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International Financial Institutions and Post-communist Labour Reform: A Case of Utopian Liberalism?

Since 1999 the international financial institutions (IFI) such as the World Bank and IMF have reformed their approach to loan and grant conditionality. As part of the reforms recipient states are encouraged to consult widely with civil society organisations on the internal policy programmes promoted by the IFIs. Individual recipient countries are then assumed to take ownership of policy change without recourse to IFI sanctions. However, many of the policy changes encouraged by the IFIs remain locked in the neo-liberal prescriptive framework of labour market de-regulation, privatisation and public sector reform. As such the collective interests of labour remain threatened. The post Communist states of CEE and former Yugoslavia have been active in recent years in seeking funds from the IFIs. At the same time the legacy of strong labour codes is directly challenged by neo-liberal policy, thus creating a potential arena of contention. This paper examines the reality of the new IFI approach as it relates to labour reform in these states. Evidence is presented of continued avoidance of real or meaningful consultation between the IFIs and client states with labour unions. The authors utilise textual analysis of key IFI documents to present an argument which expresses the reforms of the IFIs as a utopian liberal effort to obscure their underlying continuing commitment to pro-business and anti-labour prescription.