Theories of Development

Jack Gross
12/09/2019

Neoliberalism is a fairly popular theory of development that replaced Dependency theory as the most dominant world economic policy in the 1980s. In it it assumes that the free market is the best thing ever and that Government interference will mess things up in the long run. According to neoliberalism, competition in the markets will cause healthy competition allowing only companies that consumers like to survive and grow. In creating a "survival of the fittest" market they hope to lead to sustainable long-term development. It states that "Development should grow from Foreign Direct Investment, rather than government investment." (Murphy 52) Unfortunately, neoliberalism in reality isn't as good as it sounds. Neoliberalism was a large thing in Latin America in the early 90s and it caused tons of bad things. GDP stalled, poverty and income concentration rose severely along with unemployment and violence. As a result of all of that going on, many rulers were impeached and left and things started to calm down. However, recently as Latin America has been getting left behind by powerhouses such as the United States they have decided that the only way to avoid getting taken advantage of is to open themselves up to foreign direct investment and open their markets without adding any tariffs or getting any trade preference. As these decisions have been made things have gone slowly downhill and there is no sign of stopping if there isn't a change in policy. This fairly easily displays why Neoliberalism isn't really such a good path to follow.



“Chapter 3.1 Development.” Global Politics: Supporting Every Learner across the IB Continuum, by Robert Murphy and Charles Gleek, Pearson Education Limited, 2016, pp. 52–52.

 Lopes, Dawisson Belem. “Why Is Neoliberalism Back in Latin America?” Business & Economy | Al Jazeera, Al Jazeera, 15 July 2017, www.aljazeera.com/indepth/opinion/2017/07/neoliberalism-latin-america-170711085354385.html.

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