Welfare State, DIY
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“I found Myanmar an interesting case study,” says Gerard McCarthy, Assistant Professor of Social Policy and Development at the International Institute of Social Studies in The Hague. Speaking from his office, he reflects on the questions that have driven his work for over a decade: how deeply divided and impoverished societies emerge from conflict, what kinds of political settlements they arrive at, and how inclusive—or exclusive—those transitions become. Myanmar, with its long history of authoritarianism, ethnic conflict, and chronic underdevelopment, presents a unique arena for exploring these themes, especially during its brief experiment with democratic reform in the 2010s. His research culminated in his 2023 book, Outsourcing the Polity, published by Cornell Press.
McCarthy’s focus on Myanmar is grounded in an academic interest in comparative conflict transitions that emerged in earlier work he had done in South Sudan. When Myanmar held its 2010 election, he was drawn in by the apparent paradox of political liberalization occurring in a country still strongly “marked by military rule” and widespread poverty. He began a series of extended study visits to Myanmar throughout the early 2010s, and eventually came to look at how society and politics evolved in northern Bago and northern Karen States during Myanmar’s transition period. He chose to center his research at the local and provincial level because much of the existing literature base that formed the background of his research was primarily concerned with the major urban centers of Yangon and Mandalay, leaving a gap of knowledge about rural communities and the provinces.
From the outset, McCarthy was committed to a grounded, ethnographic understanding of Myanmar’s political and economic transitions. Rather than take major political events at face value, he focused on what he calls the “lived experience” of social change: how people navigate shifting ideologies, economic systems, and social obligations at the grassroots level. He stresses that seemingly spontaneous developments—like the rise of civil resistance or grassroots welfare networks must be understood in the context of long-term historical, religious, and political shifts.
A major focus of McCarthy’s work is what he calls “social outsourcing”—the systematic withdrawal of the Burmese state from welfare provision, and the corresponding rise of non-state actors, particularly businesspeople and religious institutions, as de facto welfare providers. This is not simply a story of state failure, he argues, but a deliberate strategic decision. After the collapse of socialism in 1988 and the military’s refusal to honor the results of the 1990 election, the regime shifted its priorities: military spending doubled, while social spending collapsed. “There was a strategic decision,” McCarthy says, “to shift fiscal priority from social expenditure to the military.”
At the same time, the military regime began encouraging wealthy individuals to step in and provide for their communities. This strategy is not unique to Myanmar; McCarthy connects it to what he calls “welfare capitalism,” tracing its ideological roots to early 20th-century U.S. figures like Herbert Hoover. In fact, Hoover developed and tested the concept while overseeing a mining operation in colonial-era Burma, where he implemented welfare provisions for workers—an early example of private enterprise taking on public welfare functions. These ideas later shaped U.S. economic thought, and remarkably, they found their way into Burmese policy through American-trained economists advising post-independence leaders like U Nu. In this model, the state minimizes its own responsibility by promoting the idea that “enlightened capitalists” will voluntarily care for their workers and communities. In Myanmar, this concept was rebranded and reinforced through state-run trainings, Buddhist teachings, and social norms, creating a framework in which private charity substitutes for public welfare.
Throughout the 1990s and 2000s, this welfare capitalist model took root in Myanmar. Local businesspeople began forming relationships with township military commanders and monks, establishing free funeral services, blood banks, and educational scholarships. These initiatives, McCarthy notes, were not spontaneous outpourings of goodwill—they were structured responses to a governance vacuum, shaped by ideology and necessity. Buddhist concepts like parahita (“working for the good of others”) were reinterpreted to encompass these new forms of civic action. “By the mid-1990s,” he says, “the idea of parahita begins to become increasingly used in relation to charitable work for supporting the elderly, or the ambulance service.”
The result of that dynamic was what McCarthy calls “moral citizenship,” or the expectation that good Burmese citizens will care for each other through voluntary action in the absence of—or even overt hostility from—the state. While this moral economy generates real benefits for vulnerable populations, it also creates a troubling asymmetry: the poor depend on the compassion of the wealthy, rather than on rights or entitlements backed by public institutions. “There’s inequalities baked into moral citizenship,” McCarthy argues. Those who are visible, emotionally resonant, or lucky enough to attract donors receive support; those who are not, do not.
Cyclone Nargis in 2008 marked a turning point. When state institutions failed to deliver aid, civil society networks mobilized across the country. For McCarthy, Nargis was not the origin of these networks, but rather, he explains, “the sociology of the 1990s and 2000s lays the groundwork for what we then see during Nargis.” What was remarkable was not just the volume of post-Nargis activity, but its scope: people donated and volunteered for strangers hundreds of miles away! McCarthy sees this as the expansion of a moral imagination—a shift from local charity to what he calls “trans-local” solidarity, driven by an emotional connection to shared suffering.
Interestingly, McCarthy notes that this same emotional infrastructure undergirds much of the post-coup resistance, that the networks and values that supported disaster relief now sustain armed resistance groups, mutual aid programs, and displaced communities. The People’s Defense Forces (PDFs), for example, rely heavily on local fundraising and grassroots legitimacy. Their success, he argues, is unintelligible without reference to the moral economy that developed over the previous three decades. In this way, the military’s long-standing strategy of social outsourcing has unintentionally laid the groundwork for its own undoing.
Still, McCarthy resists the temptation to romanticize civil society. For all its resilience, non-state welfare is uneven, unregulated, and limited in scope. Charitable networks are frequently duplicated, uncoordinated, and incapable of delivering sustained structural change. “There’s limits to non-state response,” he says, especially in the context of large-scale displacement, agricultural collapse, or post-disaster recovery.
Moreover, the ideological embrace of charity seems to have undermined demands for state-based social protections among elites and the general public alike. During the 2010s, as Myanmar’s democratic transition unfolded, social welfare services never exceeded 0.4% of the budget, compared to other regional countries where it was 5-10%. Even Aung San Suu Kyi, he notes, emphasized moral responsibility over institutional reform, echoing the logic of welfare capitalism rather than challenging it.
McCarthy has noted similar dynamics within the National Unity Government (NUG) and other resistance bureaucracies, observing the deep reluctance among many to accept salaries for their roles. He points out that this ethos of voluntary service is rooted in a powerful sense of civic duty and moral commitment. While acknowledging the inspirational nature of such selflessness, he also questions the viability of this model in the long run. “How sustainable is the NUG project without revenue?” he asks, stressing that any functioning state must eventually find ways to raise funds and professionalize its operations—ideally without eroding the underlying spirit of collective responsibility and ethical engagement.
One major obstacle to change is public mistrust of government services. McCarthy cites survey data showing that while 85% of people believe charitable donations effectively address social needs, only 40% feel the same about how tax money is used. Moreover, according to McCarthy, even that number may not be accurate because of a linguistic ambiguity—the Burmese word akun, which is used for tax, is also the word for electricity bill. In contrast, how ones’ charitable giving is channeled is much more concrete than ones taxes, and it is deeply embedded in Buddhist ethics, social obligation, and personal transformation.
So rather than attempt to displace this culture, McCarthy suggests, a future democratic state should learn from it. Transparency, feedback, and emotional resonance are key to rebuilding trust. He points to the remarkable practices of some PDFs, who send donors photographs, receipts, and detailed records of beneficiaries. These practices, he argues, show that accountability is possible—even under extreme duress—and that the state could emulate these mechanisms to build a new type of civic contract. “The state might try to mimic the aspects of the non-state sector which people have faith in,” he suggests.
At the heart of McCarthy’s analysis is a refusal to separate structure from ethics, or political economy from emotion. He treats Buddhist charity not merely as a cultural artifact, but as a deeply adaptive response to governance failure. He engages seriously with the sincerity of generosity, without losing sight of its structural constraints. And he emphasizes the power of everyday practices—in monasteries, funeral services, and neighborhood groups—to shape the future of a nation. “There is both a faith and trust that when you give your time and you give your resources, it will have a benefit,” he says.
Still, he insists that such giving cannot substitute for justice. “There’s a reason why a state exists,” he concludes, “to be able to respond and address inequalities.” As Myanmar’s resistance continues and the vision for a new society emerges, McCarthy urges a reckoning with the past: not just its traumas and failures, but also the quiet acts of care and reciprocity that made survival—and resistance—possible. Only by understanding that moral history, he argues, can Myanmar imagine a future in which the state not only refrains from harm, but actively does good.