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Politics and Public Administration
POL 208
Abbas Gnamo

Neo-liberalism and SAPs • Neo- liberalism draws on the neo- classical economics of Adam smith and modernization theory of 1950s • It is anti Keynes and "development economics" • Overriding importance of free market and free trade • Failure of development due to state intervention • Strongly pro-capitalist ( foreign investment encouraged) • Encompassed in structural adjustment programs Neo-liberalism Classical liberalism "laissez faire capitalism" Adam smith Herbert spencer Late 18-19th century Basic tenets of neoliberalism • Deep faith in markets as the best allocators of resources in a society • Belief that government intervention in markets is almost always bad; markets work best when left to themselves. Non moarket considerations ( eg. Inequality, poverty, etc) should not intrude • Belief that in the long term, reliance on market forces will bring prosperity, liberty, democracy, and peace to whole of human kind • Globalism links these ideas to globalization Neo-liberalism • Adam smith • Modernization theory (1950s) --> opposed to development economics --> Keynesians economics --> same as welfare state --> 1947-1973 = golden age of capitalism --> 1973-1979 = oil crisis ( Yom Kippur --> 1979-1980 = Iran-Iraq war --> global economic crisis. ----> born in Chicago school of economics: neo liberalism • Thatcher (1979-1990) • Regan (1980-1988) • Joe Clark • Helmut kohl : chancellor of Germany. • Neo- liberal solutions for the global dead crisis. Happened first time in Mexico in 1981 **SAPS structure of adjustment program **SALS: structure of Policy prescriptions of the neo-liberal globalization project • Liberalization ( free markets) • Deregulation of markets and business • Removal of government controls on wages, prices etc. • Privatization of state enterprises and functions • A business- friendly investment climate • Elimination of tariff and other barriers to free trade. • "Individual responsibility" rather than provision of services by the state Neo-liberalism and SAPs • Neo-liberalism draws on the neo-classical economics of Adam Smith and modernization theory. Neo liberalism and the south •
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