The findings suggest a need for a more nuanced view of what the neoliberal agenda is likely to be able to achieve.
Samriddhi Foundation will be conducting Liberty Discussion Series on August 26, 2016 at Gaia Restaurant and Coffee Shop, Thamel at 5:30 – 7:00 pm. The discussion is on ‘Neoliberalism: Oversold?‘ by Jonathan D. Ostry, Prakash Loungani, and Davide Furceri from International Monetary Fund.
There is much to cheer in the neoliberal agenda. The expansion of global trade has rescued millions from abject poverty. Foreign direct investment has often been a way to transfer technology and know-how to developing economies. Privatization of state-owned enterprises has in many instances led to more efficient provision of services and lowered the fiscal burden on governments.
However, there are aspects of the neoliberal agenda that have not delivered as expected. Our assessment of the agenda is confined to the effects of two policies: removing restrictions on the movement of capital across a country’s borders (so-called capital account liberalization); and fiscal consolidation, sometimes called “austerity,” which is shorthand for policies to reduce fiscal deficits and debt levels. An assessment of these specific policies (rather than the broad neoliberal agenda) reaches three disquieting conclusions:
•The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.
•The costs in terms of increased inequality are prominent. Such costs epitomize the trade-off between the growth and equity effects of some aspects of the neoliberal agenda.
•Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects.
As always, how we roll during the discussion is the same. It is a pre-requisite to read the articles to sit in the discussion. We will begin by hearing from everyone what is his/her favorite line/idea in the whole article. So please highlight your favorite lines as you go through the article.Then we will move on to talk about things you did not like/do not agree with and raise the points you would like to discuss.
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We look forward to a lively discussion as always.