Economic Growth And Its Impact On The Economy

Decent Essays

In the last two decades of the twentieth century, and in a few countries a bit earlier, a set of policy changes that were – and still are – considered to be positive reforms were introduced in the vast majority of low- and middle-income countries in the world. The results strongly indicate that these reforms on the whole were a failure. This is evidenced by the sharp decline in economic growth in the great majority of low- and middle-income countries, which coincided with and then followed these changes for two decades; and the concomitant decline in progress on social indicators such as infant and child mortality, and life expectancy. Perhaps because it is difficult to come up with an alternative to policy failure as an explanation for …show more content…

Unfortunately the failed experiment of neoliberalism is not merely of historical or academic interest, since it is ongoing. The prevailing orthodoxy in the economics profession, finance and economic ministries in low- and middle-income countries, and the global media from which many policy-makers draw their inspiration and fears, remains much the same as it was twenty or even thirty years ago. The IMF, the World Bank, and the WTO are still largely pursuing policies in the same direction, and although they have met increasing resistance and have lost considerable clout in middle-income countries, they are still the most powerful and influential institutions of global governance.
While it was the norm in developing countries in the 1960s and into the 1970s to have national industrial policies and development planning, these practices were sharply curtailed in many countries during the neoliberal reform period, and have only begun to return in the past decade. Yet this occurs at a time when economic planning has become vastly more important in order to manage a transition to sustainable environmental and energy policies in order to avert global climate disaster. While it may be partly attributable to some movement away from certain neoliberal policies, including the pro-cyclical macroeconomic policies that have often been enforced by the IMF, the rebound in economic growth in the first decade of the twenty-first century does not mark the end of the

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