The recent Congressional hearings on Planned Parenthood attracted a lot of attention. The issue became highly politicized as both parties engaged in frenzied accusations and counter-accusations, while the inherent problem of civil society organizations like Planned Parenthood serving as government contractors went relatively ignored.

Civil society is a crucial pillar of democracy. In Democracy in America, Alexis de Tocqueville noted the important role of self-organized civic associations in the American polity, writing: “In democratic countries the science of association is the mother science; the progress of all the others depends on the progress of that one.” And in recent decades, scholars have written extensively about how civil society supports economic development and democratic consolidation. From this perspective, civil society offers the “third way” for development and democracy, because it is corrupted neither by profits nor governmental politics. It represents the power of communities to self-organize so that they can provide for local public goods.

Indeed, civil society is the buffer between the individual and the state. If state tyranny is rooted in citizens’ dependence on the state, civic associations allow individuals—especially underprivileged people—to take care of their own needs via communitarian actions. And because civic associations mobilize resources locally, they are accountable to local communities.

To remain legitimate and effective, the civil sector must zealously safeguard its non-governmental character. Yet today, the trajectory of the civil society seems to differ significantly from the Tocquevillian vision of a self-organized community independent of the state. One problem is that civil society is not mobilizing resources locally (via donations or user fees) and is increasingly dependent on governments (or donors) for funds. This unfortunate development is evident in the context of domestic groups like Planned Parenthood, as well as groups working overseas. Over the years, western donors have begun funneling an increasing share of aid through NGOs, instead of through developing country governments. This is creating global charity chains in which NGOs in the developing world have turned into sub-contractors for overseas donors, dependent on foreign resources instead of raising funds locally. This has led to accusations that NGOs serve as agents of overseas interests, and not as voices of local people. This “contractorization” of NGOs has created a backlash: About 39 developing countries have enacted laws restricting the flows of foreign funds to locally operating NGOs.

How did this happen? What has transformed so many civil society groups into governmental contractors? During the 1980s, governments began relying on civic groups to deliver public services, partly due to the Reagan-Thatcher approach that sought to reduce the governmental imprint on social policy, including welfare policy (such as unemployment, poverty, old age, and disability) and the provision of social services (such health care, job training, food and nutritional support and housing). In the 1990s, the “reinventing government” philosophy’s emphasis on cutting costs encouraged governments to outsource service provision to civil society groups. During the Clinton-Gore Administration (1992-2000) in particular, this initiative targeted certain branches of the federal government—specifically the Department of the Interior, Health and Human Services, the Department of Labor, and Housing and Urban Development. With the emphasis on cutting down the size of the federal workforce and yet continuing to serve citizens, the government brought in non-profits as contractors to deliver the services that the federal government was previously delivering.  Some nonprofits flourished in this dispensation, and for perspective, during 2012-2013, health services grants provided by the federal government accounted for 45 percent of Planned Parenthood’s net revenue of $1.21 billion.

While this reliance on civil society subcontractors may have served the budgetary or ideological objectives of the state, it also undermined the essence of this sector, sucked it into partisan political battles, and turned it into a tool of political patronage.

Furthermore, the desire for cornering governmental appropriations has created perverse incentives for civil society groups. Instead of raising resources locally to provide goods and services that people in local communities want, civil society organizations focus on securing governmental contracts. Not surprisingly, many are more responsive to the preferences of governmental funders than the communities they aim to serve.

To be clear: This isn’t a call for abolishing services provided by Planned Parenthood or organizations like it. Not all communities and or individuals can or will mobilize funds for the provision of public goods, and government should pay attention to the availability of services. What prevents governments, then, from providing needed services civil society organizations can’t provide—or contracting for-profit firms to do so? After all, the federal government runs a massive hospital system for veterans; why can’t it do so for women’s health? It also relies on the for-profit sector for a variety of goods and services—why can’t it do so in this area?

The Planned Parenthood Congressional hearings suggest that “civil society contractors” are not a “third-way” to solve societal problems; instead, they reflect an old-fashioned approach that has led to government failures. The hearings vividly illustrate how some civic organizations have lost their “non-governmental” character and are now deeply implicated in partisan politics. Many are now political pawns, not beacons of individual liberty and communitarian action. Budgetary appropriation is a political process. If you depend on government funding, you must recognize the danger of getting dragged into factional fights.

Instead of making local communities independent of government and safeguarding individual liberties, the contracting model is corrupting the civic sector; it is weakening the abilities and incentives of communities to self-organize, and destroying an important buffer between the individual and state. Civil society must go back to its roots. It must minimize its dependence on governmental funds for its operations and raise resources from the communities it seeks to serve. In the end, if we want a healthy civil society, then we must pay for it.

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