Theories of Development - Term Paper Example

In this paper, I will argue that neo liberalism supports growth and promotes efficiency. This paper will include arguments regarding how neo liberalism has a positive effect on economic development. The paper will begin with introduction of neo liberalism. After that arguments in favor of neo liberalism will be discussed. In the end arguments against neo liberalism will be discussed and refuted. Neo Liberalism became popular in the later periods of 20th century. This school of thought became famous at a time when Keynesianism was declining in popularity.

Also the notion of free market and private enterprise became the reason of popularity of neo liberalism all over the world. The growth of private enterprises, alongside with growth of capitalism paved the way for the acceptance of neo liberalism. This particular school of thought was in line with the overall spirit of capitalism and denied governmental intervention in the market. The deregulation that neo liberalism advocated also had cultural affects and therefore this school of thought became famous among economists all over the world.

Neo liberalism questioned the utility of government intervention in the economy and therefore advocated free markets and free enterprises. Government intervention assumes that government knows everything about the market and is able to make the best possible decision. This assumption was questioned by neo liberalist economists. They argued that the role of government is not in the best interests of the economy and therefore government should let the markets decide about their course of action.

Also on the issue of employment determination, neo liberalist argued that market forces were in a better position to make efficient decisions than government. This is how neo liberalism discourages the role of government in a particular economy. Neo liberal economic theory was attractive for the world because of the freedom it offered to both individuals and