Bradford deLong has recently argued that neoliberalism provides a way for former colonies to close the gaps with their erstwhile colonial masters. But this argument ignores the fact that several economic policies of colonial times were explicitly laissez-faire in nature.
The recognition of the dangers of allowing finance a free hand in the economy has led to a rethink of the soundness of neoliberalism as an economic and policy doctrine, from no less an organisation such as the IMF. Dani Rodrik has attacked the theoretical foundations of neoliberalism itself, judging that its insistence on allowing for unhindered market activity is bad economics itself, for economic models that make a theoretical case for markets cannot be easily transplanted into the real world in the way that advocates of neoliberalism believe.
Yet this is not to say that the concept is dead and buried. As Harvey (2007) points out, neoliberalism is a political economic process that ostensibly seeks to organise society and economies around the principle of free market activity, while primarily attempting to shift the balance of power towards dominant economic classes that control capital. Seen in this light, neoliberalism is still a powerful force shaping political and economic changes in much of the world today.
Bradford deLong’s blog post, first published in 1998 and re-published now shows that the term “neoliberalism” still carries intellectual currency. His is a curious argument; neoliberalism provides the only suitable path for countries of the developing world to close the gap with their former colonial powers. Access to the latest goods and technology allows developing economies – with low levels of productivity – to boost productivity and output growth, and consequently incomes. The reason the State should stay away from the economic sphere in the developing world is because democratic institutions have not been established yet, and hence the political sphere is vulnerable to capture by elites.Read More »
While many of you may want to forget about 2018, we promise there are some good things that happened that you might want to remember. Here are the top 10 most read posts of the year. Happy new year and enjoy!
- An Alternative Economics Summer Reading List (by Carolina Alves, Besiana Balla, Devika Dutt and Ingrid H. Kvangraven)
- Not just r > g but r + q >> g: Piketty meets Ricardo in the long run of Indian history (by Rishabh Kumar, California State University, San Bernardino)
- Historicising the Aid Debate: South Korea as a Successful Aid Recipient (by Farwa Sial, School of Oriental and African Studies)
- Consuming development: Capitalism, economic growth and everyday life (by Arve Hansen, University of Oslo)
- The World Bank Pushes Shadow Banking in the Name of Development (Daniela Gabor, University of the West of England, Bristol, and others).
- Keynes or New-Keynesian: Why Not Teach Both? (by Rohit Azad, Jawaharlal Nehru University)
- Think Positive, Climb out of Poverty? It’s Just Not So Easy! (by Svenja Flechtner, University of Siegen
- Revisiting Hirschman’s Tunnel Effect and Its Relevance for China (by Wannaphong Durongkaveroj, Australian National University)
- Why I refuse to rethink development – again (and again, and again…) (by Julia Schöneberg, University of Kassel)
- Marx’s Birthday and the Dismal Science (by Carolina Alves, University of Cambridge, and Ingrid Harvold Kvangraven, University of York)
Want to be a contributor to this blog too next year? Shoot an e-mail to Ingrid Harvold Kvangraven and she’ll guide you through the submission process.
Walt Rostow (1959) infamously put forth a five-stage theory of economic development, extrapolating from the experiences of the great industrialized nations. However, as dependency theories strongly pointed out, the conditions under which those countries industrialized is significantly different from those that prevailed after decolonization. In addition to this, democratic capitalism experiences turbulence, which I argue makes development under this global system a struggle against powers and against what I call “Burawoyan Cycles”.Read More »
by Ramiro Eugenio Álvarez (University of Siena) and Santiago José Gahn (Roma Tre University)
What drives economic development? What is the nature of the external constraints that developing economies face? What is the role of industrial policy and the central banks in the development process? These were the core questions that were posed in the recent webinar series on Development in the 21st Century, organized by the Economic Development working group of the Young Scholars Initiative (YSI). These four meetings were particularly oriented towards examining notions such as distribution, patterns of specialization, industrial policies and balance of payment constraints. The discussion of such phenomena is especially important in a context of deep academic divides regarding the drivers of economic development.
Following the tradition of the Latin American structuralist school, the meetings placed special emphasis on the inherent challenges of conditions associated with being in the periphery when the problem of development is faced. During the meetings, processes of economic integration that perpetuate asymmetric economic relations of the center-periphery type were examined, as well as the role played by public institutions, e.g. central banks, in the development of industrial economies.Read More »
By Maria Pia Paganelli and Reinhard Schumacher
Is trade a promoter of peace? Adam Smith, one of the earliest defenders of trade, worries that commerce may instigate some perverse incentives, encouraging wars. The wealth that commerce generates decreases the relative cost of wars, increases the ability to finance wars through debts, which decreases their perceived cost, and increases the willingness of commercial interests to use wars to extend their markets, increasing the number and prolonging the length of wars. Smith, therefore, cannot assume that trade would yield a peaceful world. While defending and promoting trade, Smith warns us not to take peace for granted. We unpack Smith’s ideas and their relevance for contemporary times in our recent article in the Cambridge Journal of Economics.Read More »
Do stronger countries always get what they want in trade negotiations? My new book – Power in North-South Trade Negotiations – suggests not. In it, I ask how African, Caribbean and Pacific (ACP) countries were able to extract a series of concessions from the European Union in negotiations for free trade agreements over the last two decades. In doing so, I explore the underlying reasons why power relationships in trade politics are more complex than they appear at first glance. Read More »
‘The principal enemy is orthodoxy: to use the same recipe, administer the same therapy, to resolve the most various types of problems; never to admit complexity and try to reduce it as much as possible, while ignoring that things are always more complicated in reality.
Albert O. Hirschman (1998:110)
It’s clear from last week’s blog posts by Duncan Green that he is tired of academic critique against aid which have not been translated into concrete solutions (see here and here). However, the problem with his ‘marmite’ approach to addressing very complex problems is that it leads to reductive debates which are more symptomatic of the problem than constructive ways of finding solutions. Following Pablo Yanguas’ synthesis of research approaches I thought of taking a step back and analyzing the case of a successful aid recipient, South Korea. I do this in hope of moving away from the ‘literature’ – which Duncan finds overbearing – as well as getting away from the linearity of the contemporary monitoring and evaluation approach used by the aid sector. Read More »