

Convergence or coercion is characterized by the mechanism of conditionality. With conditionality, national governments must comply with given policy requirements in order to access certain resources. This mechanism is often used by international financial institutions such as the World Bank or the International Monetary Fund. Also the European Union used conditionality for the joining of new members (Schimmelfennig and Sedelmeier, 2004:664).

Policy diffusion is often the diffusion of a principle or model and not bound by conditionality. It is not common that the diffusion of policy contains an extended, detailed policy programme, it are often policy elements. A principle is a general guideline for the design of policy on domestic level. The broad orientation without too specific elements is the most important characteristic of transnational diffusion. A model is one specific option of how to organize a programme or an institutional design (Giraldi, 2013: 460; Weyland, 2007:18).

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Chapter 3 Methodology

In this methodology chapter, the research and academic methods will be explained. The research question is an explanatory question: Is the shift in Dutch development policy to a new ‘Aid and Trade’-agenda (2013) as a paradigm shift and what was the role of international organizations in this change? It seeks to explain if the shift in Dutch development policy was a paradigm shift and what the role of international organizations was in this process.

Propositions of this research question are the publication of the development policy document of Minister Ploumen as a ‘new agenda’, with the inclusion of trade. ‘Aid and Trade’ used in this agenda is related to the international discourse of Aid for Trade, that was launched by the World Trade Organization (WTO) in 2005.

For the research to a paradigm shift in Dutch development policies to an agenda with ‘Aid and Trade’, specific attention is given to the WTO as driver of this change. The WTO is actively promoting the principles of Aid for Trade, an approach of ‘Aid and Trade’.

The academic literature that is in line with this topic comes from different theories and models. To understand the elements of a ‘paradigm shift’, first literature is described from incrementalism and punctuated equilibrium. A paradigm shift is a radical change, so first the three documents are analysed whether or not radical changes have occurred in policy goals and policy instruments.

The concept of ‘paradigm shift’ is defined by Hall (1993), who defined a paradigm shift as a change in policy goals, policy instruments and as a redefinition of the policy, the image and ideas of the policy change. For the operationalization, the three elements of a paradigm shift are defined. Policy goals are the reason the policy document is formulated. The policy addresses a problem and presents goals as guidelines towards a solution. Goals have to be achieved through the use of instruments. Policy instruments are means, measures or techniques that are presented in the policy documents to attain the policy goals. The policy image is the soften concept and is characterized by the ideas and the discourse used in the document. Change in policy image can be studied to see whether or not the discourse of the policy document change. A redefinition of a policy will lead to a changed policy image.

To understand the role of policy influence of international organizations, literature on policy transfer and policy diffusion from international organizations to member states is used. The role of international organizations will be analysed whether or not principles, models or

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elements of policies are diffused and transmitted into Dutch development policies in the change to an ‘Aid and Trade’ –agenda.

To have a clear image of the context of the documents, first the background process of the development policy documents will be analysed with help of the policy-cycle presented in the theoretical chapter, as a model to study the policy process.

The unit of analysis of this research will have two single cases, with a single unit of analysis, due to the two-part research question. The single case study I choose because it is an illustrative case. This strategy of research is called a typical strategy because the case is an example of the relation between the described variables. The unit of analysis is the Dutch development policies and the role of international organizations.

In selecting a case, I have chosen to do research to the three main Dutch development policy documents from the last three Ministers of Development. In finding a paradigm shift or not, it would be insufficient to only select the last two policy documents because of the timespan of the two documents and long-term change. The documents are published only three years after each other. The choice for three documents has to strengthen the analysis on policy change, because of the long-term incremental changes, the ‘muddling-through’ that could have taken place.

This research will be qualitative. The main three policy documents on Dutch development policies, that were presented after the Dutch national elections of 2007, 2010 and 2012 will be analysed with a content analysis and presented in a table. These policy documents are primary sources. The changes in policy during the implementation are therefore unknown and not taken into account in writing this thesis. Related policies and the part of humanitarian aid are not taken into account, due to the unpredictable context and different policy subject. The 2010 document has a follow-up that is published in the beginning of 2011. In the analysis, 2010 is kept as the year of publishing, because the 2010 document presents the major policy stream.

The data for the second part will be collected through interviews with civil servants as policy makers and political advisors of Dutch development NGOs. The respondents are selected on their knowledge and expertise about Dutch development policies and selected with the ‘snowball’ method. To the respondents two main questions will be asked. First, a question to the radicalness of the policy change to an ‘Aid and Trade’ –agenda. Second, a question to the reasons that caused this change.

The transcripts of the interviews are added to this thesis. In analysing the interviews, I will compare the interviews and systematically highlight the relevant information and quotes. The

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information of the respondents on the radicalness of the policy change will be placed after the analysis of the first part of the main research question, to split factual information of the policy documents from the opinions of the respondents. The information about the reasons for changes will be presented in a scheme divided per subject. Also quotes are used to strengthen the scheme.

In order to ensure the anonymity and the legitimacy of the respondents, the quotations and the answers of the respondents will be anonymized as ‘respondent 1’ to ‘respondent 6’. The names and functions of the respondents are available in the transcripts of the interviews, which can be requested from the author of this thesis. Attention has to be paid to the background of the respondents and their position towards the subject of research, as I have interviewed both civil servants and political advisors of NGOs. The respondents working within NGO’s are, based on academic literature, assumed to be more critical towards government policies. Their rationality to promote the interest of their organization can influence their opinion on government policies, in special when government policy is disadvantageous towards Dutch development NGOs.

Societal relevance of this thesis lies in framing in policy change and the actors that can influence this policy change. The presentation of a ‘new agenda’ can raise questions in politics and society about dramatic changes and radical measures, while on the background certain policy ideas have survived for years or certain events caused the policy to change. Policy change could be heavily influenced by different actors, such as international organizations, political actors, evaluations, science and civil society.

Scientific relevance for Public Administration lies in the complexity of studying public policy change. The development policy field is more complex to study than other policy fields, because of the many (international) actors that are involved and the variety of themes that it is related to. This research will give more insight in paradigm shifts in policy documents and the reasons that cause these shifts. A lot of bargaining and negotiations about public policy happens behind closed doors, which makes it more difficult to analyse the intentions and reasons for policy change. Hopefully this research contributes to the knowledge on policy change and the dynamics of the policy field, in special to the role of ideas and the way in which these ideas are presented.

The construction of validity of this research lies in the operational measures I have chosen to study the concepts presented above. Also the validity lies in the multiple sources of evidence, policy documents, interviews and sources of information. The validity can be explained by the internal validity of the case-study. The analysis of the policy documents is

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in-depth knowledge and has a high internal validity, because in comparing the content of the three policy documents, it can be analysed if conditions from the one document lead to conditions in the other document. To match the patterns of change the documents will be studied on a shift in paradigm, with attention to radical and incremental changes.

In using interviews as a source of information, I have to keep in mind that in asking about events in the past, respondents are willing to post-fact reasoning. This means that they will analyse the facts and the circumstances with the current knowledge about these issues and events. This could have consequences for the internal validity of the research, because they could neglect or forgot other important causes because it happens in the past.

Another issue that challenges the validity is the interpretation of the respondents of the questions asked and the interpretation of the interviewer on the respondents answer. To tackle this problem, the transcripts of the interviews will be send back to the respondents to ask again their reflection on the issues that will be discussed. This will support their arguments, because of the time span between the interview and their own revision. However, they can also delete information that they gave earlier, this also should be kept in mind. Not one interview is the same, therefore questions could be asked differently to guide and steer the interview-process. The quotes of the respondents are translated from Dutch spoken language to English; this could lead to some loss of information or a different interpretation of the argument.

The external validity is high, because the first part of this thesis, the study to a paradigm shift, can also be conducted to other policy changes. The specific international element has a lower external validity, because not every public policy is related to the international arena. The empirical findings can be potential building blocks for new theories or models. Another option is refining the existing theory and applying it to other empirical cases. The number of case studies could be expanded to test new theoretical building blocks.

Reliability is the way in which the research can be repeated. The reliability of the content-analysis of the policy documents is high, because of the operationalization of this research. The reliability of the conducted interviews is more complicated, because respondents’ arguments can change over time.

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Chapter 4 WTO, Political Background and Development Policies

This chapter provides information about the World Trade Organization (WTO), Dutch politics and the content description of the three development policy documents. In the first section, the role and function of the WTO and the Aid for Trade initiative is described, with a paragraph on the role of the Netherlands. In the second section, the domestic political context of the Netherlands and the political background of the three documents are described. In the third part of this chapter, the content of the last three main Dutch development policy documents are described. The first document is the policy document published in 2007 by Minister Koenders, ‘Een Zaak van Iedereen’. The second document is the policy document published in 2010 by State Secretary Knapen, ‘Basisbrief Ontwikkelingssamenwerking’ and later in 2011, ‘Focusbrief Ontwikkelings-samenwerking’. The third policy document is the document of the current Minister of Development, Minister Ploumen. It is called ‘A World to Gain, a new Agenda for Aid, Trade and Investments’ and is published in 2013.

4.1 WTO

The World Trade Organization (from now on: WTO) is an international organization with as main goal to promote the global trade-system through non-discriminatory, reciprocal, liberalized, predictable and fair trading. Another important principle of the WTO is to help less developed countries with their economic development (WTO.org, 2015).

A significant part of the members of the WTO are developing countries. Developing countries are facing superior power in bargaining of other, developed countries. This became clear during the Uruguay Round of negotiations between 1982-1994, where the topics that were negotiated were more related to developed countries rather than developing countries (Hoekman and Mavroidis, 2007:96).

The developing countries did not have the supply capacity, the financial system and other necessary equipment to handle the level international trade and trade liberalizations. This led to new negotiations in the still ongoing Doha Round and the presentation of the Aid for Trade- principles in 2005 (idem:96-97).

27 4.1.1 Aid for Trade-initiative, 2005

The idea of the Aid for Trade-initiative was discussed during the WTO Doha Round of 2001, as one of the first organizations that presented a new approach with ‘Aid and Trade’. However, it took years of negotiations and discussion to the launching of the initiative in 2005 in Hong Kong, during the annual Ministerial conference.

The Hong Kong Declaration shows clearly the aim of the initiative:

“Aid for Trade should aim to help developing countries, particularly least developed countries, to build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade” (WTO, 2005 in: Halleart and Mundo, 2009:7).

As Weber (2010:112) described: “it has an explicit poverty and development focus […] it has justified enhanced efforts of policy coordination and policy harmonisation between key global institutions and actors”.

With the launching of this initiative, the WTO wants that trade policy with an integrated coherent economic, social and environmental focus will become a major component in development policies (Sidal, 2013).

According to the WTO, there are for both donors and recipient countries specific roles in the implementation of the Aid for Trade-initiative. Recipient countries are expected to give full collaboration to the initiatives and commitments done by donor countries. The recipient countries, the developing countries, asked for new policies to increase their welfare and development level in the first place (WTO.org, 2015).

Donors need to embed the Aid for Trade- principles in their own development policies; however, not instead of the other development policies. This means that donors need to change their policies and that the existing aid-community needs to extend their policies to productive, economic development. The donors need to incorporate explicit trade objectives in their aid programmes (Hayashikawa, 2009:9).

The budget for Aid for Trade initiatives has to be additive to the budget for other aid projects. Second the donors need to scale up their trade expertise and capacity and integrate this in their aid programme. Thirdly, donors need to involve the private sector in their activities. It is the private sector who does the business, not governments. However, donors can do commitments, to support and facilitate trade (WTO.org, 2015).

The initiative is no binding agreement, it is a principle. To be assured that donor countries commit themselves to the approach, on the WTO ministerial conference of 2013 a decision was taken where all participated Ministers again give their collaboration to the Aid

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for Trade initiative. Also they decided that the Aid for Trade agenda should become part of the post-2015 development programme (WTO.org, 2013).

4.1.2 The Netherlands and Aid for Trade

At the beginning of her term as Minister of Foreign Trade and Development Cooperation, Minister Ploumen met WTO-official Lamy and promised to raise the discussion in the Netherlands on ‘Aid and Trade’ and invest in programmes (rijksoverheid.nl, 2013).

According to the evaluation of the Inspectie Ontwikkelingssamenwerking en

Beleidsevaluatie (IOB) [Inspection Development Cooperation and Policy-Evaluation] on the

Aid for Trade-activities of the Netherlands, “has Aid for Trade become an essential part of development as well as trade policy. The delivery of aid for trade is part and parcel of development policy as well as of bilateral and multilateral trade agreements” (Bade and Petri, 2015:6). This evaluation shows that the Netherlands is a supporter of the WTO policies. The Netherlands have embedded principles from the Aid for Trade –initiative into their policies. How the Netherlands have accepted the Aid for Trade-initiative is explained further in this thesis.

4.2 Dutch political context and political background of the three documents

To do research to the differences between the three Dutch development policy documents, it is useful to understand the differences between the different Dutch political parties. Between the Dutch political parties, there are differences in opinion about aid and the generosity of the Netherlands towards developing countries. The opinions, in table 3 shown through key-concepts, differ between very generous towards the developing countries to the abolition of development-programmes. To have a clear image of the political opinions, the generosity is described by the percentage of the BBP that should be spend on development according to the political party. Table 3 gives an overview of the Dutch political parties and their main thoughts about development. The percentages differ from zero to one percent of Dutch BBP, from ‘only humanitarian aid’ to ‘international solidarity’.

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Percent BBP Key-concepts

CDA No opinion Economic development and self-reliance

ChristenUnie 0.7-0.8 Servitude, wide definition of

development

D66 0.7 Coherence and customized aid

GroenLinks 0.7-0.8 Coherence and coördination

PVDA 0.7-0.8 Essential, new initiatives

PVDD 1 Compassion and sustainability

PVV 0 None, only humanitarian aid

SGP 0.8 Effective aid, less bureaucracy, more support for NGO’s

SP 0.7 International solidarity

VVD 0.44 Budget cuts, promotion Dutch businesses

Table 3: Political Parties and their opinion about Development (Hoeks and Koolwijk, 2012; pvv.nl, 2012; sgp.nl, 2012; pvdd.nl, 2012).

The policy document ‘Een Zaak van Iedereen’ [translated: ‘a matter of everyone’] was published in October 2007 by Minister Bert Koenders. Minister Koenders was Minister of Development from the 22th of February 2007 until the 23th of February 2010 (Parlement.com, 2015a). He was part of the cabinet Balkenende IV. The cabinet was formed of three political parties, CDA Democrats), the PVDA (labour party) and ChristenUnie (Christian-union). Motto of the Cabinet was: 'Working together, living together'. The cabinet had as aim to work on a greater social cohesion, safety and respect, innovation, sustainability and an active international and European role (Parlement.com, 2015b).

A new government came to power on the 14th October 2010. In this cabinet, there was no Minister of Development. However, Mr. (Ben) Knapen, the State Secretary of the Ministry of Foreign Affairs was responsible for the portfolio Development. Cabinet Rutte I was formed with the liberal party VVD and Christian-Democrats, CDA. The cabinet received tolerance support from the right-wing freedom party, PVV. Main tasks and priorities were the economization of public spending and combating the effects of the economic crisis. Slogan of Cabinet was ‘freedom and responsibility’ (Parliament, 2015c).

Together with the Minister of Foreign Affairs Mr. Rosenthal, State Secretary Knapen published two letters with significant changes in Development policies. The first letter,

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the Dutch Parliament. The second, supplementary letter Focusbrief

Ontwikkelings-samenwerking, followed on the 18th _{of March 2011. Indirect, the letters were a reaction on the} in January 2010 published report ‘Minder Pretentie, Meer Ambitie’ [translated: Less Pretention, More Ambition] by the Wetenschappelijke Raad voor Regeringsbeleid (WRR) (Scientific Council for Government Policy) (Knapen and Rosenthal, 2010; Knapen, 2011).

This report was a consequence of the discontent and debate in society and Parliament on development programmes. The findings of the report caused the revision of Dutch development policy in 2010. The WRR-report made recommendations to revise Dutch development policy on different subjects and to decrease the number of themes, due to economize and societal and political debate. The report recommended the introduction of more economic development and the promotion of trade through a new policy-instrument, Public-Private Partnerships. The report also gave the advice to bring down the number of partner countries and to focus more on Dutch knowledge and expertise in development programmes (WRR, 2010).

Minister Ploumen is the current Minister of Foreign Trade and Development Cooperation of the cabinet Rutte II. On the 5th of November 2012, this cabinet was installed. The cabinet consists of two political parties, the liberal party VVD and labour party PVDA. Main tasks and priorities are to sort out government finances, to a fair division of burdens and to take care of a sustainable economic growth (Parliament, 2015d).

The policy document of Minister Ploumen is ‘A World to Gain: A New Agenda for Aid, Trade and Investments’ (Ploumen, 2013a). From a Secretary in the previous cabinet, now the department of Development has its own Minister, located at the Ministry of Foreign Affairs. The unit DGBEB (directorate-general Foreign Economic Relations) moved from the Ministry for Economic Affairs to the Ministry of Foreign Affairs. Also the Minister has a new title, Minister of Foreign Trade and Development Cooperation. In her work, she is responsible for both development and trade policies (idem).

Table 4, on page 30, gives an overview of background of the three documents, political constellation of the cabinet, the authors of the document and the institutional setting.

31 Een Zaak van

Iedereen (2007)

Basisbrief en Focusbrief

Ontwikkelings-samenwerking (2010/2011)

A World to Gain: A New Agenda for Aid, Trade and Investments (2013)

Political constellation cabinet

Christen-Democrats (CDA), Labour Party (PVDA) and

Christian-Union (CU)

Liberal Party (VVD) and Christian Democrats (CDA) with the support of tolerance of the right wing Freedom Party (PVV).

Liberal Party (VVD) and Labour Party (PVDA)

Authors Minister Koenders of Development (Labour Party)

Minister Rosenthal of Foreign Affairs (Liberal) and State Secretary Knapen of Development (Christian-Democrat)

Minister Ploumen of Foreign Trade and Development Cooperation (Socialist Party) Institutional setting Minister of Development From Minister to Secretary of State for Development

Minister of Foreign Trade and Development Cooperation. Directorate Foreign Economic Relations (DGBEB) from Ministry of Economic Affairs to Ministry of Foreign Affairs.

32 4.3 Content of the three Dutch development policy documents

4.3.1. Een Zaak van Iedereen 2007

In ‘Een Zaak van Iedereen’, the approach of the Dutch government towards development is discussed. The overall goal of the policy document is to fight poverty, to fight poverty with new partners and new coalitions. Therefore, development is called ‘development co-operation’ because aid is given in collaboration with many other partners (Koenders, 2007:7). The policy document contains four priorities. The first point is the focus on security and development. The second point focuses on the economic growth and distribution. The third one focuses on women rights and chances for women and in particular attention for sexual and reproductive health and rights. And last, the fourth point is climate, sustainability and energy (Koenders, 2007:6).

In implementing their policy, the Dutch government has different types of partner countries. The selection of these countries is based on the nature of development and the quality of governance and the level that is reached in reaching the Millennium Development Goals. These goals, established in 2000 by the United Nations with the finish line of 2015, are the red line in the policy document (Koenders, 2007:20; UN.org, 2015).

The first priority is Security and Development. For this focus, the Netherlands work closely together with the international community. The goal is not only to solve conflicts, also to prevent conflicts. For this point, the 3D-approach is introduced. Defence, Diplomacy and Development are the three elements of this approach. This means a bigger role for diplomats in fragile states. With this approach the Netherlands will create conditions for security and development, including the abidance of human rights. The instruments are humanitarian aid, supporting of good governance, human rights and socio-economic development (Koenders, 2007:22).

The second priority is Growth and Distribution. This part focuses on economic part of development. The goal of this policy part is not only economic growth, also distribution of this growth and the related welfare. Therefore, the Netherlands focus is on an open and fair trade system. The participation of the Netherlands in the Doha round of the WTO is to conclude this round with a development-friendly outcome. The Netherlands also will work on implementing the Aid for Trade-strategy and the commitment to make international supply chains more sustainable. A second role is the attention for macroeconomic policy and sector policy in developing countries to create a stable economy (idem:32).

The third priority is based on two Millennium Development Goals (MDG). First, goal three which is about equal opportunities and rights for girls and women and goal 5 about the