Development Administration, Neoliberalism, Populism - Essay Example

Running Head: Development Administration Neoliberalism: Neoliberalism is a market oriented approach to the economic and social policies. It is based upon the neo-classical theories of economies. These theories work to maximize the part played by the private business sector in deciding what are the political and economic priorities that govern the state. Pre dominantly, neo liberalism denotes a form of political-economic philosophy that rejects government intervention in the local economy. It promotes the idea of free market methods, where there is lesser restriction on the way business is conducted and on property rights. In foreign policy, Neoliberalism is a proponent of the opening of foreign markets via political means, through diplomatic means, economic pressure and if needed be, then military might as well. In this context, opening of markets implies free trade and international division of labor. Neoliberalists mostly favor multilateral political pressure through various international organizations and treaty devices such as the WTO, the World Bank and the African Development bank. It promotes reducing the role of national governments to negligible. It encourages privatization over direct government involvement and evaluates success in the overall economic gain. To build on efficiency and increase employment, it works to reject and alleviate labor policies such as minimum wage and overall bargaining rights. It is a vehement opponent of socialism, protectionism, fair trade and according to some critics it is a major obstacle to democratic rule. Similarly these critics argue that labor rights and social justice should be prioritized over international relations and economics. In the United States neo-liberalism has been linked with positions that support free trade and welfare reform. It does not oppose Keynesianism and environmentalism in these areas. In the American context, for instance Brad DeLong is a very avid defender of Neoliberalism, despite being a Keynesian, someone who has constantly supported income redistribution and also a fierce critic of the Bush Administration. It is also colinked with the Third Way aka social democracy under the New Public Management movement. Those supporting the US Version of Neo-liberalism put it forward as a pragmatic position that focuses on what works and what doesn’t work. The concept emerged during the 1980s as an alternative to the famous interventionist approach of the Democratic Party and the anti-government Pro Business approach of the Republican Party. Charlie Peters, Robert Reich, Lester Thuron, Gary Hart, Paul Tsongas and Bill Bradley. Thus the overlapping of these forms of usages can give rise to considerable confusion. On the international front, Ronald Reagan and the United States Republican Party are considered as one of the most leading and prominent figures in neo liberalism. (Hulme) In cultural studies, the word Neoliberalism has had a wider appeal. It is used to explain an internationally prevalent ideological notion that paves way towards social, cultural, political practices, policies which are incorporated in the language of markets, efficiency, and consumer choice. During the 1970s, some Latin Americans used the term neo liberalism to attribute their program of reforms central to market. By the time it was 1990s, the word Neoliberalism had been subjected to major criticism by various liberal critics. They considered it as a catchphrase, which was coined by various academic radicals to denigrate the ideas of the likes of Milton Friedmon and Friedrich Von Hayek.Neo-liberalism found grounds first in Chile and later on spread to Great Britain during the tenure of Maragaret Thatcher and then the United States during the tenure of Ronald Reagan. (Haq) Categorically speaking, Neoliberalism aims to transfer the control of economy from the public sector to the private sector. It believes that this will give rise to a more efficient prosperous nation and boost the economy of the nation on the whole. Williamson put forth a list of ten points that chalked down the concrete policies often spoken by the advocates of neo-liberalism. According to Williamson, Fiscal policy governments should not look for large deficits that will have to be eventually paid back to future citizens. These kinds of deficits should only produce a short term effect on the employment status of the economy. If the deficits continue to grow and are constant then higher inflation will result and productivity will dip. Deficits should only be incorporated to stabilize things. Redirection of public spending is wasteful towards the long term growth of the country, and of services like primary education, primary health and the infrastructure investment. Neoliberals also advocate for tax-reforms. They believe that the tax base should be broadened and marginal tax be adopted to give rise to innovation and efficiency. Interest rates should be market determined and positive but in real terms. The exchange rates should be floating. (J.A) Neoliberals also support trade liberalization. This means that in their book of expertise, imports should be liberalized, trade to be protected by law. Each of these measures will be give rise to competition and make growth more sustainable in the long run. Trade Liberalization has been in affect supported by many economists. There has been varying opinion regarding the same and in many cases most economist theories believe that lesser degree of trade restrictions would in affect lead to greater economic growth. They suggest and imply that trade policies are not protective in the social sense. On the contrary they are burdensome. Their biggest impact is on their ability to nullify the competitive nature of trade. They fail to induce any kind of simulative effects in the process. These policies are more related to the consumption of domestic resources rather than their generation or improving upon over all productivity. To use and cash in on trade for development, liberalization is very important. More reforms are needed. In essence what many people call it as a positive agenda for trade policy? This means working and building upon “ a private sector dynamic, enterprise and human resource development, legal, transportation and communications infrastructure, as well as an openness to international trade and development.”However, there are a lot counter arguments to the above theories. One of the biggest problems with these theories is the fact that theory lies on assumption and there is perfect competition between different countries. It also assumes that there are relatively stable and constant returns to the scale of production. Irrespective, it seems hard to apply theory to the real world especially where developing countries like those in Latin America are concerned. It is believed that Trade liberalization can give rise to adjustment cost with magnanimous affects on output. Trade liberalization can impose heavy adjustment costs with equal devastating effects on output, large trade deficits and even give rise to high unemployment provided that predictions don’t fall straight. Older and obsolete theories related to trade restriction focus on the direct impact of the overall profitability various activities. Newer theories on the other hand stress more on the dynamic impact of trade liberalization in curving down the rent-seeking and in advancing the technical knowledge from the international market through access to new capital and manufactured goods. (Dreze) Liberalization of the capital account is also advocated by neo liberals. In this system, people are given the opportunity to invest in funds overseas and the same foreign funds are later allowed to be invested in the home country. Privatization of state rise is another area where neo liberalism cashes up. In this those goods and services, which the government is unable to provide for as regularly and as efficiently are handed over to the private sector for promotions. Neoliberalism supports deregulation. There is more empowerment and those regulations that obstruct market entry and competition need to be abolished. However exceptions in safety, environmental and consumer protection grounds will be tolerated. This also prompts for legal security of property rights and complete financialization of capital (J) Populism: Populism is defined in various ways. It is defined either as an ideology- a political philosophy or as a type of discourse. More often, it is considered to be a political and social thought that brings the common man against the elite. It pleas for social and political system changes. Cambridge dictionary defines it as political ideas and activities that are intended to represent an ordinary man’s needs and aspirations. Academic and scholarly definitions of populism vary immensely. It is often employed in various loose, inconsistent and undefined ways. Margaret Canova demarcates populism from other institutions in terms such as “conservative” or “socialist”, the meanings of which been time and again explained by their adherents. Contemporary populists barely ever call themselves as populists and normally denounce the term when it is applied on them through others. Some exceptions to this rule of thumb exists especially in the United States. Though there are difference due to the memories and traditions that have led on since the earlier democratic times. For instance there is the New Deal reform movements, the civil rights movement and then the farmers’ movements. They were considered as populists by many supporters and outsiders. It is also possible due to the linguistic co-relation of the word populism with the word popular. (Chambers) Due to the amount of attention given to this term in the academic world, many scholars have made considerable progress in describing the word in ways which can be lucrative for research and help distinguish between movements which are literally populists and those that simply borrow populist ideas. According to Danielle Alberazzi and Duncan Mc Donnel in their volume of Twenty-First Century populism, it is defined as "an ideology which pits a virtuous and homogeneous people against a set of elites and dangerous ‘others’ who are together depicted as depriving (or attempting to deprive) the sovereign people of their rights, values, prosperity, identity and voice". Instead of considering populism as something which is loosely based on social bases, economic programs, issues and the discussions of the right wing, populism has given itself to the tradition of its various noted scholar all of whom have sought to focus on populism perse instead of considering it as an appendage of an ideology like nationalism or neo liberalism. (Bryant) Democracy intends to reflect the pure and undiluted will of the people. Populism reflecting the same can be easily related with ideologies of both the right as well as the left. While leaders of populist movements in recent times have claimed to be either on the right or on the left side of the political spectrum, most populists claim to belong to neither of the three, left wing, centrist and the right wing. Some scholars argue that populist form of economy represents the comeback of the medieval Aristotelian politics. This kind of politics seeks equality for the sake of problem solving. Populism has taken three form left wing, right wing as well as centrist. All these three forms of politics bring together various groups and individuals of diverse partisan views. Most politicians have strongly advocated for populism. They see it as a huge democratic and positive force imbibed in the society. A wing of scholarship in political science is of the view that populist mass movements tend to be irrational, impulsive and give rise to instability in the political process. According to Margaret Canova both views are fallible and fall under the two main branches of modern populism. They are agrarian and political. Critics have often considered populism a dismissive, demeaning and derogatory term for responding to voters in a pure democracy. It‘s rather the way politicians use this word that makes it dismissive and demeaning. For instance, consider, Sarah Palin’s mythology that simplicity are virtue are the two biggest blessings of rural living and wage work. Both the allegation are slanderous and assumptions too fake and too tempting. Populism mostly calls for the government to intervene in favor of one class while disregarding the rights of the other class. The populist movement in America began when their currency was inflated. This was to assist the debtor but it was done at the expense. Thus one class was supported while the rights of the other were undermined. Today populism means the income and wages of certain producers is protected from those of their neighbors. This will put their rights on the edge while the producers enjoy the perks of protectionist laws. Even in campaign promotions, the use of populist rhetoric is not too beneficial. For instance Obama’s ads that claimed John McCain supported transferring American Jobs overseas. Bottom line is whoever goes on to become the president of America, workers are most likely to lose their share of trade and bankruptcy and any jobs which can be done more productively and coherently anywhere else in the world. Similarly American homeowners, will almost entirely loose all homes for which they can’t pay. Government at best can only create the conditions and circumstances for general prosperity. (Allen) Critics of populism have argued for a very long time that mobilization and participation through massive rallies do not generally fall true to the concept of autonomy. Gino Germani for instance was of the view that autonomous collective action and populist heteronymous collective actions were distinct and couldn’t be compared. Most other critics are of the view that populist redemption is largely based on the authoritarian approach of people’s will. (Huque) Neo-liberalism – a better option: Of the two models, neo-liberalism would be a better model for poverty alleviation and accelerated development in politically ravaged economies. Neoliberalism is more than just a means of ending the era of big governance. It is an economic doctrine that channels state resources towards empowerment of projects, economic de-regulation, tariff reduction, trade liberalization and privatization of businesses. Neo liberalism revolves around free trade. In this way, eventually everyone benefits from an unfettered market. No one’s at a loss. It ensures that everyone does what they are meant for and they are getting what they deserve. According to Lebowitz: “The unfettered market, we are told, ensures that everyone benefits from a free exchange (or it would not occur) and that those trades chosen by rational individuals (from all possible exchanges) will produce the best possible outcomes. Accordingly, it follows that interference with the perfect market by the state must produce disaster—a negative-sum result in which the losses exceed the gains. So, the answer for all right-thinking people must be, remove those interferences. “ (Turner) In a free market, there are no losers. Everyone emerges as a winner eventually. The market however needs to be liberated from all types of constraints. It must be unleashed completely to cash in on its full potential. However, this by no means that state has a role to play or it doesn’t exist. It does exist and its main role is to ensure that markets are business friendly, and workers and police are given the means to maintain the necessary infrastructure. Since the 1980s, almost all US presidents have elaborated on the concept of free trade and its importance to world economies. Works Cited Allen, T. and A. Thomas. Poverty and Development in the 21st Century, . Oxford: Oxford University Press, 2000. Bryant, C. and L.G. White. Managing Development in the Third World. WestView Press, 2003. Chambers. R. Rural Development: Putting the Last First, Longman Scientific & Technical,. 1983. Dreze, J. and A. Sen. Hunger and Public Action,. Clarenden Press, 1989. Haq. Reflections on Human Development,. Oxford University Press, 1995. Hulme, D. and M. Turner. Sociology and Development. London: Wheatshef Harvester, 1990. Huque, A.S. and H. Zafarullah. International Development Governance. 2006. J, Clark. Democratising Development: The Role of Voluntary Organisations,. Earthscan, 1995. J.A, Eliott. An Introduction to Sustainable Development. Routledge, 2000. Turner, M. and D. Hulme. Governance, Administration and Development, . Macmillan, 2003. Read More