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ACTA UNIVERSITATIS UPSALIENSIS Uppsala Studies in Economic History, 97 Cover illustration: Helena Laukkanen © 2013 Johanna Värlander A Genealogy of Governing Economic Behaviour Small-scale credit in Malawi 1930–2010 Dissertation presented at Uppsala University to be publicly examined in Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, Friday, October 11, 2013 at 10:15 for the degree of Doctor of Philosophy. The examination will be conducted in Swedish. Abstract Värlander, J. 2013. A Genealogy of Governing Economic Behaviour: Small-scale credit in Malawi 1930–2010. Acta Universitatis Upsaliensis. Uppsala Studies in Economic History 97. 290 pp. Uppsala. ISBN 978-91-554-8740-9. In this thesis the aim has been to analyse changes and continuity in the governing of economic behaviour in small-scale credit schemes in colonial Nyasaland and independent Malawi from 1930 until 2010. Furthermore, how the effects of history in terms of how colonial and post- colonial development discourses and practices have been rephrased and reused in the early 21st century are discussed. The study focuses on the teaching and fostering of borrowers’ economic behaviour in order to reach increased living standards. The genealogical approach to the history of small-scale credit has made it possible to analyse a selection of colonial and post-colonial small-scale credit programs and microcredit organisations operating in the early 21st century. To analyse the governing of economic behaviour in the small-scale credit schemes, three aspects of the Foucauldian concept of governmentality are used: problematics of government, political rationality and governmentality technologies. The findings of the thesis, which are based on interviews, unofficial and official written sources, show that the genealogy of governing economic behaviour through small-scale credit schemes has varied over time depending on perceptions of the ideal actor’s economic behav- iour. Despite this, some continuities have been identified. For example, there is a continuity in the problematics of government, the analysis of the perceived development problem and how small-scale credit was to be a solution. The study indicates that a linear and universal finan- cial history is used in theory and practice and consequently that the local Malawian national history of small-scale credit has been ignored. Despite different political rationalities during the period there is a continuity in funding small-scale credit with external money, and the government’s interest in small-scale credit has also persisted. One effect of history is that small-scale credit seems to be politically efficient, but economically inefficient. In the colonial period and in more recent times, it seems like governmentality technologies regarding lending are quite ad hoc, for example regarding the supervision and distributions of loans. One effect of history is subordinated positions for borrowers and a governing towards economic responsibility, rather than entrepreneurship. Keywords: governmentality, small-scale credit, microcredit, Malawi Johanna Värlander, Uppsala University, Department of Economic History, Box 513, SE-751 20 Uppsala, Sweden. © Johanna Värlander 2013 ISSN 0346-6493 ISBN 978-91-554-8740-9 urn:nbn:se:uu:diva-206643 (http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-206643) Printed by Elanders Sverige AB, 2013 Till Erla Content List of tables and figures ................................................................................ 14 Acronyms ....................................................................................................... 15 Preface ............................................................................................................ 17 CHAPTER 1. Genealogy and governmentality ........................................... 19 Scope of the thesis .................................................................................... 20 The case – small-scale credit schemes in Malawi ............................... 21 Genealogy – an alternative perspective of history .................................... 22 Eurocentric ideas of development ....................................................... 22 Credit schemes – development strategies with norms of linearity .... 24 Linear history writing in studies of small-scale credit ........................ 26 Genealogy, themes and the effects of history ...................................... 28 The choice of small-scale credit as a genealogical theme – banking as a liberal strategy to govern the poor ................................................ 29 Governmentality as a theory of governing ............................................... 30 Governmentality in colonial and post-colonial contexts ..................... 31 The post-colonial theoretical idea ..................................................... 32 Governmentality in colonial and post-colonial Malawi ...................... 34 The design of the study and research questions ........................................ 34 The problematics of government ......................................................... 35 The analytical aspect of problematics of government .................... 35 Political rationality and agency ........................................................... 36 The analytical aspect of political rationality .................................. 37 Governmentality technology and subjectivity positions ..................... 37 The analytical aspect of governmentality technology .................... 38 Effects of history ....................................................................................... 40 CHAPTER 2. Methodology and sources ...................................................... 41 Identification of the study object .............................................................. 41 Fieldwork ................................................................................................. 43 Sources ..................................................................................................... 43 Fieldwork and its problems ...................................................................... 45 The colonial and anthropological archive and its problems ...........................46 Outline of the study .................................................................................. 50 CHAPTER 3. Thrift and Loan Cooperatives at the turning point to the development era ............................................................................................ 52 The conditions for colonial governmentality in 1930s ........................... 52 The empire ........................................................................................... 52 Colonial Africa .................................................................................... 53 Indirect rule in colonial Africa ....................................................... 53 Savings banks and credit cooperatives in colonial welfare policy .... 55 The British colonial government in Nyasaland ........................................ 56 Indirect rule in Nyasaland ............................................................. 57 The problematics of government and Thrift and Loan Cooperatives as a solution ............................................................................................. 57 The set-up of model thrift cooperatives ............................................... 61 The desired individuality – progressive Africans ............................... 62 Analysis of the problematics of government – insecurity, indebted- ness and declining soil fertility ............................................................ 62 Thrift and Loan Cooperatives in the political rationality of indirect rule ......................................................................................................... 63 The members’ responsibility for self-help .......................................... 64 The hesitation to introduce an ordinance ............................................. 65 Thrift and Loan Cooperatives – closing down ................................... 65 Analysis of cooperatives as economic and political activities ........... 67 Thrift and Loan Cooperatives as governmentality technology ................. 67 “We have never been taught how to use and look after money” ......... 68 Who were the members? ..................................................................... 70 Analysis of Thrift and Loan Cooperatives working as governmen- tality technology .................................................................................. 71 Concluding discussion .............................................................................. 72 The problematics of government ........................................................ 72 Political rationality of indirect rule ...................................................... 73 CHAPTER 4. Development Loans and loans to master farmers in the heyday of development .................................................................................. 75 The conditions for colonial governmentality in 1940s and 1950s ............ 75 The empire .......................................................................................... 76 Colonial Africa .................................................................................... 76 Nyasaland ............................................................................................ 77 The problematics of government and the solution of Development Loans and loans to master farmers