The World Bank’s The State In A Changing World: The Global Politics of TQM

Gerard Greenfield

IT’S IRONIC THAT the Bill Jordan, General Secretary of the International Confederation of Free Trade Unions (ICFTU), welcomed the World Bank’s latest World Development Report, The State in a Changing World (Hong Kong: Oxford University Press, 1997), for its recognition of the importance of democracy.

In Jordan’s words: “We welcome the World Bank’s change of heart and its focus on an effective, accountable state as essential for democracy.” (ICFTU Online, June 25, 1997)

Well, at first I thought that the World Bank must have sent him a special copy. My copy appears to be different. “Democracy” isn’t there in the overview or in Part 1 of the report, “Rethinking the State.”

Maybe where I read “an effective state,” Bill reads, “democratic state.” Of course, an effective state sounds refreshing, but for those of us who live under authoritarian political regimes or parliamentary regimes which are concerned with increasing the repressive functions of the state, effectiveness usually means the systematic repression of democratic practices and ideas.

Keep reading, and there it is! On page 111 we have the first mention of democracy: “In a democratic society elections are the primary manifestation of citizen voice.” No mention yet about the importance of democracy, and it seems that we (“citizen”) only have once voice, not many. Nonetheless, Bill read it here somewhere, so read on.

On page 113: “In most societies, democratic or not, citizens seek representation of their interests beyond the ballot: as taxpayers, as users of public services, and increasingly as clients or members of NGOs and voluntary associations.”

In an age where roads and water supply have been privatized, I’m not sure if the mere use of “public services” is a viable substitute for democracy. And in an age of widespread unemployment and increasing poverty, access to the state based on tax-paying seems to run against the logic of democracy.

Parliamentary democracy receives a hammering early in the report, where the Bank claims that important reforms like increasing consumption taxes “might take a vote of parliament, implying delays and political compromise.” (5)

Of course, this doesn’t just apply to consumption taxes. The ruling party in South Korea avoided untidy delays and compromises when they passed anti-worker labor laws and the National Security Planning Agency Act at 6am on December 26, 1996, in the absence of members of parliament from the opposition parties. This only took seven minutes.

Finally, the report mentions that development, “is not simply a matter of democracy versus authoritarianism.” (157) In fact, authoritarianism, rather than democracy, is the subject of discussion:

“Whereas ineffective authoritarian states have been directly responsible for economic decline in Africa, many East Asian countries have experienced remarkable growth (with some improvement in equity) under authoritarian regimes. As the previous chapter implied, the link between authoritarianism and economic decline, so evident in Africa, has been inoperative in Asian countries, largely because of their powerful commitment to rapid economic development, strong administrative capability, and institutionalized links with stakeholders, such as private firms, as well as their ability to deliver on the economic and social fundamentals: sound economic management, basic education and health care, and infrastructure.” (163)

Smash the People

So there we have it: The violent and bloody repression of independent labor movements and social movements in the early stages of growth, the repression of freedom of association and freedom of speech, destruction or severe restriction of opposition parties, and the fusion of the interests of the state and large conglomerates is the way forward.

The report celebrates the fact that in East Asia the “effective state” is “engaged in a productive partnership with the private sector.” (163)

Contrary to any notion of “democracy,” the main “stakeholders” are private firms. That is why in the discussion of the “effectiveness of the state,” the report bases its conclusions on interviews with 3,600 “entrepreneurs” in sixty-nine countries.

There are no interviews with workers, farmers, street traders or the self-employed in the informal sector—collectively referred to in the report as “citizen.”

Of course there’s more to it than that. Within this process of rapid economic growth, there is a constant re-engineering of the state’s strategy of domination and control.

While the partnership with capital remains, direct forms of repression and coercion are replaced with more effective and sustainable mechanisms for keeping us (“citizen”) under control.

And this is where the report’s real agenda is clear: a Total Quality Management (TQM) strategy for political elites around the world.

The report is not, as Bill Jordan and others suggest, a reflection of the World Bank’s recognition of the role of the state and the importance of democracy.

It’s about rethinking ways of enforcing coercive economic liberalization and privatization. Its advice, drawn largely from the experience of “successful” authoritarian regimes in East Asia, is premised on the recognition of regime failure (as opposed to market failure) in convincing the people that all this is good for them.

Whether it’s a highly profitable dam project (profitable for multinationals) or cuts to welfare spending, the common failure has been ineffective attempts at coercing the masses into agreement.

The solution? A sort of global TQM, where persuasion and the ability to get people’s acquiescence to what is being done to them is the key to getting the prices right. Imposing privatization programs, for example, means “winning the acquiescence of employees” (6), not responding to workers’ demands for alternative ways of reforming and reorganizing state and public enterprises.

With this emphasis on convincing the masses, the report asks: “How can [the government] convince trade union members that it will not cut their real income by raising the cost of living?”(50) (Given that it’s impossible to raise the cost of living without cutting workers’ real incomes, the answer obviously has something to do with reducing the number of trade union members!)

To overcome resistance to economic liberalization and deregulation, the state must be more effective in its “use of communication and consensus building to render reform intelligible to citizens and firms and enhance its chances of success.” (11)

This is about how to impose a policy agenda already set by the political elite. Indeed “farsighted political leaders” have succeeded “because they spelled out a longer-term vision for their society, allowing people to see beyond the immediate pain of adjustment. Effective leaders give their people a sense of owning the reforms—a sense that reform is not something imposed from without.” (14)

Rather than democratic participation and popular control, this strategy is about giving people the “sense” that reforms are not being imposed on them. The point is that these reforms are imposed on the people from above—and the problem that the World Bank is concerned with is how to make them believe that this isn’t the case.

This is precisely the aim of TQM and other Human Resource Management (HRM) strategies in the workplace: How can the management cut wages, sack workers, increase working hours, and generally downsize, while at the same time convincing workers that this is not being imposed on them?

If workers feel involved, feel part of the team, and feel that they are being consulted, then they’ll “have a sense of owning” all of the changes associated with greater flexibility, casualisation, diminished income and job security, wage cuts and retrenchments.

Just as TQM and HRM involves a special team of managers and supervisors whose role it is to convince workers that all this re-engineering is good for them, the World Bank concludes that “an effective state” requires “the presence of someone who can convince the public that the leap is worth making is a potent reform weapon indeed.” (156)

Thus the World Bank’s “Agenda for Change” (157-167) is remarkably clear: making the state more “effective” requires a shift from coercion to a better mix of coercion and consent. It is not, as some have suggested, an agenda for bringing the state back in, but rather a game plan for political elites on how to make their hegemony more effective.

ATC 73, March-April 1998