The war of national liberation and its aftermath severely disrupted Algeria's society and economy. In addition to the physical destruction, the exodus of the colons deprived the country of most of its managers, civil servants, engineers, teachers, physicians, and skilled workers--all occupations from which the Muslim population had been excluded or discouraged from pursuing by colonial policy. The homeless and displaced numbered in the hundreds of thousands, many suffering from illness, and some 70 percent of the work force was unemployed. Distribution of goods was at a standstill. Departing colons destroyed or carried off public records and utility plans, leaving public services in a shambles.

The months immediately following independence had witnessed the pell-mell rush of Algerians, their government, and its officials to claim the lands, houses, businesses, automobiles, bank accounts, and jobs left behind by the Europeans. By the 1963 March Decrees, Ben Bella declared that all agricultural, industrial, and commercial properties previously operated and occupied by Europeans were vacant, thereby legalizing their confiscation by the state. The term nationalization was not used in the decrees, presumably to avoid indemnity claims.

The FLN called its policy of widespread state involvement in the economy "Algerian socialism." Public-sector enterprises were gradually organized into state corporations that participated in virtually every aspect of the country's economic life. Although their activities were coordinated by central authorities, each state corporation was supposed to retain a measure of autonomy within its own sphere.

The departure of European owners and managers from factories and agricultural estates gave rise to a spontaneous, grass-roots phenomenon, later termed autogestion, which saw workers take control of the enterprises to keep them operating. Seeking to capitalize on the popularity of the self-management movement, Ben Bella formalized autogestion in the March Decrees. As the process evolved, workers in state-owned farms and enterprises and in agricultural cooperatives elected boards of managers that directed production activities, financing, and marketing in conjunction with state-appointed directors. The system proved to be a failure, however. The crucial agricultural sector suffered particularly under self-management, partly as result of bureaucratic incompetence, graft, and theft.

Data as of December 1993