Markets, Poverty Alleviation, and Income Distribution: An Assessment of Neoliberal Claims [Abstract]

Ethics & International Affairs, Volume 5 (1991)

If individuals are such rational and maximizing agents, why has history demonstrated that government intervention in economics plays a consistently positive role in a developing country's economic performance? This article emphasizes the inevitable link of the political arena with progress of economic success, primarily in the developing world, thereby rejecting the neoclassical view of pure market-driven economics. The author highlights the market-oriented accomplishments of the Asian NICs (Newly Industrialized Countries) and some Latin American countries, such as Argentina, Brazil, Chile, Uruguay, and Turkey, pointing out time periods when authoritarian regimes acted as indisputable impetus for economic growth spurts in these countries. Because the poor are afflicted most heavily during transition periods, the author advocates that governments ensure the involvement of the poor not only in the market reforms but most importantly in the policy-making process. Governments must ensure proper allocation of national resources, income distribution, and commitment to poverty alleviation through direct intervention in the economy to stimulate growth and success. Under these circumstances, Haggard concludes, the poor will demonstrate a higher level of success in the emerging economies than many expect.

 

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