Now that the issue of "Russian" corruption has captured headlines, Treasury Secretary Summers has lately been insisting that the Russian government make amends. "This has been a U.S. demand for years", he claims, as if he had not himself addressed letters to "Dear Anatoly"  and met with Chubais as recently as the summer of 1999. This only months after Chubais admitted that he had "conned" from the IMF a $4.8 billion installment in July 1998,  the details of that deal having been worked out in Summers' home over brunch--at a meeting that the New York Times deemed crucial to obtaining release of the funds.

Transactorship has proved particularly harmful in a setting in which communism until recently prevailed.

The transactorship mode of organizing relations is reminiscent of precisely those features of communism that the international community should be concerned not to reinforce. The informal, but influential, parallel executive established by the Harvard-Chubais transactors recalls the powerful patronage networks that virtually ran the Soviet Union. Political aid disguised as economic aid is only too familiar to Russians raised under a system of political control over economic decisions. As Shleifer acknowledged in a 1995 book funded by Harvard, "Aid helps reform not because it directly helps the economy--it is simply too small for that--but because it helps the reformers in their political battles."

And yet U.S. officials have defended this approach. In a 1997 interview, Ambassador Richard L. Morningstar, U.S. aid coordinator to the former Soviet Union, said, "When you're talking about a few hundred million dollars, you're not going to change the country, but you can provide targeted assistance to help Chubais" -- an admission of direct interference in Russia's political life. U.S. assistance to Chubais continued even after he was dismissed by Yeltsin as first deputy prime minister in January 1996: he was placed on the Harvard payroll, a demonstration of solidarity for which senior U.S. officials openly declared their support.

THE U.S.-RUSSIAN experience of transactorship is interesting and disturbing not only in its own right, but because this mode of operating may well become more frequent as a way of conducting transnational affairs in the twenty-first century. With the ongoing process of globalization, the nationality of actors is becoming increasingly irrelevant. Already global elites, with ever closer connections to one another and fewer to the nation-state, see themselves not so much as American, Brazilian or Italian, but as members of an exclusive and highly mobile multinational club, whose rules and regulations have yet to be written. In many respects, members of what Peter Berger has identified as the overlapping "Davos" and "Faculty Club" cultures have much more in common in terms of lifestyle and taste with each other than they have with their fellow nationals. And as Berger observes, "it may be that commonalties in taste make it easier to find common ground politically"--and, of course, economically.

While all this is true, global elites will continue to operate in a world organized into nation-states. In such a world, assumptions about representation, grounded in national and international law, are based on the idea that an individual can formally represent either one state or another, but not both. The transactor mode of behavior may seem to offer a means of having it both ways, of squaring the circle. But it also raises crucial public policy questions. What are the implications of a state of affairs in which the "choice" of who represents one side is shaped to a significant degree by self-selected representatives of the other? What are the consequences when the same player represents multiple sides? Wherein lies the accountability to electorates and parliaments in a world of growing coziness and joint decision-making among governing elites? Where, if at all, do representation and democracy enter the picture? The U.S.-Russian case in the last decade provides a cautionary lesson in all these respects. But it has been a very expensive lesson.

Janine R. Wedel, an anthropologist, is author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe 1989-1998 (St. Martin's Press, 1998). She is associate professor at the Graduate School of Public and International Affairs at the University of Pittsburgh, and director of its research development at the Ridgway Center.

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