Global Neoliberal Practice: Institutions and Regulation in Africa by Graham Harrison

This is a chapter out of Graham Harrison’s Book “Neoliberal Africa: The Impact of Global Social Engineering”. Although the book is more of an essay containing fragmentary thoughts, I found this chapter substantial in the sense that it clearly outlined the various institutional avenues in which projects such as neoliberalism cement their ideology.

This chapter considers the global emergence of neoliberalism. It looks at the ways in which neoliberal practice has emerged, expanded and established for itself ‘paradigmatic’ status. In other words, it shows how neoliberalism has shifted from an ambitious and embryonic set of policy interventions to something resembling a framework or set of premisses within which policy is articulated. The practices of neoliberalism have been iterated over such time as to shift the habits, conduct and repertoire of development practice tout court. The layering of large numbers of neoliberal policies has not only led to a progressively more totalising implementation of liberalisation; it has also defined the terms upon which policy and development are thought about and articulated per se. This is, of course, not a completed process (in the last chapter we developed a framework which is anathema to the idea of completed processes, preferring instead a series of practices in place of means–ends distinctions), but it has enabled neoliberal ideas to aspire to ‘meta-development’ status: that is, as the terms upon which development is discussed rather than solely as a predominant model of development. At the level of ideas, this shift or tendency is rather like the analysis of Hay in which neoliberalism moves from normalising to normative (Hay 2004).

Thus, this chapter concerns itself with neoliberalism at the international level – its history of ratcheting up the ambitions of liberalisation since the late 1970s. But, there is a danger here. As suggested in chapters 1 and 3, it is this kind of concern that most tempts writers to endow neoliberalism with agency. After all, it is at the global-historical level that neoliberalism seems to be an idea that does shape history. Furthermore, at the global level, any project to identify the substantially more complex realm of agency and practice will very quickly produce a certain degree of bewilderment: neoliberalism has been realised through a nebulous, formal and semi-formal, and complex series of meetings, rulesetting, lending mechanisms, research outputs and exertions of political pressure. In this sense, abstracting an idea-agency called neoliberalism to encompass the global sweep towards liberalisation seems very tempting. However, it is not the task of this book to detail a global history of neoliberal practice. Our focus is on neoliberal practice in Africa and this necessarily takes us centrally to African states and questions of development policy practice. Therefore, what we need to do in this chapter is to narrate the key developments in the expansion of neoliberalism, but with a wariness of allowing neoliberalism to ‘take flight’ and become history in itself.

This chapter will analyse the international construction of neoliberal regulation in this spirit. It pays particular attention to institutional change and the emergence of neoliberal norms of regulation. This serves to foreground vital aspects of the repertoire of development practice in African states.

Global neoliberalism: free markets and political power

Persistent practice

The last twenty years have witnessed the globalisation of neoliberal economic reform, from specific electoral victories in the United States and Britain to the ‘common sense’ that lies more or less implicitly behind the thought and action of practically all states and international organisations (Robison 2006; Demmers et al. 2004). Through a range of processes, post-communist states, post-colonial states, the international finance institutions and UN agencies have all cleaved to the same neoliberal fundamentals (Demmers et al. 2004; Fine et al. 2001; Lee and McBride 2007; Roy et al. 2007). A rough but revealing expression of this can be found in the narrowing of questions in international development discourse: no longer questions about the relative merits of market and non-market forms of economic organisation, but how to make the expansion of the market work for the poor; no longer questions about the comparative benefits of public or private ownership, but how to make privatisation more efficient (McDonald and Ruiters 2005). How did this happen?

The global economic slowdown of the 1970s, accompanied by increasing instability and the heightened class tensions within many national contexts, created an enabling environment for politicians, intellectuals and policymakers to develop the foundations of neoliberal ideas and practices – what might retrospectively be called first-generation neoliberalism (circa 1979–95) (see, for example, the reflections of Williamson 2000).

First-generation neoliberalism was prosecuted by a group of intellectuals who had espoused critiques of the pre-existing ideas of regulation, social democracy and statist development. These critiques had persisted throughout the post-war period (Bauer 1972), and indeed many staff in the IMF cleaved to notions of monetarism, economic liberalism and anti-statism. What emerged in the early 1980s was an enabling of neoliberal ideas (Brett 2008: 340). The IMF attained an increasingly dominant and aggressive role as macroeconomic keeper of economies in increasingly dire straits (Havnevik 1987). The party ideological atmosphere in many economically powerful Western states moved to the right, lending the ‘free market’ a revived ideological cachet (Turner 2008). Economic recession created a context in which development orthodoxies looked increasingly fragile and alternative – even radical – solutions became increasingly thinkable. This was because the global slowdown and instability of the late 1970s could be readily shaped as a crisis of Keynesian and developmental approaches (whatever the precise linkages between social democratic or statist-nationalist paradigms and ‘crisis’) and alternative approaches advocated.

We can readily see that the early 1980s was a period of tensions and mismatches between political institutions, class relations and patterns of socio-economic interaction. Duménil and Lévy (2001, 2004) demonstrate how the 1970s had produced a fall in rates of profit, which put pressure on capital and states to disempower workers and reduce labour’s influence over government, particularly in favour of finance capital. Kotz (2008) also focuses on the shifting institutional forms that neoliberal regimes produce, arguing that governments attempted to address economic decline and profit squeeze by removing controls on capital, adjusting fiscal policy in favour of capital, and putting the state more forcefully to work to support finance, property and capital mobility.

What these analyses show us is how structural shifts in the global economy were realised through a series of interrelated debates and policy changes in many states and international organisations that enabled advocates of economic liberalisation to shape the direction of economic orthodoxy towards the practices and premisses of neoliberalism. This was not an inevitability; it was a piecemeal and contested project. The 1980s proved to be an extremely turbulent decade, characterised by attempts to liberalise, resistance against the latter, reform ‘slippage’ and indeed in some cases social collapse, not only in Africa but in myriad ways throughout the world (Kozul-Wright and Rayment 2007; Bond 2004; Fisher and Ponniah 2003).

Within an enduring state of economic sluggishness and social turbulence, the persistence of the intellectuals and practitioners of liberalisation maintained an open field for neoliberal practice. In the absence of a powerful rival set of practices and ideas, neoliberalism became in this strict sense ‘necessary’, and its repeated failure to stabilise societies or reinvigorate the global economy did not so much disempower the advocates of neoliberalism (whose numbers were growing) as much as harden and recapitulate neoliberal practice. This is perhaps the historic import of Margaret Thatcher’s apocryphal phrase ‘there is no alternative’. Neoliberal practice was endlessly asserted despite its inability to produce stable growth and social peace (Chapter 2) because it had no alternatives that so effectively conjoined ideology and policy practice.

Dark victories

At the time when Walden Bello used the phrase ‘dark victories’ (Bello 1993), there was a sense that neoliberalism was being imposed on suffering societies in ways that were nothing short of coercive. That this neoliberal project brought much hardship and political turbulence is both evident and unsurprising. However, efforts to implement neoliberalism have endured the 1980s, bringing in new policies and modes of intervention. This has led some to speak of a twofold sequencing of neoliberal implementation: first- and second-generation reform. First generation-reform (FGR) is characterised as being a period of compulsory adjustment to market ‘realities’; second-generation reform (SGR) is seen as a subsequent and less troubled period in which the ‘basics’ (some version of the Washington Consensus) are in place and it remains to use these basics as the guidelines for broader projects of social engineering – within both states (Chapter 5) and societies (Chapter 6). The notions of first- and second-generation reform are in a sense misleading: this stadial account of neoliberal implementation gives a sense of a completed first stage followed by a more sophisticated second stage. This leads us to a teleology, functionalism and consequentialism again. For those advocating neoliberalism, the presence of second-generation reform is evidence that a state has ‘graduated’ beyond the basics of fiscal discipline and liberalised prices. It enables bolder and more expansive neoliberal practice under the assumption that a ‘critical velocity’ or ‘fundamentals’ have been attained, in which resistance and recidivism against neoliberalism have been bypassed.

However, there is a way in which the distinction between firstand second-generation reform is analytically useful. This is to highlight the process already sketched in the section above: a tendency for neoliberal ideas not only to produce powerful models of development but also to produce development itself. As an expanding bundle of practices, neoliberalism’s second-generation status is premissed on the political consolidation of a ‘common sense’. The common sense that SGR requires is that first-generation reforms are both in place and uncontested. This is aptly encapsulated by the World Bank in its millennial Development Report:

Supporting good policies is important but it is not enough. We learned in the 1990s that process is as important as policy.… The way donors and recipients interact strongly influences the effectiveness of development co-operation. Relationships have tended to follow the preferences of donor countries, leaving recipients with little sense of ownership.… If development co-operation is to attack poverty effectively and efficiently, donors will need to … provide sustained support for policy and institutional environments. (World Bank 2000/2001: 191–2)

In the World Development Report of 1997, the World Bank sets out a model of first- and second-generation reforms in which the latter are seen as constituted in ‘deep institutional reforms’, moving out of ‘enclaves’ of reform to entire public institutions (World Bank 1997: 152–3).

This section maps out this movement, from persistent and combative practice towards (but never completing) consensual paradigm. The section is nothing more than a sketch; more detail will be provided in following sections that look more closely at institutional practice and interaction.

Despite the unstable condition of neoliberal policies throughout the world, the 1980s witnessed a profusion of more-or-less shortlived neoliberal experiments. As argued in Chapter 1, this African experience represents an extreme image of a global process of purposeful neoliberal implementation. In Chapter 2 we saw how fragile the evidence was of ‘success’ during the first decade of neoliberal reform. This allowed us to highlight the persistence and determination of largely Western advocates of neoliberalism. But ‘success’ and ‘failure’ premiss themselves on a simplistic means–ends distinction which removes our focus on the development of reform habits constituted by practices. In this sense, what the 1980s show are iterations: repeated and modified exactions to liberalise and reconfigure development management. Thus, the profusion of SAP produced increasingly integrated and institutionally complex practices of implementation regardless of the fragile and unstable economic growth that characterised the decade. So, how did the institutions of neoliberal implementation emerge?

In spite of some distinctions and differences between the two Bretton Woods Institutions, the World Bank and the IMF accustomed themselves to working in close coordination throughout the 1980s (Taylor 1997). The consolidation of neoliberalism has been effected through the growth of a powerful and nebulous international structure of publicly constituted regulative authority. The World Bank, largely due to the implementation of a regime of structural adjustment in the global South, transformed itself from a project-lending international bank to a key influence within policymaking and macroeconomic management throughout the developing world (Please 1984). The IMF moved from short-term exchange-rate creditor to policy-based lender as well, and has also acted to lend large tranches of conditional dollars to emerging market economies experiencing currency crashes.

We will come back to these developments in more detail in the next section. The point here is to signal that the global rise of neoliberalism has involved the elaboration of a new international architecture of regulation, still very much in construction (Soederberg 2002a, 2002b). The age of neoliberalism is characterised by two closely interrelated, but apparently conflicting trends: a powerful consolidation of neoliberal economic fundamentals based on rolling back the state and ‘freeing’ the market; and the generation of a powerful international institutional network of public authority, bound together more or less formally through a policy consensus on issues such as macroeconomic reform, anti-corruption measures and trade policy. One can frame this as a paradox: an integrated ascendance of international public institutions to usher in a ‘marketised’ global order. But, from a pragmatist point of view, this paradox is only apparent. Because all development practice is political, it is a logical impossibility to imagine an unregulated social practice. In this light, liberalisation can only be understood as a bundle of actions which attempt to create novel habits – in other words, different regulative effects. Thus, implementing liberalisation is simply the international practice of neoliberalism with specific attention to the ‘first-generation’ efforts to replace previous habits.

Implementing liberalisation, imposing practice

From 1980 onwards, the World Bank would develop an progressively more pervasive and detailed set of conditional lending mechanisms under the rubric of SAP. Although these SAPs would vary in some degree between countries, it was certainly the case that all were based on a desire to liberalise economies. The drive of SAP in its early implementation was to remove price subsidies within internal markets, to abolish quotas, and to allow exchange rates to float freely. Beyond these core components, all SAPs would also involve policy commitments to many of the following: privatisation, tariff reduction, the removal of state marketing boards, reducing money supply with a view to reducing inflation, encouraging foreign investment, reducing the government payroll, and introducing user charges for public services. Each of these specific aspects of reform, especially when taken collectively, reveal how the World Bank employed loan conditionalities to remove the state from the economy and to provide more freedom to the workings of market signals and capital.

This in itself is well known and hardly contentious. Indeed, the World Bank repeatedly and explicitly represents itself as promoting marketisation through its macroeconomic policy-based lending. What this section aims to do is simply map how this liberalising drive, encoded into SAPs, was also integrated into a broader and extremely powerful network of international institutions.

From the 1980s, the IMF’s lending also became conditional on liberalisation. For the IMF, this was less of a change in policy than it was for the World Bank: the IMF had been concerned with macro­economic indices since its inception. What was more significant was the expansion in the IMF’s remit and its emerging role as lead agency in a constellation of external advocates of neoliberalism. The IMF’s chief concern was the stability of exchange rates, and it lent money to countries that needed to adjust rates to reflect their ‘real’ (that is, market-determined) value. During the 1980s, the IMF incorporated a series of macroeconomic ‘headlines’ concerning budget deficits, rates of inflation and currency devaluation into its concerns. The IMF’s role complemented the World Bank’s in that it lent to lock in and stabilise discrete adjustments to baseline macroeconomic reforms, whereas the World Bank maintained a focus on more programmatic and ‘developmental’ aspects of reform, for example encouraging foreign investment or reforming public services. In practice, the World Bank and the IMF worked closely together and their respective remits became increasingly indistinct, not least because these two institutions worked together in each country setting.

The IMF also developed an increasingly powerful role as auditor. Again, this was not entirely novel: the IMF had a long-standing role as a respected ‘scientific’ institution which produced statistics on national economies. What emerged in the 1980s was that key economic indices (inflation, interest rates, current account deficits, exchange rates) became the material through which the World Bank and the IMF would rank-order national economies according to the extent that they had liberalised. It also provided an evidential base for the IMF to categorise states according to their progress in neoliberal reform. Those countries in a state of delinquency would raise concerns not only for the IMF or the World Bank, but also a raft of other international agencies, bilateral, multilateral, private and public. ‘Off track’ would lead to frozen or cancelled grants or loans, and a likely adjusting down of other indices concerned with investment risk and creditworthiness, as ten countries were in the early 2000s, with Zambia undergoing severe delays in the release of tranches (Jubilee Research 2003: 18). The World Bank also produces rankings according to Country Policy and Institutional Assessments, which evaluate six aspects of policy, much of which clearly translates into a fealty to neoliberal reform. Again, these indicators affect donor and perhaps also international companies’ interest in any specific country. And, if the latter require more neoliberal rank-orderings of potential sites for investment, the Bank also offers a ‘Doing Business Index’ which is, again, entirely dedicated to the rights of property.

Liberalisation was also pursued – albeit awkwardly – through trade reforms, largely through the final GATT round. This final round – dubbed the Uruguay Round – aimed to agree a range of principles that would then usher in a new institution: the World Trade Organisation. The WTO was designed to produce a universal and semi-independent body to ensure equal treatment between trading nations and a progressive ratcheting down of tariffs, nonpreference and other controls of trade – not only in goods but also in services and knowledge. Thus, we can see that neoliberalism emerged centrally through the increasing prominence of the World Bank and the IMF and their use of conditionality effectively to define the repertoire of social and economic policy.

From these core institutions, a raft of international institutions have developed a series of neoliberal practices. These practices are not perfect scientific instruments to forge a global market society: like all practice, neoliberal practice is ‘dirtied’ by individual dispositions, institutional traditions and cultural forms. Nevertheless, one can discern the ‘momentum’ incorporated into these practices – the movement towards a neoliberal social order – and one can also identify interlinkages that bind discrete practices together. As a bundle of practices, neoliberalism can be seen as a global project in which each specific reform, intervention and initiative gains a ‘value added’ in terms of its purchase or effectiveness by virtue of its affirmation of the broad sway of programmatic and policy change.

The rest of this chapter looks at the emergence of this bundle of practices as a historically constructed and multilevel phenomenon. It does so with particular attention to the World Bank, partly because of the salience of this institution as a producer of development practice and also because the World Bank has been the key agency in neoliberal intervention in Africa.

The World Bank and Africa

By the time of the second OPEC oil-price hike in 1979, the developmental project was in tatters. Levels of debt had become sufficiently high to make it difficult to imagine how some states could ever escape from indebtedness. The international economy, which had expanded constantly during the 1960s and slowed in the 1970s, was now clearly in recession. The ‘long downturn’ (Brenner 1998: 138ff.) that commenced in 1973 was addressed from 1979 by a strong shift towards monetarist economic management within the United States and the UK, with other states moving (more or less willingly – see especially France in 1981) in a similar direction over the next decade or so. Perhaps an initial event which starkly announced the shift in the ‘policy logic’ of regulation was the substantial rises in interest rates from 1979 in the USA, which in turn had severe recessionary effects in the West (Brenner 2001: 24ff.).

Globally, the rise of economic liberalism produced a radical change in forms of regulation. The IFIs came under strong pressure – especially from the USA (Wade and Veneroso 1998) – to act as institutions to consolidate and ‘lock in’ a neoliberal architecture. As already argued, the neoliberal project has involved just as much concerted political intervention as did the previous embedded liberal project, which is why Gill (1995) calls is disciplinary neoliberalism. The IFIs increased their capacity to intervene and invigilate, remaking themselves as the active champions of the regulative revolution, reframing ‘development’ as liberalisation and bringing this ideology into the indebted states of the world. There was no region of the world more vulnerable to these global regulative changes than Africa (Abrahamsen 2000).

The economic slowdown in the West produced magnified crisis and vulnerability in the global South, especially Africa. Recession in Western economies dampened demand for primary commodity exports from the post-colonial economies, creating a decline in Africa’s external terms of trade from 160.2 in 1980 to 110.5 in 1990 (base year 1995 = 100; Table 5–17 in World Bank 2000a). SubSaharan Africa’s share of foreign direct investment declined from its already very marginal levels. Total external debt increased from $61 billion in 1980 to $177 billion in 1990, imposing severe pressure on public expenditures – social spending declined by 26 per cent from 1980 to 1985 (Riley and Parfitt 1994: 139). The details of the crisis that this produced in Africa are complex. Szeftel summarises as follows: ‘The crisis of accumulation which has beset the world capitalist order [since the debt crisis] … has been particularly severe in its impact on the poorest and most peripheral societies’ (1987: 87). Metaphors such as the ‘lost decade’ of the 1980s and the ‘death of development’ signal the evaporation of purposive public action and a succession of ad hoc and crisis-management measures.

Thus, the incipient tensions of the previous period were brought to a conclusion in the form of a general economic recession, producing nothing short of a development crisis in many African countries. The Bank could no longer continue project lending to political economies that were reaching economic and social crisis. The result was a change in Bank strategy, starkly presented in the ‘Berg Report’ mentioned in Chapter 1 (World Bank 1981), and closely integrated into the rise of neoliberalism after 1979 in the West (Stern and Ferreira 1997: 537ff.). The ‘Berg Report’ set out a critique of the post-colonial state as a bloated, rent-seeking set of institutions which distorted price mechanisms in order to feather the nests of political elites. The solution was, in simple terms: less state, more market.

This overarching new agenda was implemented through the creation of structural adjustment lending in 1980. Moving from project support to support for macroeconomic restructuring, the Bank lent on the condition that states would implement the new orthodoxies of neoliberal economics: low rates of inflation, devaluation, high rates of interest, divestment of state property, an economy open to global markets and capital, and a general reduction in public expenditure. In essence, the fragility of African states after 1979 created an unprecedented opportunity for external regulative intervention, expressed through those institutions most heavily involved in sub-Saharan Africa: the World Bank and (later) the IMF.

SAPs were effected through the mechanism of conditionality: credit would only be forthcoming if governments implemented the ‘correct’ policies. This produced a very different relationship between the World Bank and indebted states to that of the debt-led development model.

The conditionality mechanism created considerable tension between governing elites and the Bank. In Tanzania during the early 1980s the tension between conditionality and the government was most clear in Nyerere’s resistance to the devaluation of the Tanzanian shilling, manifested in his broadsides against the IMF (or the ‘International Ministry of Finance’, as he dubbed it) (Campbell and Stein 1992). Similar tensions between African governments and the IFIs existed throughout Africa, manifest in the tendency of ‘adjusting’ states to evade or abandon the policy reforms that the Bank and Fund made conditions of loans (Mosley et al. 1995).

Finally, it is vital to note that adjustment did not usher in any clear signs of economic recovery in sub-Saharan Africa (Mosley and Weeks 1993; Schatz 1994; Weeks 2001: 271). Perhaps one of the most successful intended consequences of structural adjustment was the erosion of (formal) state capacity, the effect of which was to make management of the economy and society increasingly difficult (Moore 1998). In sum, imposing neoliberalism produced its own delegitimising contradictions: it was effective as a strategy to ensure a global revolution in development thinking, but it failed as a strategy of economic development.

In sum, the 1980s encapsulated an effort to resolve the problems of economic slowdown and a weakening of global regulative architecture, manifest from 1973. The shift towards neoliberalism attempted to re-establish profitability as a prerequisite to reinvigorated growth. It produced a political and institutional response from the IFIs (strongly pushed forward by the USA) which established neoliberalism as a near-synonym for ‘development’ (described as meta-development earlier) and, through its own techniques of intervention, attempted to universalise neoliberal reform throughout a wide range of states facing more or less severe economic crisis.

But the 1980s was not a period of harmonisation – far from it. It was clear that the neoliberal revolution failed to legitimise itself within the states of the global South: it produced economic instability, was perceived as an external imposition (demonising the World Bank and the IMF in the process), and made indebted economies increasingly extroverted to a hostile global economy. It is the failure of the neoliberal project of the 1980s that has led the World Bank and others to innovate a new regime of development, based on the ‘post-Washington Consensus’, governance and poverty reduction.

The contemporary global architecture of development

From the 1980s neoliberalism has pervaded all forms of international regulation, making imposition less pressing than reproduction and consolidation. This is the conjuncture that produced the so-called post-Washington Consensus (PWC). The PWC constitutes a rubric for a range of innovations that have a common purpose in imagining the social embeddedness of the free market (Sorensen 1991). Thus, we have information-theoretic economics and institutionalism (Fine et al. 2001), social capital (Edwards 1999), civil society (Landell Mills 1992), and governance (Williams 1996). Each of these themes contributes to a model of a society in which people act as self-interested individuals, harmonise their actions through information exchange and commonly accepted rules (either established in law or through ‘trust’), and generate positive-sum effects in the polity and economy by respecting each other’s rights. States rule transparently under the principal motivation of promoting the social relations of the market and the participation of the citizenry in that project. In contradistinction to the previous periods, these ideas collectively produce a discourse that represents neoliberal markets as embedded in societies. There is no rejection of liberalisation, but there is a central concern with how the state manages and schedules liberalisation, as well as ‘an emphasis on the non-economic “glue” that holds society together’ (Fine et al. 2001: xiii). The projects of the contemporary regulative architecture is to secure development – still forged in neoliberal fundamentals – in its relegitimisation through the post-Washington Consensus.

Embedding neoliberalism requires a bold repertoire of intervention and an epic vision – requirements that the World Bank has been aspiring to (Cammack 2002; Williams 1999; Cahn 1993; Einhorn 2001). Most writers generally accept that the period of embedded liberalism, say from 1958 to 1968, represented a period during which capitalism was successfully managed through an intermeshing of domestic and international regulation, underpinned by expansive national and global economies. However one understands the (brief) ‘golden age’ of capitalism, its relative success seems plainly clear: Milanovic’s (2003) recent and sharp critique of celebratory accounts of globalisation is explicitly juxta­posed against the ‘golden age’ as a period of more expansive and developmental capitalism. ‘Something is clearly wrong’ with contemporary globalisation, he concludes (2003: 679).

As Robert Wade has shown, these interests can produce forms of regulation which are detrimental to development strategies (Wade 2003). Debt and trade structures systematically dis­advantage weak states that rely on primary exports for hard currency. The figures exemplify some of the economics of Western dominance of the neoliberal agenda: from 1992 to 1998 Highly Indebted Poor Countries transferred $5.8 billion to the World Bank over what they received in new loans and credits (Pettifor and Garrett 2000); First World countries impose 50 per cent higher import barriers against the Third World than they do among themselves (Nares 1997: 18); Africa’s income fell by about 2 per cent as a result of the conclusion of the Uruguay Round (Stiglitz 2002: 61); ODA from the West fell by 50 per cent between 1990 and 1998 (Pincus and Winters 2003: 22). Wade is critical of the developmental possibilities of TRIPS (Trade-Related Aspects of Intellectual Property Rights), TRIMs Trade-Related Investment Measures), and GATS (General Agreemet on Trade in Services) (Wade 2003; see also Picciotto 1999). Add to this the specific national protectionisms that emerge from the Europe and America (steel, cognac, the CAP etc.) and one has a very dour image of the developmental prospects of global regulation.

Embedded liberalism ‘worked’ because it defined a functional and reasonably coordinated relationship between national models of economic management and the global economy. In light of this, embedded neoliberalism appears to be a project facing serious difficulties. The World Bank is ‘projectising’ embedded neo­liberalism into African states with no facilitating context that might allow states to legitimise a core set of developmentally purposive policies. This makes the persistence of neoliberalism – prevalent in development thinking and policy, as well as governance discourse and practice – all the more intriguing. The next chapter explores the nature of neoliberalism’s failures in more detail, allowing subsequent chapters to understand the ways in which neoliberal practices persist.

Global social practice

So far, we have identified an emerging institutional project at the global level – one that has profoundly shaped the global political economy in ways that have pushed most parts of the world towards liberal economic policy. For Africa, this global project has been manifest especially in African states’ relations with the World Bank. This section will show how this global project is based in social practice rather than epochal ideational forces or abstracted capitalist logic – although clearly both of these analytical drivers are intertwined with the way social practices emerge and change. And, at this more grand level, it is only possible (in this book at least) to identify key aspects of practice in their generalities. It is important to start by recognising that there is a global social practice. There has emerged an interconnected institutional and discursive neoliberal project which – although far from omnipotent or perfectly unified – has become increasingly prominent over the last thirty years and can now be identified in an impressive range of international organisations.

Theorists of international political economy often speak about international regimes to identify a set of global interconnections. Perhaps the clearest example of an international regime outside of our concerns here is ‘the long 1960s’ in which a social-democratic developmentalist regime emerged through the UN system and the politics of Independence, say from the Bandung conference in 1955 to the first Lomé agreement in 1975. During this period, a panoply of statements, institutions, financial mechanisms, rules and coalitions were formed around the basic premiss that the ‘Third World’ (to use the vernacular of the time) required ‘differentiated and preferential treatment’ (to use the vernacular of our time) in order for all nations to develop. This period witnessed the creation of the ‘Paris Club’ of bilateral aid donors; the creation of the ‘soft’ lending arm of the World Bank, the International Development Association; the declaration of a ‘development decade’ by the UN; the creation of the Development Assistance Committee within the OECD, the inauguration of the Non-Aligned Movement, the creation of the UN Conference on Trade and Development, the emergence of the Group of 77 post-colonial states within the UN General Assembly, the creation of the UN Development Programme, UN Covenants on Civil and Political Rights and Social and Economic Rights, price stabilisation funds for primary commodities, and the Declaration of a New International Economic Order.

The point is not to argue a certain degree of success or failure for this regime. Rather, it is to provide an analogy with the current neoliberal international regime. And, indeed, one can identify a similar period in which international ‘regimental’ activities produce a constellation of institutions, discourses and practices that shift international politics away from social-democratic developmentalism towards neoliberalism – in this latter case over a longer period.

Throughout the last twenty years, a massive global alignment has taken place. The Lomé agreements between the EU and the ACP groups of post-colonial states has been determinedly liberalised since Lomé III (1983); the USA left the ‘developmentalist’ UNESCO in 1984, commencing an undermining of the UN organisations that grew during the previous regime; the World Bank created MIGA, which clearly sees development not through concessional lending for social and economic public projects but through the incentivisation of private capital; the GATT Uruguay Round commenced in 1986, ending of course with the creation of the WTO; price stabilisation funds were abolished or underfunded (for example, the International Coffee Agreement ended in 1989); the World Bank and the IMF developed a range of lending programmes based on ‘systemic’ and macroeconomic neoliberal reforms; G7 and G8 meetings became more regularised and important; NAFTA was created; the Basle ‘Core Principles’ of international banking were created; a Financial Stability Forum was created; World Bank, IMF, and WTO annual summits, World Economic Forums, G8 pre-summit meetings and ‘green room’ politics, and so on produce a networked and powerful international neoliberal ‘architecture’, which, by the 2000s, has produced the best evidence of social globalisation that we have.

The extent of integration between different international organisations is high and indeed difficult to map out fully precisely because of the complexity and density of interconnection – both formal and informal. Furthermore, interconnections work across and between governments, intergovernmental organisations, and private agencies such as bond rating agencies, associations of banks, accounting standards agencies and so on. We can provide a flavour here before moving on to a more reflective understanding of the nature of social practice. It is not my intention to encompass all aspects of this global neoliberal networking; rather, I wish just to provide a convincing sense of the level and intensity of interconnection.

The World Bank and the IMF have become closely intertwined since the creation of SAP. Currently, HIPC and the PRSP both require Bank–IMF co-production: each institution has related funding mechanisms (PRSC and PRGF), joint evaluation of PRSP is required, and currently PRSPs are integrated into a World Bank/IMF Integrated Framework. The World Bank and the IMF have developed a ‘Coherence Agenda’ since the mid-1990s. They also co-produce a Financial Sector Assessment Programme. The IMF’s date generation and auditing functions connect it to the OECD (as a participant in Inter Ministerial Finance Committee Meetings). The IMF sends its confidential Country Reports to the WTO, which in turn holds joint research seminars with the IMF – and the World Bank. In 1996, the WTO, the World Bank and IMF agreed codes of cooperation, reinforced as a ‘Joint Declaration of Coherence’ during the 1999 WTO meeting in Seattle, and throughout the WTO Doha ‘Development Round’. The WTO has observer status on the World Bank and IMF Executive Boards. The WTO has effectively claimed the ‘hard’ regulatory functions of international trade, leaving the UNCTAD with a residual role concerned with the social impacts of trade but little effective power since the mid-1990s. Outside of the ‘unholy trinity’ (Peet 2003) revolve a constellation of other agencies which rely on data and funds from the ‘big three’, such as the International Accounting Standards Board, the Bank of International Settlements, and the World Intellectual Property Organisation.

It is readily apparent that this neoliberal architecture is substantial and built around a laissez-faire agenda. What kind of social practice underpins this project?