Washington Rules Change, Again Jomo Kwame Sundaram

Over the last four decades, the Washington Consensus, promoting economic liberalization, globalization and privatization, reversed four decades of an earlier period of active state intervention to accelerate and stabilize more inclusive economic growth, associated with Franklin Delano Roosevelt and John Maynard Keynes. The Golden Age The US Wall Street Crash of 1929 led to the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: US President Roosevelt’s New Deal and the 1933 Glass-Steagal Act. While massive spending following American entry into the Second World War was clearly decisive in ending…

Can Africa and China Learn from Each Other? Lim Mah-Hui

The following is a speech made by Dr. Lim Mah-Hui on behalf of the South Centre at a Seminar on the 18th meeting of Afreximbank Advisory Group on Trade and Export Development in Africa, High-level Roundtable 1– Can Africa learn from China?, in Beijing on July 13. The seminar was held in conjunction with the 19th General Meeting of Shareholders of African Export-Import Bank. The South Centre is thus very pleased to be invited here to take part in a meeting on this important topic -- the relationship and cooperation between Africa and China. China is a huge country that…

Explaining Global Financial Imbalances: A critique of the saving glut and reserve currency hypotheses Thomas I. Palley

This paper examines three different explanations of the global financial imbalances. It begins with the neoliberal globalisation hypothesis that explains the imbalances as the product of the model of globalisation implemented over the past thirty years. It then examines the saving glut and reserve currency hypotheses. The paper concludes by arguing that both the saving glut and reserve currency hypotheses are inconsistent with the empirical record and both provide a misleading guide for policy. global_financial_imbalances (Download the full text in PDF format) (The paper was originally published as a working paper by the Macroeconomic Policy Institute (IMK).)

How Brazil can defend against Financialization Michael Hudson

In this article, it is argued that for developing countries, privatizing the public domain and financializing the economy is akin to military defeat. To defend themselves, the BRIC countries need to isolate themselves from global debt creation. And Brazil (as well as other developing countries), needs to promote the investment of its economic surplus for raising production and living standards, so as to create a positive feedback between higher wage levels and productivity, hence higher global competitiveness. Brazil (Download the full text in PDF format)

Industrial Restructuring and Innovation Policy in Central and Eastern Europe since 1990 Rainer Kattel, Erik S. Reinert and Margit Suurna

The Central and Eastern European (CEE) countries have often been portrayed as success stories of the Washington Consensus and the Europeanization that took place following the evolution of the European Union (EU).This study critiques the effect of both these factors on the CEE countries and posits that both led to deep-rooted cognitive dissonance between policies employed for industrial restructuring and innovation in CEE and actual developments taking place in the private sectors of these countries. industrial_restructuring (Download the full text in PDF format)

The Relevance of Ragnar Nurkse and Classical Development Economics Rainer kattel, Jan Kregel, Erik S, Reinert

The Authors aim to show how the classical development economics of Ragnar Nurkse’s (1907-1957) generation epitomized the best development practices of the past 500 years. Secondly, they argue that the alleged death of the classical development economics and subsequent rise of the Washington Consensus has to do not so much with increasing modeling in economics, but much more with misunderstanding the reasons for East Asia’s success and Latin America’s demise Thirdly, they aim to indicate key areas of further research that the current development mainstream should pursue in order to re-learn how to create middle-income economies and middle-class jobs. ragnar_nurkse…

Development and Social Goals: Balancing aid and development to prevent ‘welfare colonialism’ Erik S. Reinert

The Millennium Goals are far too much biased towards palliative economics rather than structural change, towards treating the symptoms of poverty rather than its causes.  An alternative perspective for cohesive development emerging from the historical and evolutionary approach recommends increasing diversification away from the diminishing returns sectors (traditional raw materials and agriculture) into an increasing returns sector (technology intensive manufacturing) and a  creating a large division of labour and the synergies and social structures which emerge from this structure. welfare_colonialism (Download the full text in PDF format)

Cultural Liberty in Today’s Diverse World: A Critique Ananya Mukherjee Reed

The Human Development Report (HDR) of 2004 United Nations Development Programme (UNDP) is entitled Cultural Liberty in Today's Diverse World [1]. It argues for active "multicultural policies that recognize differences, champion diversity and promote cultural freedoms, so that all people can choose to speak their language, practice their religion, and participate in shaping their culture-so that all people can choose to be who they are". The Report identifies two major forms of cultural exclusion: living mode exclusion and participation exclusion. Living mode exclusion occurs when the state or social custom denigrates or suppresses a group's culture, including its language, religion or…

Increasing Poverty in a Globalised World: Marshall plans and morgenthau plans as mechanisms of polarisation of world incomes Erik S. Reinert

The increasingly globalised economy seems to produce opposite effects of what standard economic theory predicts. Instead of a convergence of world income (towards factor-price equalisation), a group of rich nations show a tendency to converge, another convergence group of poor countries gathers at the bottom of the scale. This paper explains the mechanisms and the economic policies that create this type of gap in the living standard of workers in the non-tradable service sector. globalised_world (Download the full text in PDF format)

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