Towards developmental democracy

Abstract

"Some two decades of neo-liberal ascendancy in socio-economic policy making and management have taken their toll on the development process around the world generally and in developing countries especially. Coming into the developing countries under the rubric of International Monetary Fund (IMF) and World Bank structural adjustment programmes, the neo-liberal policies that were promoted encompassed virtually all aspects of economic and social life, with the attendant consequences, including political ones, that have been widely observed in the literature. Whether it be with regard to the exchange rate, prices, interest rates, subsidies, the entire trade and industrial policy regime, the budgetary framework and public expenditures, investment policy, taxation and revenue mobilisation, infrastructure development, or in such areas as social policy (encompassing health and education), labour market policy, and the management of public enterprises, the accent over the last two decades has been placed emphatically on the promotion of a market-driven system side by side with the retrenchment of the state and curtailment of state intervention. The policies that were at the heart of the structural adjustment programmes were presented as the core of a new "consensus" on the management of the economy to which no (viable) alternative exists; in fact, they were more reflective of the hegemonic influence exercised by the key Western regimes and the multilateral financial/economic institutions which they control. These governments and institutions served as the springboard for the spread of neo-liberal policies around the world, using an array of conditionality and cross-conditionality clauses to compel developing countries to embrace their preferred options for the reform of ailing national economies. Yet, as has been acknowledged even by the World Bank, structural adjustment has generally failed to achieve the results which its authors promised it would deliver. (It bears pointing out though that even with the repeated acknowledgement by the Bank about the shortcomings of its policy prescriptions, orthodox structural adjustment measures continue to be administered on developing countries as the panacea to their economic difficulties)."(pg 2)