Introduction: Researching the effects of neoliberal reforms on local governance in the Southern Mediterranean

Abstract

The effects of neoliberal economic reforms in the Southern Mediterranean are now widely regarded as a main underlying cause of the Arab uprisings. An often neglected dimension is that of the reforms' implications for local governance. The contributions to this collection examine how state power is being re-articulated but also challenged at sub-national levels in Morocco, Egypt, Jordan, Israel, Lebanon and Turkey. They explore the effects of neoliberal economic and local governance reforms such as decentralization, public–private partnerships, and outsourcing in the area of public service delivery, poverty alleviation and labour market reforms on local patronage networks, public accountability and state–society relations. The findings show that such reforms are often subordinated to established patterns of political contestation among actors who seize on the opportunities that reforms offer to advance their political agendas. This introduction presents the key themes and findings, and the global and regional background on neoliberal theories, research and practice.

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Corrigendum

Introduction

The contributions to this collection1 seek to unravel the effects of neoliberal reforms on the reconfiguration of state power in various countries of the Southern Mediterranean, including Turkey and Israel. They examine how state power is being re-articulated at sub-national units of political organization through a variety of neoliberal policies and strategies. These include diverse programmes of institutional restructuring intended to enhance labour market flexibility, public service delivery and territorial competitiveness.

Guazzone and Pioppi (2009b: 5) observe that ‘recent studies on Arab countries have effectively demonstrated that neo-liberal political and economic reforms do not necessarily result in a loosening of the state's control over society, and, hence, the emergence of independent actors’. For example, privatization processes in Morocco and Egypt have represented a chance for ruling elites to shift patronage networks towards the private sector without undermining the power of the state as the ultimate source of rent. At the political level, limited or formal institutional reforms and multiparty systems have been introduced in many countries that allow for a system of controlled and limited representation of the social groups that have benefited from economic reform. Such systems have, at least until recently, eased internal tensions and bolstered the international legitimacy of the regimes while most of the population remained excluded from significant political processes.

Guazzone and Pioppi (2009b: 6–7) furthermore argue that the appearance of extra-state actors, apparently in opposition to or competition with the state itself, can be interpreted as a redeployment of the state, using new strategies that demonstrate a growing reliance on private intermediaries for service provision, such as private entrepreneurs, NGOs and Islamists. In short, neoliberal reforms displace, relativize and redraw the borders between the ‘public’ and the ‘private’. However, and as the contributions in this collection show, the arrangements, effects and responses towards this restructuring of the state vary greatly depending on the context of the local historical configuration of power.

We believe that the articles in this collection make an important contribution to the existing literature. While there are several works on the topic of the effects of neoliberal reforms on national and local power configurations in general (e.g. Brenner & Theodore, 2002a, & 2002b; Craig & Porter, 2006; Leitner et al. eds., 2007), only a few are covering the Southern Mediterranean region, and most tend to focus on reforms at the national level (e.g. Guazzone & Pippi, 2009a; Kienle, 2003a). Another concern is that relevant work on the region tends to focus on urban areas (e.g. Singerman & Amar, 2009; Parker, 2009). Similarly, the literature on authoritarian persistence has focused almost exclusively at the national level (e.g. Schlumberger, 2004). Little research has been conducted either on the strategies of state control at the municipal level or, just as importantly, on their effectiveness. Furthermore, most discussions of neoliberal reforms in the area of public service provision are based on purely technocratic and managerial perspectives, drawing on the literature of New Public Management. At least when compared to the literature on other developing and transition countries in Latin America and Africa, the literature on local manifestations of patronage and clientelism in the Mediterranean region is still limited.

This collection aims to fill this knowledge gap by combining public policy and management theories with those on patron–client networks and public accountability at the local level, and situating them within the critical literature on neoliberalism. As Kienle (2003b: 9) points out, the academic literature has primarily been interested in the distributive, value-related and normative outcomes of neoliberal reforms, but not so much in the ways in which these processes unfold. The contributions cover various countries (Morocco, Egypt, Israel, Jordan, Lebanon and Turkey) and various fields (water provision and other municipal services, social development and employment).

This collection also contributes to the in our view important effort to liberate politics in the region from its stigma of ‘Arab exceptionalism’ by pinpointing both the universality and the regional and/or local specificity of neoliberal reforms. Collectively, the contributions demonstrate the local specificity of ‘actually existing neoliberalisms’. In contrast to neoliberal ideology, in which market forces are assumed to operate according to immutable laws no matter where they are ‘unleashed’, the contributions emphasize ‘the contextual embeddedness of neoliberal restructuring projects insofar as they have been produced within national, regional, and local contexts defined by the legacies of inherited institutional frameworks, policy regimes, regulatory practices, and political struggles’ (Brenner & Theodore, 2002b: 4).

From this perspective, we can observe similar and comparable political developments in the whole Arab region and beyond. While each has its specificities, labour protests in Greece, ‘los indignados’ in Spain, Occupy Wallstreet in the US and social protests against high costs of living in Israel, are but a few of the worldwide expressions of a global systemic crisis. Indeed, the forced departure of several Arab leaders in 2011 reminds us of the departure of several Latin American former presidents currently (or recently) living in exile, such as Alberto Fujimori of Peru, Carlos Salinas de Gortari of Mexico, and Carlos Menem of Argentina. As Perreault and Martin (2005: 191) point out, ‘that these leaders were the primary architects of neoliberalism in their respective countries throughout the 1980s and 1990s is not sheer coincidence. Rather, they share similar histories of continued economic crisis, political scandal, and mobilized popular opposition’. However, the fact that several Arab leaders may be on the run does not mean that neoliberal policies are being fundamentally reversed (see the G8's Deauville Initiative in May 2011), and thus we should expect to see continued challenges to neoliberalism both on the streets and in the electoral arena.

Common Themes and Main Findings

The theoretical framework below will address the issue of defining neoliberalism in more detail, but it is useful to at least briefly define the concept of ‘governance’ here. By ‘governance’, we refer to its ‘political’ rather than ‘technocratic’ definition as ‘the formation and stewardship of the formal and informal rules that regulate the public realm, the arena in which state as well as economic and societal actors interact to make decisions’ (Hyden et al., 2004: 16). This definition of governance (and particularly, ‘local governance’, i.e. at the sub-national, regional, provincial or municipal levels) allows for a ‘re-politicization’ of the debate on neoliberal reforms by exploring how they have affected the ‘rules of the game’, i.e. the formal and informal institutions that shape the power bases and patronage networks of local elites and, in particular, what these mean in terms of clientelism and public accountability in public service provision. The contributions thus focus on how national and international neoliberal discourses are translated and adapted at the local level, and how they re-shape local power structures and discourses. Following Zemni and Bogaert (2009), the articles consider neoliberal reform not as a single comprehensive policy framework with a unitary logic, but rather as a messy and often contradictory plurality of practices and ideas that aim to incite institutions and individuals to conform to market logic. Such reform entails not so much the rolling back of the state but rather its political, institutional and geographical reorganization (Brenner & Theodore, 2002a: 345).

In concrete terms, neoliberal reforms in the region include the privatization and contracting out of public services (often to foreign multinationals, see the articles by Allès, Kadirbeyoglu and Sümer; and Saadi in this collection), innovative ways of co-producing services between the state and ‘civil society’ or NGOs (see the contributions by Bergh and Menza in this collection), as well as the private sector (see Clark, this collection), and the creation of special (quasi-autonomous) agencies and zones (e.g. Special Economic Zones such as in Aqaba, Jordan), along with the setting up of new regulatory agencies. The adoption of such New Public Management (NPM, see below) reforms has led to market-type mechanisms that are based on the separation of the ‘purchaser’ (the public sector, nominally still the guarantor of the satisfaction of public needs) from the ‘provider’ role (responsible for delivering the services, a role taken on increasingly by the private sector and civil society).

A key question that the contributions in this volume seek to address is how these reforms affect the authority and legitimacy of local governments and their elected representatives, as well as their public accountability vis-à-vis the citizens. For example, do the performance standards and requirements in public service contracts constitute a new form of ‘contract accountability’ and, if so, how is this type of accountability affecting the potential for public accountability in the traditional sense? At the same time, citizens are increasingly considered as ‘clients’ who are required to pay user charges for services in water, health and education, with little regard for equity considerations. The neoliberal reform incentives for citizens to conform to market logic are not limited to the public service sector, but extend to the fields of employment (see Maron, this collection) and social development (see Bergh, this collection). In both cases, the governments' discourse on the need to foster ‘self-enterprising’ and ‘self-reliant’ citizens tends to legitimize the bypassing and disempowerment of elected local governments in favour of private sector agents or ‘civil society organizations’, often co-opted by the ruling elites (see Brenner, 2004). A key theme explored in the contributions is thus how such reforms interact with and transform pre-existing local power configurations and identities, but also the political struggles and societal resistance they generate.

Some contributions to this collection (e.g. Bergh) present a rather bleak picture of the limited extent to which local governments in the region have acquired new institutional capacities to shape their own developmental pathways, despite the widespread neoliberal discourse on the benefits of decentralization. To a large degree, the paradigms in which the municipalities operate are being determined and constrained by the rules and regulations set out by the central government and international actors such as the World Bank, bilateral donors and multinational companies. However, the actual effects of neoliberal reforms targeting the local arena, whether they be marginalizing local governments (as seems to be the case in Jordan and Morocco) or actually enhancing local public accountability (as is the case in Çanakkale in Turkey) need to be examined case by case. They seem to depend on the initial situation of local governments (whether plagued with corruption, nepotism and unnecessary hirings for election or social purposes, and dependent on central government or the central government for funding; or relatively lean, transparent and self-sufficient) and the quality of local leadership.

Other contributions present more evidence of struggle and resistance. For example, Mohamed Said Saadi, writing on the privatization of water supply in Casablanca, demonstrates the extent to which neoliberal reforms can be a source of political participation and collective action, successful local resistance and accountability that might not have existed under pre-reform conditions. Similarly, by analysing the mundane negotiations regarding the duties of citizenship under a neoliberal state project (labour market reform in Israel), Asa Maron suggests that entrenched legacies of (republican) citizenship may be utilized to resist the compulsion of market citizenship.

To various extents (due to the inherent methodological difficulties in doing so), the contributions to this collection show that the roles played by local elites and their patronage networks in mediating state power cover a wide range: from the ‘lesser notables’ in Cairo's popular quarters that exhibit signs of ‘developmentally positive’ patrons, albeit based on Islamist values, and the tribal elites in Jordan who act as the lynchpin of the regime. While many of these local elites are thus co-opted by the ruling regimes, the contributions (particularly by Allès and Menza) also adopt a more nuanced view. Here, they follow Leftwich's (2007: 28) call to examine whether ‘the informal political institutions of patronage [can] sometimes contribute positively. Might there be good (developmentally) patrons and is there any way, politically, that they can be used to promote pro-poor growth?’ Such research distances itself from the assumption that the presence of political society is always a negative one, but instead conceives of local political society as a set of institutions, actors and cultural norms that is often constructively engaged in providing links between ‘government’ and ‘the public’, as well as in brokering deals and forming patterns of authority that hold these deals in place (Corbridge et al., 2005: 190–191; Mosse & Lewis, 2006).

The contributions by Menza, Saadi, Allès and Maron do provide evidence of local agency, and the capacity of local actors to prevent or reshape programmes of economic reform, impose accountability and exercise forms of participation and voice. In some of these, we see considerable evidence that systems of economic governance and the supply of social provision were subject to corruption, lack of accountability, lack of participation or transparency, poor quality and other dysfunctions for extended periods before economic reforms were proposed or implemented – and, in some cases, such as water supply in Lebanon and Morocco, reforms generated improvements.

All the articles in this collection are based on extensive fieldwork using a variety of methods. They range from multi-sited ethnography, network analysis, semi-structured interviews with key informants and participant observation to the critical analysis of unpublished government reports.

To conclude this section, the majority of the contributions in this collection explore how local elites appropriate processes of economic restructuring as an arena of political struggle, both among themselves and with the central government. Implicitly, this means recognizing the extent to which economic reforms are not a driving force in and of themselves, but are often subordinated to established patterns of political contestation among actors who seize on the opportunities that reforms offer to advance their political agendas. The findings also document the (discursive and physical) resistance by ordinary people against the effects of neoliberal policies, be it the forced imposition of ‘market citizenship’ or social exclusion caused by the unaffordability of market prices for public services. Such increasingly organized resistance may symbolize the incipient transformation of the ‘social nonmovements’ that have long engaged in ‘practices of everyday encroachments’ (see Bayat, 2010: 14–15) into active political actors, some of whom played a role in the 2011 uprisings. This shows that neoliberalism is a productive as well as destructive force which may open up opportunities for social mobilization, and the renegotiating of repressive or marginalizing social relations. However, such new opportunities are often, if not always, circumscribed by those same transformations (Perreault & Martin, 2005: 198).

Theoretical Framework and Analytical Approaches

Having outlined the main themes and findings of the collection, I now turn to the theoretical framework and analytical approaches that inform the various contributions.

Craig and Porter (2006: 11) define liberalism as ‘a political ideology and form of governance that has hybridized over time, but generally emphasizes the benefits of markets, the rule of universal law, [and] the need for individual human and especially property rights’. Similarly, Larner (2000: 5) states that the term ‘neo-liberalism’ denotes ‘new forms of political-economic governance premised on the extension of market relationships’. Whereas under Keynesian welfarism the state was charged with the provision of goods and services in order to ensure social well-being, neoliberalism is associated with the preference for a minimalist state. Dobbin et al. (2007: 450) summarize the broad historical forces that gave rise to the liberal character of recent political and economic reforms in a nutshell as: the American century of economic expansion, the victory of the Allies in World War II, the waning of the German and Japanese interventionist economic models, the unravelling of communism and the unprecedented economic growth during the 1990s in the paradigmatic liberal state, the United States.2

The preference for the market, followed by deregulation and privatization, stems from the belief that it is a better way of organizing economic activity due to the emphasis on competition, economic efficiency and choice. In this common conceptualization of neoliberalism as a policy framework, the renewed emphasis on markets is directly associated with the so-called globalization of capital in which new forms of globalized production relations and financial systems are forcing governments to abandon their commitment to the welfare state in the interest of economic efficiency and international competitiveness. While this conceptualization can and should be challenged (see below), it is hard to deny the ideological force of New Institutional Economics (NIE) which, together with a new emphasis on New Public Management (NPM), comprises the intellectual basis of the neoliberal challenge to Keynesian welfarism, and provides the theoretical impetus for deregulation and privatization (Larner, 2000: 6).

NIE is built on public choice theory, transactions cost theory and principal–agency theory and argues that efficient transactions (and ‘accountabilities’) depend on three ingredients. First, information, in the sense of both expertise and knowledge that can make better informed choices (in markets); second, laws, contracts and their efficient enforcement (supporting markets); and third, contest, in the sense of having competition (e.g. to contract to provide services) between multiple different players (i.e. market competition). NIE principles can thus be summarized as: ‘Inform, Enforce, Compete’ (Craig & Porter, 2006: 102).

There are clear links with New Public Management (NPM), which was viewed as the solution to improve public sector performance in service delivery in the 1990s in many developed countries, notably the UK, US and New Zealand. It was believed that rent-seeking public officials with little incentive to act in the ‘public interest’ were unlikely to pay attention to improving performance. Subjecting them to the pressures of the market or market-like mechanisms would give them the right kind of incentives. Hence, techniques developed in the management of private enterprises, such as contracting out, performance-based contracts, the creation of autonomous agencies, user fees, citizen charters and technology-driven complaint mechanisms, were applied to the public sector to various degrees. Competition was created by increasing the number of (private) providers and the variety of services they provide, enabling users to exercise ‘choice’. In addition, by separating policy making from provision, the ability of policy makers to sanction poor performance by providers would be improved. Decentralization and the privatization of services often accompanied these processes. By allowing state and non-state providers to flourish at the local level, the invisible hand of the market was expected to cater to a greater diversity of needs, allowing users to choose providers that best meet their needs in terms of price and quality (Joshi, 2008: 11).

As Heydemann (2004: 7) puts it,

for much of the 1980s and well into the 1990s, IFIs [International Financial Institutions] … viewed pre-economic reform networks as an obstacle that had to be overcome to ensure the success of new economic policies. Liberalization was seen as causing a shift from cronyism, patronage, and rent seeking to transparency, accountability, and well-defined property rights.

However, what is often forgotten is that some of the early neoliberal reforms themselves provided the fertile soil on which patronage relations began to thrive. While Structural Adjustment Programmes prompted the collapse of import substitution industries, contractions in public sector employment and the weakening effects of debt, informal sector economies in urban slums were growing rapidly. This meant that for much of the 1990s, an increasing share of employment was generated ‘outside the rule of law’, especially by the poor, who lacked secure access to resources, justice or political power. Their best hope (short of migration) involved not fighting patrimony, but aligning themselves to a local patron who could provide them with minor infrastructure, opportunities of lower-level public employment, or cash in return for their votes and other political support. Most importantly, this dynamic means that strong patrimonial governments have incentives to decentralize governance and establish mechanisms to directly channel largesse into local political domains. There, funds for local infrastructure could reinforce the position of local patrons. Patron–client relationships with contractors then recycle funds back into higher patrons' pockets and consolidate political power (Craig & Porter, 2006: 7–9).

The way to manage these contradictions inherent in neoliberal reforms was believed to lie in the shift from frank neoliberal structural adjustment to a softer, more ‘inclusive’ neoliberalism in the late 1990s, due also to violent protests against SAPs and the Asian crisis. Indeed, it could be argued that the international development agenda from 2000 consisted of three legs: promoting economic opportunity through global market integration, enhanced social and economic security, and empowerment through innovative governance arrangements for local delivery of public services. Craig and Porter (2006: 1–6) argue that this agenda was more than a new rhetorical garb for neoliberal Development, as it focused on ‘good governance’, either as a fourth leg or as an elaboration of the ‘empowerment’ dimension. In particular, it was decentralized aspects of governance that offered some of the most enticing promises for good governance. Responsive agencies held accountable by informed citizens would provide a less corrupt institutional environment for local business and better access to decentralized service delivery. NPM-like reforms were thus promoted by the IFIs such as the World Bank as a way of providing services ‘on the basis of what people choose, rather than what patrons want to bribe with’ (Craig & Porter, 2006: 9).

Decentralization or devolution meant shifting mandates and tasks (and hopefully funding) to multiple levels of local, regional, state/provincial authorities. This vertical disaggregation of the state came in addition to the horizontal disaggregation to the NGOs and private sector promoted by NPM. Both processes were driven and/or justified by NIE principles of enhanced voice, participation and multiple points of client exit that would ensure efficient allocation of resources and make the whole operation accountable. Indeed, the proliferation of local ‘accountabilities’ was seen as the prerequisite for achieving greater accountability of the whole (Craig & Porter, 2006: 17, 102–105). Brenner and Theodore (2002a: 341–342) refer to this development of viewing local (and regional) spaces increasingly as key institutional arenas for a wide range of policy experiments and political strategies intended to enhance labour market flexibility, territorial competitiveness and place-specific locational assets as the ‘new localism’. When applied to cities, this amounts to what Leitner et al. (2007: 4) call ‘neoliberal urbanism’, in which the neoliberal city is conceptualized first as an entrepreneurial city aiming at economic success in competition with other cities for investments, innovations and ‘creative classes’. Second, municipal bureaucracies, dedicated to social missions, are progressively replaced by professionalized quasi-public agencies responsible for promoting economic development, privatizing urban services and catalysing competition among public agencies. Decisions are increasingly driven by cost–benefit calculations rather than missions of service, equity, and social welfare. Third, it is a city whose residents are expected to behave responsibly and entrepreneurially and who are made responsible for their own successes and failures.

It is clear that the theoretical underpinnings of neoliberalism as a policy framework, especially for enabling good local governance, are far from borne out in reality in most, if not all, countries. Most importantly, especially in poor and rural areas, there is often no effective competition and users do not have adequate information about the true quality of services. This leads to a lack of accountability mechanisms between users and public service providers. The analysis of the World Bank's 2004 World Development Report entitled ‘Making Services Work for the Poor’ (World Bank 2003) recognizes that accountability relationships between the key stakeholders in service delivery – citizens, policy makers and service providers – are often not transparent, formalized or effective. This leads to a whole host of problems that plague services such as inadequate spending, the skewing of service provision towards the rich, corruption, absenteeism of staff and ultimately poor quality of services. This explains ‘inclusive neoliberalism's’ emphasis on empowering end users to counter the potential for abuse of power and position by politicians, public officials and providers (public or private). As the ‘long route’ of accountability has failed (from citizens electing policy makers who fail to check providers), greater emphasis is being placed on the ‘short route’ of accountability (directly between citizens and providers) and institutionalizing direct user participation and decentralization, which are expected to improve voice and consequently provider responsiveness. A variety of mechanisms are now commonly advocated ranging from formal computerized complaint systems, single window cells and citizen charters (Joshi, 2008: 12; see also Allès, this collection).

However, these mechanisms have also shown their shortcomings in practice. In particular, the focus on the individual consumer is problematic because it excludes the claims of those (particularly the poor) who are not served at all by providers, high transaction costs for exercising voice are not worth making if there are no credible sanctions for lack of responsiveness and, finally, individual citizens in poor communities may not be effective agents in holding either public or private providers to account on their own. This last point refers to the importance of collective action (Joshi, 2008: 12–13).

The broader geo-political environment for decentralization and ‘new localism’ reforms may also not be favourable to encourage greater state–society accountability. It is well established that while local governments have gained nominal control of local resources and policy agendas, they must operate within a context in which extra-local actors – frequently transnational corporations and multilateral lending institutions – wield vastly more influence. Thus, whereas local communities may have more opportunities to participate democratically in a narrow, formal sense, their range of options, and therefore their power to choose, has been straightjacketed and predetermined to a considerable extent (Perreault & Martin, 2005: 197). As Peck and Tickell (2002: 386) put it in more radical terms, ‘in the asymmetrical scale politics of neoliberalism, local institutions and actors were being given responsibility without power, while international institutions and actors were gaining power without responsibility’.

In short, in (inclusive) neoliberal reforms, ‘the power of clients’ voice is routinely overstated, as is the power of law, information and competition to create incentive structures to drive political economy in pro-poor ways' (Craig & Porter, 2006: 262). As stated earlier, a core issue here is the replacement of political accountability with contract accountability; ‘empowerment’ mechanisms to strengthen the latter often give a privileged position to market and civil society agencies as the prime means of articulating citizen voices which can have the effect of diluting the political accountability of elected leaders and state agencies to their citizens. In areas of service delivery, the assignment of key functions to complex mixes of private sector and civil society agencies often further atomizes accountabilities, and thus exacerbates the governance problems faced by local authorities. Craig and Porter (2006: 263) argue that ‘this is often a recipe not just for elite capture, but for ensuring that local political choices become preoccupied with responding to the changeable client politics and delivery of private goods’. However, as Saito (2008: 13) points out, local governments can promote democracy by emphasizing deliberative processes as well as improving economic efficiency but to do so they need strong ‘facilitative leadership’ to manage the processes of partnership formation.

It is obvious that the differences between the principles of neoliberalism as a policy framework and everyday practice discussed here can be explained by the fact that ‘neoliberal programs of capitalist restructuring are rarely, if ever, imposed in a pure form, for they are always introduced within politico-institutional contexts that have been molded significantly by earlier regulatory arrangements, institutionalized practices, and political compromises’ (Brenner & Theodore, 2002a: 14).

In fact, not only are neoliberal policies differently applied and transformed while they are being embedded and implemented in various contexts, but the political imaginaries on which they are based are complex and hybrid, rather than representing a unified and coherent philosophy (Larner, 2000: 12). This point is illustrated by the ongoing hybridization of economic and political liberalism, more recently reconfigured as ‘neoliberalism’, from the conservative neoliberalism of structural adjustment to the ‘inclusive’ neoliberalism of poverty reduction and good governance discussed above. Moreover, as Campbell and Pedersen (2001: 3) put it, neoliberalism is ‘less a coherent totality … than a loose conglomeration of institutions, ideas and policy prescriptions from which actors pick and choose depending on prevailing political, economic, social, historical and institutional conditions’. There is thus a need to also show ‘the fraught relationship between these travelling Liberal modes of governance and the actual local realities of patrimonial and territorial power… where they end up’ (Craig & Porter, 2006: 21–22).

This insight has been taken on board by what Heydemann (2004: 16–18) calls ‘third-generation research’ on neoliberalism: reform has been recast as a negotiated process of re-regulation that is shaped by the interaction of political and economic interests, including the interest of incumbents in remaining in power. Similarly, markets are now seen as politically constructed and maintained. According to Heydemann (2004: 21–22), we need to develop approaches for studying the politics of economic reform that provide a more complex understanding of actors (moving beyond their binary categorization as winners or losers), identities, interests and how the latter are expressed politically and change in response to policy shifts.

Most importantly, Craig and Porter (2006: 251) remind us that the travel and embedding of neoliberal policies from OECD countries to less developed ones was not a simple one-way traffic. Rather, recipients and donors became involved in complex relationships, wherein (mostly authoritarian) governments could at once be genuinely reformist (often in the wake of alarming crises) and equally concerned to find ways to be seen to be complying with good governance frames to ensure an uninterrupted flow of global largesse (while widely known ‘other’ practices persisted). Indeed, when it comes to decentralization, it is now widely accepted that neither poverty reduction nor realizing better allocative efficiency in resource use was at the forefront of the political imperatives driving it. Rather, decentralization everywhere has been driven by states, often authoritarian ones, looking to consolidate political support in local areas and use this to stabilize larger regime interests (Craig & Porter, 2006: 107). This is arguably true for the MENA region as well, where it could be said to be, at least until recently, part of the toolbox of ‘upgrading authoritarianism’ (see Bergh, 2010).

Larner (2000: 16) points out that neo-Marxist and socialist-feminist literatures on the ‘politics of restructuring’ and the post-structuralist literatures on governmentality help us understand that

different formulations of neoliberalism emerge out of a multiplicity of political forces always in competition with one another, producing unintended outcomes and unexpected alignments. Moreover, the emergence of new political projects is never a complete rupture with what has gone before, but rather is part of an ongoing process involving the recomposition of political rationalities, programmes and identities.

These observations lie at the basis of most of the articles in this volume, even if only a few of them (notably Asa Maron) apply the governmentality approach explicitly. Allès, Clark, Saadi, and Maron in particular illustrate very well – by making visible the claims of those all too often portrayed as the ‘victims’ of welfare state restructuring – how new welfare state or service delivery arrangements emerge out of political struggle, rather than being imposed in a top-down manner. Social movements become visible in these analyses, not simply as victims, but as active agents in the process of political–economic change. At the same time, some of the contributions highlight the fact that political ‘resistance’ is figured by and within, rather than being external to, the regimes of power it contests. Furthermore, the ‘neoliberalism as governmentality’ approach is useful in highlighting how ‘neo-liberal strategies of rule … encourage people to see themselves as individualized and active subjects responsible for enhancing their own wellbeing’ (Larner 2000: 12 and 17, quote on p. 13; see the articles by Bergh and Maron, this collection).

The academic literature has thus identified many mechanisms of institutional change that affected the rise of neoliberalism – including political struggle, diffusion, imitation, translation, learning and experimentation – depending on various types of institutionalism. Whereas rational choice theorists and historical institutionalists focus more on struggle and conflict (interest-based or more based on ideas and ideologies) and organizational institutionalists more on imitation and translation, discursive institutionalists focus on how elements of one discourse are translated into another and displace older definitions of problems and solutions (Campbell & Pedersen, 2001: 11–12). While there is no space here to discuss these approaches in detail, it is useful to briefly consider the main competing theories.

As stated earlier, the globalization of capital that forces governments to abandon their commitment to the welfare state in the interest of economic efficiency and international competitiveness is certainly an important explanation for the diffusion of neoliberal policies around the world. It arguably falls into the theory of coercion that tends to view neoliberalism as a hegemonic global project furthering ‘accumulation by dispossession’, with a prominent role assigned to hegemonic global capitalist classes as agents of neoliberal globalization, and considering neoliberal reforms as an expression of the intentionality of these actors (see Harvey, 2003, 2006). Another type of coercion is conditionality, i.e. when the EU, World Bank or the IMF impose their own (neoliberal) economic or political reform requirements in return for aid and loans, for example to make infrastructural investments. The wave of Structural Adjustment Programmes experienced by many MENA countries in the 1980s is a typical example of such conditionality. The weakest, though perhaps most pervasive, form of coercion operates through hegemonic ideas. Without exerting physical power or materially altering costs or benefits, dominant actors diffuse dominant ideas (such as the Washington Consensus) that become rationalized, often with elegant theoretical justifications, and influence how policy makers conceptualize their problems and potential solutions (Dobbin et al., 2007: 454–455).3

While it is thus plausible to argue that dominant actors directly shape world culture, Meyer et al. (1997) show how institutionalization and change do not occur solely through the purposive action of constructed actors. Constructivists such as John Meyer and David Strang see the diffusion of liberal policies as a matter of ideology, broadly understood. They argue that a ‘world polity’ has emerged over the past several hundred years, under which there has been a shifting consensus about the optimal means to achieving economic growth and political stability and participation, including neoliberalism. As with hegemonic ideas theorists, constructivists focus on the role of experts and international organizations that promote formal theories with policy implications, and the rhetorical power of these theories that carries new policies around the world. Moreover, countries that see themselves as members of sub-global groupings based on history, culture, language, level of development or geography may copy one another's policies because they infer that what works for a peer will work for them. Compared with coercion theorists, constructivists emphasize that although the United States and World Bank may promote policy models, followers are typically willing.

The institutionalization of such world models helps explain structural isomorphism in the face of enormous differences in resources and traditions, ritualized and rather loosely coupled organizational efforts (i.e. countries often signing on to reforms but failing to implement them), and elaborate structuration (i.e. their extreme tendency to organize, plan, to make policy and to posture around the goods of modern actorhood) to serve purposes that are largely of exogenous origins (Dobbin et al., 2007: 451–454, 462; Meyer et al., 1997: 144–145; Meyer, 2000: 243–244; 2007: 263–264). Meyer et al. (1997: 154) point out that decoupling is endemic because nation-states are modelled on an external culture whose elements may be inconsistent with local practices and requirements, and cannot simply be imported wholesale as a fully functioning system. Since world culture contains many variants of the dominant models, actors adopt conflicting principles eclectically. Most importantly, diffusion processes work at several levels and through a variety of linkages, yielding incoherence (Strang & Meyer 1993).

Like constructivists, learning theorists trace changes in policy to changes in ideas. However, rational learning theory focuses much more on the question of how policy makers draw lessons from the experiences of other countries. For example, having observed the apparent success of Thatcherism, governments around the world updated their prior assumptions about the costs and benefits of state ownership and undertook privatization (Dobbin et al., 2007: 460–463; see also Lee & Strang, 2006, who explain the diffusion of public sector downsizing policies in OECD countries by referring to vicarious learning).

This brief review of theories of policy diffusion serves to make the point that rather than viewing neoliberalism as a deliberate hegemonic global project, other conceptions of liberal globalization as a process in which causality is diffuse and not as easily linked to specific agents whose actions reflect an intent to achieve specific outcomes may be more appropriate and useful.

The Rise and Effects of Neoliberalism in the Southern Mediterranean

There is no space here to discuss the rise of neoliberalism in the Southern Mediterranean and its (macro-economic) effects in detail, but it is useful to at least give some idea of the ‘before’ picture that sets the context for structural adjustment and other neoliberal policies, as well as some indication of their effects, especially at the local level, to set the context for the contributions that follow.

Heydemann (2007: 31–34) argues that although differences existed, within about a decade of becoming independent, oppositional elites came to power who established national-populist pacts, whether in explicitly populist single-party regimes (such as Syria, Egypt, Iraq, Tunisia and Algeria) or as major features within traditional systems of rule (such as the Jordanian and Moroccan monarchies). Their core public policies and legitimating discourses reflected a preference for redistribution and social equity over growth; for states over markets in the management of national economies; the protection of local markets from global competition; and, finally, a vision of the political arena as an expression of the organic unity of the nation rather than as a site of political contestation. These elements explain the wave of nationalizations that led to a dramatic, rapid expansion in the scale of public sectors and the consolidation of a heavily state-dominated form of import substitution industrialization. In the political sphere, the region saw a move toward highly centralized populist and corporatist systems designed to contain and control mass politics. This produced informal modes of governance and resource allocation that were ‘dense, decentralized and broadly inclusionary – although they could hardly be seen as egalitarian or as adequate replacements for formal mechanisms of political and economic participation’ (Heydemann, 2007: 34).

These informal arrangements contributed significantly to the adaptive capacity of authoritarian regimes to sustain themselves in power, as access to networks typically was controlled by the political elites who dominated formal institutions of rule, from internal security services to trade unions, from ruling parties to the military and the public sector. Furthermore, informal networks and formal institutions developed symbiotically, creating all kinds of bargaining opportunities for regimes in search of support (Heydemann, 2007: 34).

However, these national-populist pacts came under pressure in the 1980s and 1990s from rising socio-economic challenges, including declining oil revenues and the inability of the state to co-opt the educated youth into what used to be a relatively well-paid civil service that acted as a mechanism for upward social mobility. Structural adjustment measures imposed by the IMF and the World Bank included large-scale privatization of public assets and dismantling of most barriers to international trade. As the reforms were at best carried out in a political context of limited accountability of public officials, the process led to further enrichment of politically well-connected individuals who managed to appropriate public assets cheaply and to replace formal state monopolies with effectively private ones. Hence, while the economy became formally free, it did not have the basic elements of a free market, namely the ability of new firms to enter it. In fact, regardless of whether one agrees or disagrees with neoliberal reforms, they could have been more palatable to Arab citizens had they been accompanied by well-targeted social protection programmes and participation of representative institutions and syndicates in a transparent dialogue between winners and losers of these reform processes. The relative absence of these institutions further reinforced the rentier character of the state and explains the rise in poverty: the level of US$2 per person per day poverty increased from 24.8 per cent in 1990 to 29.9 per cent in 1998 (UNDP, 2011: 4, 107; Bush, 2004: 681; Kienle, 2003b: 9; see also King, 2003 and Murphy, 2006 for the Tunisian case).

In response to these developments, a more ‘inclusive neoliberalism’ (as discussed earlier) did emerge in the region though, for example in the form of social funds, including in Egypt. However, as Elyachar (2005: 11, 83) shows, while the World Bank and others promoted the ‘generation of structural adjustment’ as dynamic agents of entrepreneurship through microenterprise projects and the Social Fund, the kind of market they were meant to foster was an abstraction to which they could not sell, and instead these mechanisms provided a means through which the informal economy could be reabsorbed into the state, along with informal information networks.

Thus, on the whole, at least until early 2011, pre-reform economic networks have proven to be quite resilient, and privileged economic actors have been effective in preserving their positions from the presumed consequences of economic liberalization. However, and this is what the contributions in this special collection seek to illustrate, there are significant variations in the political processes through which structures of rent seeking are reorganized. Reform is thus also constitutive of new networks, distributive coalitions and political alliances, which sometimes it breaks down. For example, the politically driven privatizations in Egypt and Tunisia created a new class of superwealthy entrepreneurs which became the target of popular ire and some of them decided to no longer support the authoritarian regimes (Heydemann, 2004: 8, 12; Gause, 2011: 86).

Indeed, as the Arab uprisings made clear, old and new formal and informal networks (such as trade unions but also ‘facebook communities’) were mobilized by ordinary Arab citizens to rise up against the neoliberal reforms imposed by Western organizations like the IMF and the World Bank (but in some cases these were also home-grown) that led to an even more unequal distribution of wealth in their countries and impoverished the masses over the last two decades (Teti & Gervasio, 2011; Pace & Cavatorta, 2012; see the edited volume by Beinin and Vairel, 2011 for examples of earlier political contestations and mobilizations). By neglecting the structural and historical factors leading to social exclusion, neoliberal reforms may thus have sown the seeds of their own destruction (see Armbrust, 2011).

As for the local level, the same authoritarian and repressive dynamics of the central power have been reproduced there, and municipalities and regions were the physical space where the 2011 protests were born and are fuelled (Santonja, 2011: 1). Indeed, disempowered local government should be seen as an important structural driver of exclusion that led to the uprisings. Despite some legal commitment to decentralize power in several Arab countries (e.g. Iraq, Egypt, Lebanon and Morocco), diffusion of political and financial control is still weak, with the possible exception of Morocco. In line with the thesis discussed earlier, i.e. that decentralization reforms in most cases represent a regime strategy to entrench its support in peripheral areas, devolution reforms have been counterbalanced by measures that in fact increase the power of supervision by centrally appointed government representatives. Administrative decentralization is the main feature of local government, coupled often with the marginalization of local societal forces from the process of keeping local governments accountable. The latter is due to the weakness of local electoral processes (electoral laws often favour regime-friendly parties) and thus of locally elected councils, and the transfer of tasks to private national and multinational companies through delegation, licensing and public–private partnerships discussed earlier (UNDP, 2011: 67, 71; Bergh, 2010; Ayeb, 2011: 472; Santonja, 2011).

The Tunisian revolution, ignited by a young man who was forced to work as a street vendor in one of the deprived regions of the country, brought the troubles of local governance to the fore. The Tunisian call for the dissolution of all local councils and the removal of local governors (and similar developments in Egypt) underlines the deep distrust of local government and the serious rift between people and their local government, despite some features of ‘inclusive neoliberalism’ that were introduced to address some of these issues, e.g. the new generation of more inclusive national territorial planning tools (see the articles by Clark and Bergh in this collection), increased possibilities of cooperation between local governments and civil society organizations in service provision, and the promotion of women's political participation in local governance institutions.

To conclude, the contributions to this collection examine how state power is being re-articulated but also challenged at sub-national levels in the region. They explore the effects of neoliberal economic and local governance reforms on local patronage networks, public accountability and state–society relations. Many of these issues deserve more in-depth and systematic comparative research. The theme of local manifestations of resistance to (the consequences of) neoliberal reforms and the emergence of new social actors is clearly one that merits further research (see the contributions in the special issue of Mediterranean Politics, 12(2), July 2012). Similarly, recent social accountability initiatives in the region (see World Bank, 2011) would provide interesting case studies of more ‘inclusive’ neoliberal policies and how they might be transformed or resisted by local actors. Other areas for future research that would usefully complement the contributions in this collection include, first, more systematic historical comparisons between the configuration of patronage systems at the local level prior to and following neoliberal decentralization reforms; and, second, detailed analyses of the diffusion mechanisms of such policies from the supra-national, to the national and local levels to test the applicability of some of the diffusion theories discussed above.

Acknowledgements

I would like to acknowledge the valuable inputs by my co-director Ulaş Bayraktar and all the other participants in the Workshop held at the Twelfth Mediterranean Research Meeting in Florence, Italy, on 6–9 April 2011, on which this collection is based. They include Christèle Allès, Koenraad Bogaert, Malika Bouziane, Janine A. Clark, Marion Dixon, Gilbert Doumit, Eleanor Gao, Carmen Geha, Anja Hoffmann, Florian Kohstall, Asa Maron, Mohamed Fahmy Menza, Mohamed Said Saadi, Osman Savaskan, Bilgesu Sümer (whose co-author, Zeynep Kadirbeyoğlu unfortunately could not be present) and Sami Zemni. I regret that we could not include all their excellent papers in this collection. I would also like to thank the European University Institute in Florence for supporting the workshop. I am grateful to Michael Willis and Francesco Cavatorta for their comments and encouragement on the initial proposal of the collection. The anonymous reviewer provided very valuable comments which, among others, helped me enormously in rewriting this introduction. Heartfelt thanks are due to all the contributors for their smooth cooperation and the journal editors for their support and patience throughout. Finally, I would like to acknowledge the support of my family and that of my family-in-law. I would like to dedicate this collection to the memory of my father-in-law, Joseph J. Zeenni.

Notes

¹ All the papers in this collection were first presented at the workshop entitled ‘Neo-liberal reforms, local elites, and accountability in public service provision in the MENA region’, co-directed by Sylvia I. Bergh and Ulaş Bayraktar, held at the Twelfth Mediterranean Research Meeting, Florence, Italy, 6–9 April 2011. The workshop description is available at http://www.eui.eu/DepartmentsAndCentres/RobertSchumanCentre/Research/InternationalTransnationalRelations/MediterraneanProgramme/MRM/MRM2011/ws13.aspx.

² Space constraints do not allow for a discussion on the history of neoliberalism (see for example Leitner et al., 2007: 6ff.).

³ Competition theorists offer another theory of diffusion that also points to changes in incentives (see Dobbin et al., 2007: 457).