HOUSE_OVERSIGHT_023477.jpg

20

the world. The idea was planted during the 1970s, when the institutes
linked with the German political parties played a key role in beating
back an attempted Communist takeover in Portugal and facilitating
that country’s transition to democracy. The 1980s saw the
establishment of the National Endowment for Democracy (NED), a
taxpayer-funded but quasi-independent organization devoted to
support of pro-democracy groups around the world. One of the
NED’s early successes was its funding of the Solidarity trade union in
Poland before the collapse of communism. The 1990s saw the growth
of a host of international organizations capable of monitoring
elections and the funding of the Democracy and Governance branch
of the U.S. Agency for International Development to the tune of
almost $1.5 billion annually.
By the late 1990s, there was some degree of convergence in the
agendas of economists and political scientists. By that point Douglass
North and the school of “New Institutional Economics” he founded
made economists aware of the importance of political institutions—
particularly property rights—for economic growth. Economists
increasingly sought to fold political variables like legal systems and
checks on executive power into their models. Political science had
itself been colonized at this point by economic methodology, and it
was natural for such rational-choice political scientists to start
looking at the economic impact of political institutions.
The return to a more interdisciplinary approach to development was
marked as well by the tenure of James Wolfenson as President of the
World Bank from 1995 to 2005.4 Wolfenson early on gave a speech
on the “cancer of corruption” and signaled to the institution that,
henceforth, political issues like corruption and good governance
would be taken seriously. The publication of the 1997 World
Development Report, The State in a Changing World, marked an
intellectual break with the Washington Consensus focus on economic

HOUSE_OVERSIGHT_023477