The Neoliberal Counterrevolution & Structural Adjustment - Book Report/Review Example

The 1980s: The Neoliberal Counterrevolution & Structural AdjustmentGowan theory mainly explains the origin of neo-liberalism. According to him, neo-liberal approaches became dominant in the 1980’s and have since then been persistent in development theories. Best known as ‘counter-revolution’, the move has resulted in profound impacts on the development policies especially on international levels. This has come to pass through the implementation of programmes on structural adjustments.

According to Gowan, the neoliberalism essence was to try and deregulate markets to the greatest extend in order to achieve free trade. It is the growing disillusionment as well as the state’s potential to properly manage social and economic life that resulted in the strong belief in the market power to be an economic regulator. Gowan thinks that the minimal involvement of the state in the economy was what provided the best conditions for the growth and prosperity of the economy(Gowan 20). Canak theory was out to characterize neo-liberalization.

Canak argues that the development conditions before 1980’s were due to misguided government policies and less concentration on global market as opposed to the domestic market. The limited development according to the counter-revolution were caused by inefficiency and corruption in the overextended public sector and government apparatus, the inhabitation of the market by economic controls that had been distorted by the states proliferations and the social relations that were non-market preventing production commodification.

The neo-liberalization reacted to this situation by expanding and promoting free trade, privatizing enterprises that were owned by the state, allowing the free markets to ornament, and invited foreign investors. The role of the government was now limited to providing services and goods which the private sector could not (Canak 19). Taylor and Biersteker focused on the practical implication of the policies of neo-liberalization. According to them, it is the debt crisis in the early 1980’s that led to most of the neoliberal policies to be implemented and this was courtesy of the World Bank and the IMF.

Due to recession, banks were no longer in a position to lend money to the industrial countries thus settled onoffering their services to developing countries. The two theorists believed that it is this situation that led to increased interest rates to very high levels and the price of export commodities declining drastically. As a result, most of the countries decided to rethink about their loans policies in consultation with the IMF and the World Bank (Taylor 147). The response was the formation of the SAPs that were intended to maximize both the amounts and prospects of repayments by affected countries.

The structural adjustment programmes were meant to change the developing countries economies to become free markets thus reducing government interventions. The adjustments were majorly pushed by the World Bank and the IMF. These structural adjustments ensured that loans were granted and the balance of payments reduced through reducing imports and increasing exports(Biersteker 481). Elson came out strongly opposing these structural adjustment programmes. Despite the fact that most developing countries considered the structural adjustments as meant to ensure future welfare and economic growth, Elson viewed the adjustment as being the main cause of economic failure in these countries as well as poor performances in terms of economy.

The adjustments led to over dependence on IFIs by developing countries. The IFI’swere criticized for a superficial look into economic problems. This resulted to international market instability, global trading inequalities, economic and social structures weakening in developing countries. The countries on the South were the most affected by the negative effects of the structural adjustments programs raising major social costs concerns. The most highlighted negative effect of these adjustments is its impact on education and health especially in the way children and women fooled by there disproportionate burdens (Elson 58).

Works CitedBiersteker, Thomas. “Reducing the Role of the State in the Economy: SA Conceptual Exploration of IMF and World Bank Prescriptions.” International Studies Quarterly 34 (4) 1991:pp.477-492Canak, William. “Debt, Austerity, and Latin America in the New International Division of labor.” Lost Promises. New York: Westview Press, 1989. pp.9-29Elson, Diane. “Male Bias in Structural Adjustment.” In H. Afshar and C. Dennis Women and Adjustment Policies in the Third World. New York: St.

Martin’s Press: 46-68Gowan,Peter. The Global Gamble. London: Verso Press, 1999. Print Taylor, Lance. “The Revival of the Liberal Creed: the IMF and the World Bank is a Globalized Economy.” World Development 25 (25) 1997: 145-152