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The Neo-Liberal Doctrine and the African Crisis (Draft)
The core model of Structural Adjustment Programmes (SAPs) undoubtedly reflects a revival of neo-liberal orthodoxy in mainstream economics as well as in popular global economic policy debates in the 1980s. In this sense, SAPs are an application of the neo-conservatism of the Thatcher-Reagan era to development economics- a product of the neo-liberal ’counter-revolution’. The legitimacy of ’development economics’ as a distinct subject discipline was seriously challenged in the process.
The ascendancy of the neo-liberal school in development economics has not only impoverished the development policy debate with its monolithic understanding of the essentially multi-dimensional process of socio-economic development, but also inflicted irrecoverable costs and pains to low-income countries by imposing its doctrine in the form of conditionality to Structural Adjustment Loans. While its supremacy as applied to developed and emerging market economies has been gradually questioned after a series of global financial crises in the 1990s, its application to low income developing countries has been surviving as the core component of loan conditionality.
Drawing on my recent papers on the topic noted in the bibliography attached, this brief paper examines the effects of application of neo-liberal policies on the continuing fragility faced by most low-income countries in Sub-Saharan Africa (SSA).
Indeed, since the early 1980s, the economic policy and development debate in SSA have been singularly dominated by SAPs. The debate concerning the appropriateness of SAPs for SSA countries continues to be unabated despite nearly two decades of ’adjustments’. The accumulated evidence generally points to the weak link between adjustment and performance in Africa (UNCTAD, 1998). After 15-20 years of reform efforts, the region’s growth performance remains far too low to lead the economies along a path of economic development, which would counter growing levels of poverty. The incidence of poverty is estimated to be in the range of 40 to 66 percent. In short, much of Africa today is still mired in ’a crisis in development’, i.e., an economy seized by the general incapacity to generate a sustained improvement in the standard of living.
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