Framing the problem

Of the nearly $2 trillion of Official Development Assistance (ODA) given by the major industrialised states since 1950, the vast majority of those funds and associated efforts to improve the lot of people in developing countries have been directed at the formal governmental institutions of the developing states. Historically, the World Bank and regional development banks, as well as many bilateral development agencies, being governmental or inter-governmental organisations themselves, have focused on national budget support, debt relief or capacity-building within state institutions. Over the past two decades, some donors have recognised the central role of the private sector, democracy and good governance in successful development and increased their emphasis on market development, the rule of law, elections, legislatures, local governments and local civil society organisations. These approaches were predicated on the thesis that developmental and governance failures result from deficits in the formal state institutions, or the under-development of markets and traditional civil society.

This chapter seeks to further a complementary thesis: while institutional and civil society deficits certainly contribute to state failure and the lack of development, there is an additional dimension populated by a rogue's gallery of organisations (referred to in this chapter as ‘illicit power structures’). These structures inhabit the dark space of the political economy and operate often under the analytic radar. They subvert and impede democratic consolidation and successful development and they obstruct viable peace in the wake of internal conflict.