World Bank and IMF sponsored neoliberal reforms can have different effects on the political and social structure of receiving nations. Reforms may fortify a status quo unfavorable to the poor, or may even make a bad situation considerably worse, or they may undermine the existing economic system, em
World Bank and IMF sponsored neoliberal reforms can have different effects on the political and social structure of receiving nations. Reforms may fortify a status quo unfavorable to the poor, or may even make a bad situation considerably worse, or they may undermine the existing economic system, empowering the poor to participate more actively in new market arrangements.
Officially, World Bank policy supports rural projects leading to greater equality, including land reform, and denies aid to countries that have not instituted such policies. [1] In the case of Tunisia, however, the World Bank has supported projects that have concentrated land holdings and favored large landowners in particular, and neoliberal reforms in general have been detrimental to Tunisia’s peasantry. Interviews with Tunisian peasants revealed their despondency, and occasional rage, at this shift in state development policy:
The workers have become beggars! Why? The sun shines on everyone. Normally the state looks after us all. Why give the land to the rich? They already have land! If you give them more they will no longer think of the poor. What are they going to do with more, buy another car? It’s no good. You find people with 1000 hectares while others won’t even have one hectare. The poor wanted land. Some farmers before got land and they’re doing well. In the early 1970s, a small amount of state land was distributed to former cooperative workers. If you have connections you can get land.... Those who were fired like me always go the administration asking for work. We tell them “you fired us, so give me something to buy bread.” Nothing happens.
The World Bank asserts that certain policies can reduce poverty while encouraging growth. But Bank officials also realize that any policies that help the poor while imposing costs on the wealthy will encounter resistance whether or not they increase national income. [2] Thus the choice is between promoting the interests of the poor or protecting the interests of the powerful.
In the end, familiar political and social practices lie behind the banner of economic liberalization and the language of economic efficiency in Tunisia. The rural bourgeoisie and their urban representatives are the Tunisian regime's most important clients. Since structural adjustment began in 1986, this class has dominated struggles over state patronage. [3] Tunisian officials were intent on privatizing cooperatives that were draining state coffers. They were no less intent on strengthening their bonds with rural notables.
Ensuring the implementation of market reforms, regardless of the impact on equity, seems to guide the World Bank’s funding priorities in Tunisia. An interview with a Bank official revealed that the Bank conceded to Tunisian officials’ desires to distribute state lands to wealthy Tunisians because the amount of land was relatively small and the Bank hoped to win other struggles with state agents. A number of structural adjustment policies failed to promote rural equity, so it is apparent that the Bank did not use its leverage to assist the rural poor. The key, remaining struggle for the World Bank in Tunisia, according to recent documents, is to ensure the privatization of public enterprises, [4] most of which are located in urban areas. Ultimately, the World Bank’s projects in Tunisia compromised on equity goals in rural areas in order to keep Tunisian economic and political elites on the path of privatization and a reformed market economy. The end result, however, was the enforcement of a development program of questionable efficiency that was also deleterious to the rural poor.
The World Bank’s emphasis on greater equality in rural assets is justified by an extensive literature indicating that smaller holdings are more productive than larger ones in terms of output per unit of land. Extra human effort on small farms, through the use of cheaper family labor, is the main source of this superior productivity. [5] Holdings of large, uncultivated land assets also undermine output levels. Some elites hold stretches of property for reasons of political power, prestige or speculative gain, and are uninterested in taking risks to exploit its productive potential. In the 1970s, World Bank development strategies emphasized fighting rural poverty by integrating the modern and the traditional agricultural sectors. This entailed assisting agricultural development by emphasizing smaller farms and rural development to help the rural poor. [6]
Bank studies generated ambitious goals for more equal distribution of land wealth: “It is clear that agricultural development cannot do all it might to improve rural life if the distribution of land ownership is highly skewed.” Therefore, the Bank’s “objectives are now generally accepted to be increased productivity and employment, and social justice. Land reform can be consistent with these objectives, and in some situations, may well be a necessary condition for their realization.” [7]
The Bank even established specific guidelines for lending policies related to land reform. These included incentives such as favoring countries willing to adopt reforms and giving priority to projects having a favorable impact on poverty. The lending guidelines also stressed that support would not be given to programs or projects that made land holdings more unequal. Bank sources asserted that “the case for redistributive reform is strengthened by the widespread evidence that small farms are more productive than large ones.” [8]
In recent years, however, some of the theoretical justifications for the structural adjustment programs of the 1980s have reverted to a “trickle-down” approach, arguing that any economic growth will ultimately aid the rural poor. Some theorists go so far as to argue that there is little need for sensitivity to equity in adjustment policy, since “in fact, almost everyone in Ghana, and almost all other African countries, is poor on any objective basis. Therefore, the fact that adjustment programs may not directly benefit the absolutely poorest should have far less policy and moral implications than if there were a bias in a rich country. If adjustment programs help a significant number of people in Africa, then inevitably a large number of the poor will be helped.” [9]
Although some Bank policy documents continued to emphasize the need for greater equality in rural assets, [10] Bank policy in Tunisia was clearly guided by the “trickle-down” rather than the social equity approach.
In light of the literature summarized above, it is jarring to encounter the agrarian upper-class bias in Tunisian development policies, avidly supported by the World Bank since the first agricultural sector adjustment loan in 1986. Bank loans supported the distribution of state lands (formerly held in state managed cooperatives), to large scale farmers. These producers benefited from below-market input prices as well as credit and technological support. Nearly one million hectares of state-owned crop land have been transferred “with at best neutral, and probably negative, consequences for the poor.... The government is expressly not distributing these lands to improve the land assets of the rural poor.” [11]
Contrary to any hope for employment creation on these privatized farms, there has been no net job creation in agriculture under Tunisia’s current structural adjustment program. [12] Typically, the first step taken by the new managers of former state lands is to downsize by dismissing large numbers of agricultural laborers. [13]
In general, large landowners have been the only real beneficiaries of Tunisia’s structural adjustment policies. The export crops favored in the new policy environment require irrigation, refrigeration and other resources that small farmers typically lack. The prices for rain-fed crops and livestock produced by the poor have actually dropped during this period. [14] Only modest-to-poor efforts to improve small farmers’ access to credit and inputs have been undertaken. Overall, the World Bank policies adopted in Tunisia support a regime determined to favor the interests of large landowners over those of the small peasantry.
Why did the World Bank violate its own policies concerning rural poverty and asset distribution in Tunisia? Apparently, implementing broad market reforms despite profound social costs dominates Bank strategy. Official statements indicate that the Bank partially accepted Tunisian officials’ arguments that large-scale farms would increase productivity and modern commercial farming techniques. [15] Yet Bank policy guidelines and a welter of statistical data contradict this view. By disregarding its own policies, the World Bank subverted its declared economic efficiency goals and excluded Tunisia’s rural poor from new market arrangements. To a degree, Bank documents acknowledge this:
The unequal distribution of land, the lack of title and land rights, and the fragmentation of land contribute to the persistence of rural poverty. Land policies could be used to reduce rural poverty by improving the security of existing rights to land and by making more land accessible to poor farmers. Tunisia has chosen not to pursue the latter avenue, while the impact of its efforts to improve tenure security appears to be modest. [16]
The social implications of development policies that protect and advance the interests of the wealthy are again best revealed through peasants’ comments:
How could they give all that land to those people? If I had one hectare, I could produce more than five or six hectares’ worth! I work summer and fall only. How can I live on six months of work? I may work one week or two weeks with a cow owner until he sells the milk, and then I have to hit the road. He has 20,000 dinars and I have 10 dinars. I have a brain like you and him. Why is it that workers always stay workers? My boss may have 30,000 and when I ask for a loan I may get 20 dinars. Why should someone live below zero while others drive expensive cars? The owner’s wealth, even his cars, came from us. I have a brain and blood and I work, but I can’t even buy boots for the winter’s rain.
In general, the actions of state agents, coupled with state policy supported by the World Bank, has facilitated economic inefficiency and an increasingly neotraditional rural social order. The emerging social arrangements are based on the strengthening of rural notables, and the accommodation of the rural poor to the revived order through clientage.
[1] Robert Cassen, Does Aid Work? (Oxford: Clarendon Press, 1994). [2] World Bank, World Development Report (Oxford: Oxford University Press, 1990). [3] For an argument to this effect, see Stephen J. King, “Economic Reform and Tunisia’s Hegemonic Party: The End of the Administrative Elite,“Arab Studies Quarterly 20/2 (Spring 1998). [4] World Bank, Tunisia’s Global Integration and Sustainable Development (Washington, DC: World Bank, 1996), p. xv. [5] Michael Lipton, Why Poor People Stay Poor (Cambridge: Cambridge University Press, 1997). [6] World Bank, The Assault on World Poverty (Baltimore: Johns Hopkins University Press, 1975). [7] World Bank, ”Agricultural Sector Working Paper“ (Washington, DC: World Bank, 1972), p. 226. [8] Cassen, Does Aid Work? [9] Jeffrey Herbst, The Politics of Reform in Ghana (Berkeley: University of California Press, 1993) [10] World Development Report, op cit.; Cassen, Does Aid Work? [11] World Bank, Republic of Tunisia: Growth, Policies and Poverty Alleviation (Washington, DC: World Bank, 1995). [12] Ibid. [13] Stephen J. King, “The Politics of Market Reform in Rural Tunisia,” Ph.D. dissertation, Princeton University, 1997. [14] World Bank, Republic of Tunisia. [15] Ibid., p. 7. [16] Ibid., p. 7.
