Defining, censuring, and resolving: the EBRD, collective organic intellectuals and the global financial crisis in Eastern Central Europe

ABSTRACT

The paper asks what role the European Bank for Reconstruction and Development (EBRD) plays in coordinating policy reform in post-crisis Eastern Central Europe (ECE). How did the EBRD attempt to mitigate the effects of the crisis and what role did the institution play in the configuration of a post-crisis European political economy? The paper analyses the content of the annual EBRD Transition Reports (TR) as representation of thinking in the EBRD Chief Economist’s Office on the salient concerns relevant to its region of operations. The paper analyses TRs from 2007 to 2013 assessing the discursive shifts inside the EBRD establishing (1) how the TRs frame whether the region is in crisis, (2) apportioning censure for causing crisis and (3) how the EBRD TRs delineate the development of appropriate policy responses to the crisis. In conclusion the paper situates these processes as evidence of a further iteration of ‘fail forwards’ neoliberalization.

KEYWORDS:

• European Bank for Reconstruction and Development
• fail forwards neoliberalization
• collective organic intellectuals
• Eastern Central Europe

Acknowledgements

Versions of this paper were presented at the 2016 International Studies Association annual convention in Atlanta and the University of Birmingham’s POLSIS Political Economy and European Studies Research Groups Workshop in 2018. The paper benefited enormously from comments and suggestions at both. In addition, participants at the 2017 Leverage and Marketisation The Diffusion of the Neoliberal Development Agenda from North to South and Back Again Workshop at the Scuola Normale Superiore in Florence provided invaluable close engagement. The author is grateful to Toby Carroll, Judith Clifton and Darryl Jarvis for the original invitation, and subsequent editorial work. Alex Nunn and Huw Macartney very kindly commented on previous drafts, and a word of appreciation for the two referees from the journal who both engaged so thoroughly, positively and improved the original submission beyond recognition. Any errors remain my own.

Disclosure statement

No potential conflict of interest was reported by the author.

ORCID

Stuart Shields http://orcid.org/0000-0003-4092-6070

Notes

1 There was limited academic engagement with the policy role of EBRD after it was set up in the early stages of post-communist transition (Bronstone, 1999; Weber, 1994) alongside occasional mentions of the institution as part of a broader analysis of the impact of regionalisation in ECE (Smith, 2002). The little current research that exists on this institution has periodized the EBRD’s reform strategies in ECE (Shields, 2016), appraised the gendered dimensions of EBRD policy formulations (Shields & Wallin, 2015) and explored the indicators adopted to evaluate country progress in transition (Myant & Drahokoupil, 2012). For an institution that invested €9.4 billion across Europe, Asia, and the Middle East in 2015 alone (EBRD, 2015a), this remains a serious lacuna in our knowledge of the contemporary IPE. There is of course though a veritable landslide of material produced by the EBRD itself, as even the most cursory glance at the institutional website affirms, and the institution remains ‘the primary source’ of data on transition for academic and other IFIs (Carvalho, Nepal, & Jamasb, 2016, p. 1332). In this section, the paper builds on the notion of the collective organic intellectual explored above and thinks about how the EBRD has participated in the establishment of neoliberal hegemony in ECE, and increasingly well beyond, since the crisis began. The paper offers some brief contextualising comments on the EBRD’s establishment that might be helpful at this point given the general absence of the EBRD in the literature.

2 The EBRD was formally established on 29 May 1990 and was operational in less than a year, on 15 April 1991 (Shihata & Attali, 1990). The EBRD, a mix of Western lenders and ECE borrowers, is the largest single investor in the private sectors of ECE. The EBRD is owned by its 64 member states and two intergovernmental institutions (the EU and EIB). Since 1991 it has participated in 4065 projects, investing €90.1 billion. This is a substantial player in regional development, and as noted, long ignored in academic debates. Alongside investment in the private sector the EBRD also invests in state-owned enterprises committed to privatisation. It is open about its parallelism alongside the OECD, the IMF, the World Bank and UN specialised agencies. One recent example would be the Life in Transition survey collaboration with the World Bank to analyse and understand how transition has affected the lives of people in the countries of operation (EBRD, 2011). The most obvious recent example of this is the Vienna Initiative set up in 2008 to prevent foreign capital flight after the global financial crisis (EBRD, 2009, p. 18). This included the EBRD, EIB, European Commission, IMF, and the World Bank.

3 The post-colonial comparison sits uneasily with many scholars of the region, but critical political economy engagement with institutions like the EBRD start to expose something akin to a form of Bayart’s extraversion whereby ECE has actively participated in the processes that have created and maintained the region’s peripheral position within European political economy. As Bayart notes, ‘forces which constituted the colonial state and the colonial relations of production were not all exterior to the society which was being colonized’ (Bayart, 2000, p. 231). There is a long history in ECE of elites being imbricated in the colonial/post-colonial process, see Wolff (1994) for historical exploration of this and (Zarycki, 2014) on the contemporary synthesis of peripheralisation and the role of the intelligentsia.

4 As Gramsci indicated this communication is crucial,

The popular element ‘feels’ but does not understand or know. The intellectual element ‘knows’ but does not understand and, above all, does not feel  … One cannot make history-politics without passion, that is, without being emotionally tied to the people, without feeling the rudimentary passions of the people, understanding them, and hence explaining [and justifying] them in the specific historical situation and linking them dialectically to the laws of history, that is, to a scientifically elaborated superior conception of the world: namely, ‘knowledge’. (Gramsci, 1996, p. 173)

5 Beginning in 1994 the EBRD produced a set of nine transition indicators designed to measure individual countries’ progress (EBRD, 1995, p. 11; see also Smith, 2002). In this way the EBRD created a discursive standard as a benchmark of transition, which meant countries’ progress could be compared with one another and over time. Such benchmarking is far reaching, despite,

[Sounding] like a fancy word for goal setting, but its meaning is rather different. Benchmarking refers to the practice of a firm or agency undertaking internal reforms on the basis of studying and then importing the practices of other, more successful firms or agencies. In other words, benchmarks are set by industry leaders, and benchmarking represents the process of non- leaders understanding, distilling, and then implementing the practices that make those leaders successful. (Brown, 2015, p. 136)

The paper does not seek to engage with the indicators, but just notes their important here as one of the mechanisms at work for the construction of neoliberal rationalities. For one of the few serious critical engagements see Myant and Drahokoupil (2012).

6 Perhaps other tangential evidence might be helpful? In a European Parliament report on Transitional allowances for former EU office holders, ‘Room for improvement is identified regarding the effectiveness of transitional allowances, e.g. in terms of preventing conflicts of interest’ (European Parliament, 2017, p. 55). Which institution features as a regular destination of former EU office holders? The EBRD.

7 It is worth noting that Egypt is now one of the EBRD’s countries of operation (Shields, 2016).

8 For mainstream affirmation of this, see Becker, Jäger, Leubolt, and Weissenbacher (2010); Berglof et al. (2015, p. 90); and a critical account in Gill (2017, pp. 638–641).

Additional information

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Stuart Shields

Stuart Shields teaches International Political Economy at The University of Manchester and is co-Director of the Manchester Political Economy Centre. He is co-editor of Critical International Political Economy: Dialogue, Debate, Dissensus (2011). His book The International Political Economy of Transition: Neoliberal Hegemony and Eastern Central Europe’s Transformation was published in 2012 and short-listed for the 2013 BISA IPEG annual book prize. He is co-editor of the Lynne Rienner Advances in International Political Economy series.