ESTABLISHING UTOPIA: EXPLORING THE POLITICAL ORIGINS OF ECONOMIC POLICY IN ALGERIA

Kay Adamson

Introduction

The aim of this paper is to suggest that a part of understanding the current problems which face the Algerian economy and, consequently, possible solutions, requires a re-examination of the life and work of the late French economist François Perroux. Perroux, who was a significant figure in both post-World War II French and post-independence Algerian economic policy-making, also left behind an immense body of economic writings. The Algerian 'economic model' which took shape in the late 1960s and 1970s and was then implemented by President Boumedienne, was an attempt by Perroux and others to put into practice an economic theory of growth and development. Whilst there is a substantial body of criticism of the outcomes of this experiment, that critique has attributed its failings to the political sphere; thus the model itself has been subject to rather less scrutiny. Yet authors such as De Soto (2000) and Frank (1998), on the one hand, and Castells (1998), on the other, have not only offered very different visions of the way in which economies of the developing countries work but also of the way in which economic activity at the global level works. It is not simply a matter of technical adjustment of the Algerian economy that is necessary, but of a deeper rethink of some of the starting points from which the current structures have developed.

This chapter revisits a number of issues concerned with the relationship between ideology and systemic economic and political change. Part of the reason for doing so stems from the distance, highlighted by three recent studies, that lies between the different solutions to what has previously seemed to be an intractable problem - how to account for the gap between the industrialised economies of the West and the poorest of the rest of the world. The disparity in the nature of the agenda for change which they each offer, is an indication of the absence of consensus, not about the existence of the problem of economic inequality between states, but about the reasons why it has persisted irrespective of whether or not the countries concerned have followed a 'Left' or 'Right' economic and political agenda. Three of the authors referred to - Hernando De Soto, Andre Gunder Frank and Manual Castells have all, over many years, made contributions to the discussion; indeed it was Frank whose evocative 'development of underdevelopment' thesisinspired a generation of commentators on political and economic problems in the Third World. Since then, Frank has taken up the challenge posed by the world systems' theory associated with Immanuel Wallerstein. ReOrient (1998) is Frank's response to the arguments raised by Wallerstein. In contrast, Castells who has been examining the impact of the technology shift encapsulated by the phrase the 'information age' explores the capacity of different types of societies to benefit from the rapid technological changes of the last ten years (Castells 1998). De Soto who was intimately involved in economic reform policies under the Peruvian president, Alberto Fujimori, offers, in The Mystery of Capital (De Soto 2000), a deceptively simple argument for why poor countries have remained poor. His argument has two principal strands. The first is that the poor of the developing countries are only poor because they are unable to realise the capital resources, which are in their possession. De Soto then identifies property as the most significant of these capital resources. His argument is that it is the non-realisation as a capital resource of property that imposes limits on the capacity of poor people to escape their poverty. The second part of his argument is that the difficulties in registering title are the consequence of the existence in poor countries of large bureaucracies, which depend upon the operation of long and complex procedures to register title. The result is that most individuals are deterred from the attempt to register title by the nature of the processes involved and as a result are prevented from making maximum use of their capital resources.

Castells, Frank and de Soto however, can be seen as reflecting a concern which was originally posed when the Spanish and Portuguese colonies in South America won their political emancipation in the nineteenth century, and which has preoccupied economists and others ever since. It was a concern that took on a new meaning in the 1960s and 1970s when the political emancipation of European colonial empires in Africa and Asia took place. It was this central question of what political emancipation meant for the economy, which inspired Perroux, Hirschman (1981) and others in the 1950s and 1960s, and led to a focus on the nature of economic growth and the links between growth and economic development. Frank can be seen in many ways as representative of a critical perspective on the work of these authors; and yet it may also be argued that they all actually shared a fundamental assumption, which lies at the heart of not only the programmes for growth and development but also the critique. This fundamental assumption, apparent also in De Soto, was that articulated by Brenner (1977). Brenner's argument was that work on development, irrespective of its Left/Right credentials, was reliant upon Adam Smith's thesis on capitalist development in Book I of The Wealth of Nations (1776). As a result, both Left and Right had a tendency to perceive the question of development as a problem primarily of markets. Certainly, by perceiving the issue in this way, what is offered is the possibility that issues of economic development can be resolved by...