The paradox of agricultural market reform: Foreign aid and the rise of subsistence production in Moldova, 1991--2008

This dissertation poses the question: Why are free market reforms producing a proliferation of nonmarket forms in the countryside of the Commonwealth of Independent States? The focus is on the agricultural sector of Moldova, which has been lauded as a leader in market reform among CIS countries. It finds that two types of nonmarket organizations have emerged since Moldovan independence: large-scale farms that withhold their production from the market, and fragmented subsistence producers who live in absolute poverty. This dissertation turns to Polanyi's double movement of market and society to explain these outcomes. The theoretical argument put forward is that large scale farms turned production inward as a response to a market environment that was hostile to exchange, while fragmented subsistence producers emerged as an expression of the way in which the market engages Moldovan agricultural land and labor. The impetus behind the emergence of both forms is found when the market alone cannot sustain the livelihoods of those who depend on it for survival.;These outcomes were not inevitable. As this dissertation shows, the influx of hostile markets was the result of deliberate state policy informed by neoliberal ideology and perpetuated by principal actors in the foreign assistance community. Neoliberal policy was driven by multi-lateral loan conditionality and a bilateral donor decollectivization model that sought to turn the rural managerial class into a capitalist one. Once foreign assistance workers obtained the authority to implement the model, they were able to deploy state policy in a way the government could not.;Ostensibly, the market reforms sought to individualize agriculture so that commercial smallholding could emerge. Indeed, there exists a growing consensus among international agricultural organizations that the commercial family farm is the organizational form most conducive to the laws of the free market across space and time. Yet the Moldovan case study points to limits of both free market and family farm universalism. Instead, the findings of this dissertation suggest that effective rural development rests upon the capacity of the state to both facilitate the flows of the free market and protect rural society from those flows.