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Globalization and the Limits of Neoliberal Development Doctrine

Globalization and the Limits of Neoliberal Development Doctrine

ThirdWorld Quarterly, Vol21, No 6, pp 1071 – 1080, 2000

Globalizationand the limits of neoliberaldevelopment doctrine RichardSandbrook

Developmentas Amartya NewYork: Al fredKnopf, 1999 pp 366,

Nobellaureate AmartyaSen off ers aneloquent exposition and defence of today’s dominantdevelopment thinking in Developmentas Freedom . Adept in philosophicalas well as economicanalysis andacclaimed forthe clarity ofhis prose,Sen is well qualiŽed to construct apersuasive conceptualand ethical groundingfor what I shall call ‘pragmatic ’. This -oriented approachis far removedfrom the crudereductionism oforthodox neoclassical analysis. Althoughmacroeconomic ref orms remain central, this newperspective adoptshuman well-being rather thanmere growthas its goaland broadens the developmentagenda to includepolitical, social andinstitutional reforms. Certainly, developmentis badlyin of a workableand humane guide to action.Although certain regionsand countries ofthe developingworld are achievinghigh to respectable growthrates, problemsabound: growing numbers ofpoor in SouthAsia andAfrica, deepening inequalities betweenand within countries,dangerous volatility as capital washes in andout of vulnerable emergingmarkets, widespreadecological decline,f aulty democratic transitions, andstate collapse andcivil ,especially in .To maintain one’s optimism in these parlouscircumstances is difŽcult, butSen manages this feat. His positive message is clear: peoplein developing countries woulddo well to adoptfree markets, strictly delimit the role ofthe , promoteliberal – demo- cratic institutions, ensurethe provisionof basic , and(i f possible) safety-nets, andwelcome open discussion ofissues. This routewill create the preconditionsfor a harmoniousand reasoned towards a more prosperous,just society. Althoughthis is aŽnestory,Sen’ s pragmatic brandof neoliberalism purveys afalse promise tothe poorand socially excluded.Sen portrays a worldof ‘reasonedsocial progress’(p 279) in whichcitizens, throughinformed and rational discussion in the contextof free speechand f ree markets, mayselect policies to promotea just andprosperous society. It is aworldin whichthe destructive side-effects ofactually existing markets disappear.This worldis one

RichardSandbrook is atthe Munk Center forInternational Studies, University ofToronto, 100 George Street, Toronto,Ontario M5S 1AI, Canada. E-mail: [email protected].

ISSN0143-6597 print; 1360-2241 online/ 00/061071-10 Ó 2000 ThirdWorld Quarterly DOI: 10.1080/01436590020012052 1071 FEATURE REVIEWS in whichmany of us wouldlike tolive. Unfortunately,though, the vast majority ofpoor and oppressed people do not, and will not,inhabit this idealized world. Toachieve development, deŽ ned by Sen as the expansionof freedom, they will usually haveto confront,not just dictatorial states benton dominating markets, butglobal and national powerstructures rootedin the market .The false promise ofSen’ s neoliberalism is tooffer a harmoniousroute to the expansion offreedom, merely byexpanding personal andhumanely adjusting individuals tothe exigencies ofglobal market .

II Sen’s pragmatic neoliberalism closely parallels today’s dominantdevelopment thinking,as epitomized bythe formulations ofthe WorldBank. But Senis afar moreeloquent advocate of market-based development than the committee-dom- inated international Žnancial institutions. Acritical reviewof his arguments, therefore,will suggest certain limitations ofcontemporary neoliberal thoughtin general. Senconstructs his theory’s normativefoundations by equating development with the expansionof freedom, and then deŽ ning this freedomto encompass not onlypolitical liberties, access to essential services andthe reductionof depriva- tions, butalso participation in market exchanges.As well, heposits amutually reinforcingrelationship amonghis variousfreedoms. His approach,in anutshell, is this:

Expansionof freedom is viewed … bothas the primary end and as the principal meansof development. Development consists of the removal of various types of unfreedomthat leave people with little choice and little opportunity of exercising theirreasoned agency … Theintrinsic importance of human freedom, in general, as thepreeminent object of development is strongly supplemented by theinstrumental effectivenessof of particular kinds to promotefreedoms of other kinds … For example,there is strong evidence that economic and political freedoms help to reinforceone another, rather than being hostile to one another … Similarly,social opportunitiesof education and health care, which may require public action, complementindividual opportunities of economic and political participation and alsohelp to foster our own initiatives in overcoming our respective deprivations. (p xii)

Senthus offers anintegrated andholistic modelof development, in which the variousfreedoms that combineto shapethe quality ofan individual’ s lifeare mutually reinforcing.Readers will Žndthis conceptof a virtuouscircle of development,in whichall goodthings progresstogether, highly attractive. As a pragmatic neoliberal,Sen, also advocatesa delimited butnot wholly passive role forthe state. Governments,he maintains, shouldprotect economic stability (preventingeven ‘ modest’in ation, p 138)and provide defence, policingand environmental protection. There ‘ may’also beanargument for the publicprovision of basic education,health care andsafety-nets. Senhedges his analysis, however;public provision of even these basic services mayhave to be subject to means-testing, andthe state shouldprovide them onlyif it commands 1072 THE LIMITSOF NEOLIBERAL DEVELOPMENT DOCTRINE

sufŽcient resources andif their provisiondoes not entrench undue dependency ongovernment. TheWorld Bank, by far the most inuential purveyorof andstrategy, has developeda verysimilar developmentmodel. This distanced itselfinthe 1990sfromits earlier austere andpure neoliberalism by embracinga morepragmatic, holistic approach.Under pressure to justify its very existence, the Bankhas progressivelybroadened its developmentdoctrine. 1 A major impetus was the disappointingperformance of ‘ structural adjustment’— programmesdesigned to checkin ation, balance budgets, deregulate markets, openeconomies and privatize state —especially in andAfrica. These failures spurredmainstream developmentagencies andaca- demics to innovatetheoretically, largely byabsorbing popular concepts and challenges into areinventedneoliberalism. Ofparticular signiŽcance among the challenges to the Bank’s position was UNICEF’stelling critique in 1987( Adjust- mentwith aHumanFace )andits extensionby the UnitedNations Development Programme (UNDP)in its annual HumanDevelopment Report , which Ž rst appearedin 1990.‘Sustainable humandevelopment’ , as propoundedby the UNDP andan array of non-governmental , rejects anexclusive focuson the growthof gross national productand a top-down,externally drivenstrategy fordeveloping countries. These organizations argue that ‘the ultimate test of developmentpractice is that it shouldimprove the natureof people’ s lives, and advocatethat it shouldbe founded on participation anda moreequal betweendonors and developing countries’ . 2 Inthe 1990sŽrst the WorldBank andlater the IMF andWorld Organization supplemented their neoclassical economicdoctrine with adeclaredcommitment topoverty reduction, gender equity,enhanced participation, pluralism, humanrights andpartnership. This morepragmatic approach,culminating inWorld Bank President James Wolfensohn’s ‘ComprehensiveDevelopment Framework’ , 3 is nowextravagantly toutedas anewparadigm for development. Yet the elements ofthis approach appearedas early as 1989. 4 This modelfeatures amarket-basedstrategy that is holistic, synergistic and complex.First, it encompasses political andsocial, in additionto conventionalmacroeconomic or market, goals. Next, these goals are complementaryand mutually reinforcing. And third, efŽ cient market systems are deemedto require the supportiveaction ofeffective national states. Theparallels to Sen’s formulations are striking. Theso-called ‘post-Washingtonconsensus’ reects these assumptions, althoughvast controversies swirl within the foldover the properpace, sequencing, and mix of reforms forany particular country, regionor period. 5 Notcoincidentally, this pragmatic neoliberalism has muchin commonwith the ThirdWay, which provides the ideological foundationsf orcertain powerful Western governments.Both doctrines developedas areaction to the limitations ofthe free-market ofthe Thatcherand Reagan era. The ‘ ’, as advocatedin particular byBritish Prime Minister TonyBlair andUS President ,urges a moreforcef ul role forthe state thanthat envisagedby old-style (NorthAmerican ). But this enhancedrole is limited to supply-sideactivities, especially honingthe capacity ofcitizens, Žrms andthe national economyas awholeto competewithin an 1073 FEATURE REVIEWS

inexorablyadvancing global .This priority directs governmental attention toimproving universal educationand technical training,as well as technologicalresearch anddevelopment. Additionally, the state assumes re- sponsibility forproviding minimally adequatesafety nets forthose individuals whocannot market themselves effectively. TheThird Way, however, does not advocatemajor redistributive reforms orregulative measures to promoteequality ofopportunity or condition. 6 Thatthe ThirdWay parallels the dominantstrategy fordeveloping countries is hardlysurprising inthe light ofthe combined inuence of the US,British andother Third-Wayist governments on the ,and the Bank’s inuence on development perspectives moregenerally. Developmentas Freedom ,therefore,lies at the forefrontof contemporary thinking.And Sen’ s bookis, indeed,an intimidating defenceof this thinking, with its 300pages of text whichsummarize his voluminousearlier writings, and with its 53pages of copious end notes whichlist hundredsof experts who supporthis analysis. But the worknonetheless illustrates the limits ofpragmatic neoliberalism as adevelopmentdoctrine. Threeof Sen’ s keyassumptions andarguments appear, on examination, to be implausible. Theseinclude his notionof market exchangeas anatural and intrinsically valuablepattern, his analysis ofthe challenges facingdemocracies, andhis vision of‘ reasonedsocial progress’. If myobjections havemerit, we must concludethat globalcapitalism is oftennot the benignprocess in poor, unequaland oppressed societies that Senand other neoliberals believe.

III Wemust Žrst questionthe liberal/neoliberal assumption that market exchangeis natural to society, formuch follows fromaccepting this starting point.Although free markets foster ,Sen contends, this effect is nottheir primary justiŽcation. Rather, ‘ theyare part ofthe wayhuman beings in society live and interact with eachother (unless stoppedby or Ž at). Thecontribution ofthe toeconomic growth is, ofcourse, important, but this comes onlyaf ter the direct signiŽcance of the freedomto exchangehas been acknowledged’(p. 6). To supportthis viewof , Sen resorts to antipodalcases. Hejuxtaposes a‘dictatorial’central planwith ‘free’choice in the market.‘ Evenif inboth the scenarios (involving,respectively, free choice andcompliance to dictatorial order),a personproduces the same in the same wayand ends up with the same incomeand buys the same ,she maystill havevery reason to prefer the scenario off ree choiceover that ofsubmission to order’(p 27). Or, again, Sen contrasts ‘bound’labour ( inthe USAis mentioned)to a ‘free’labour contrast (p113 ),in orderto argue the superiorvirtue ofmarket choice. 7 Is market exchangea natural feature ofall humansocieties? If Senand the liberals are right,this Žndingwill severely circumscribe the rangeof desirable developmentstrategies. Althoughthis knottyquestion obviously cannot be satisfactorily resolvedhere, the case forthe universality ofmarkets in human society is notso clearcut. Developmentas Freedom ignoresthe most trenchant critique ofliberal reasoning—that offeredby renowned economic historian Karl 1074 THE LIMITSOF NEOLIBERAL DEVELOPMENT DOCTRINE

Polanyiespecially inhis classic TheGreat Transformation:The Political and EconomicOrigins ofOur Time (1957).Polanyi contended that the liberal commit afundamentalerror in supposing that aparticular formof economicsystem— market exchange—is universal intime andplace. Markets in the formof places in whichpeople exchanged goods have existed throughout history,Polanyi noted. However, a market system,in whicheveryone satisŽ es his/hermaterial needsby treating land,labour and as commodities, is an inventionof the past three centuries. Polanyiengaged in detailed studies of ancient andnon-Western societies (Dahomeyin particular) toshow how the economywas integrated in society in othertimes andplaces. ‘Reciprocity’and ‘redistribution’, heshowed,were two alternative forms ofeconomic organization that operatedon a logic quite contraryto that ofmarket exchange. Polanyi’s analysis holdspowerful implications fordevelopment strategy. If markets are notnatural tohuman societies, weare freedto imagine alternative forms ofeconomic organization that mightbetter accordwith social priorities of , sustainability andsolidarity thanmarket systems. Wewould seek, in Polanyi’s terms, waysof ‘ re-embedding’the economyin society in orderto curb the destructive side-effects inherentin the commodiŽcation ofall things.In tracing the 19th-centuryroots ofthe ,the rise offascism and the SecondWorld War, TheGreat Transformation (pp. 3– 4)argued that:

Theidea of a self-adjustingmarket implied a starkutopia. Such an institution could notexist for anylength of time without annihilating the human and natural substanceof society; it would have physically destroyed man and transformed his surroundingsinto a wilderness.Inevitably, society took measures to protect itself, butwhatever measures it took impaired the self-regulation of the market, disor- ganisedindustrial life, and thus endangered society in yet another way. It was this dilemmawhich forced the development of the market system into a deŽnite groove andŽ nallydisrupted the social organization based upon it.

Althougha brief reviewcannot establish the validity ofthis arresting thesis, certain prominentneoliberals, in additionto radical critics, haverecently voiced their uneaseabout current global trends. Billionaire ŽnancierGeorge Soros, in his 1998book TheCrisis of GlobalCapitalism: OpenSociety Endangered , warnsthat unregulatedmarkets threaten toprovoke a popularbacklash owing to the insecurity andinequality theyfoster. Notedneoconservative Francis Fukuyamarefers to the currentera as ‘TheGreat Disruption’, onecharacterized bysocial disintegration, moral decline andsocial disorder.Why do these trends exist? Inpart, because ‘ the culture ofintensive , whichin the marketplace andlaboratory leads toinnovation and growth, spilled overinto the realm ofsocial norms,where it corrodedvirtually all forms ofauthority and weakenedthe bondsholding families, neighborhoods,and together’. 8 If disembeddedmarkets disrupt society andnature, this tendencywould legitimate protective curbson market forces.Sen, unfortunately, does not consider the possibility ofsuch harmful tendencies, thereby undercutting his advocacyof a neoliberal developmentdoctrine. Furthermore,Sen identiŽ es tendentiousdichotomies to supporthis case that participation inmarkets represents economicfreedom. Certainly, wewould 1075 FEATURE REVIEWS

choosemarket exchange(even if notquite ‘free’) overa dictatorial central plan, andwe would take ourchances in the labourmarket if the alternative were slavery.But is all planing‘ dictatorial’? Suppose,as in Denmarkor Norway, peoplef reely elect governmentsthat engagein afair degreeof planning. For sure,the Danesand Norwegians are noless free thanAmericans; indeed,with their far widerrange of excellent publicfacilities (free publichealth care and highereducation, for example), most Danesand Norwegians have experienced afar greater expansionof their freedomthan their counterpartsin the USA. Similarly, ‘free’labour markets are sometimes notall that free orattractive. In colonial Africa, forexample, the ‘natives’had to bedragooned into the labour market—Žrst as forcedlabour, and later throughthe imposition ofhut and poll andthe levyingof fees foressential services suchas education.Thus, Africans were,in a sense, forcedto be free.In many contemporary societies, we shouldalso recall, free choicein the market is asad jokefor people so poorthat theyhave nothing left to sell buttheir labour,their last plotof land, or their daughter.

IV If Sen’s notionof the natural primacyand benevolence of markets is problemat- ical, so is his conceptionof in a market society. Heargues that democracyis anelement ofthe goodlife, that it promotesresponsive govern- ment,that it doesnot hamper but rather mayfoster good policy; andthat it allows people,through f ree discussion, todeŽ ne their andpriorities. Muchof what he claims is uncontroversial.What is missing, however,is arecognitionof the severe limits placedon democracy by concen- trated economicpower within anincreasingly integrated globalmarket economy. Sensees market forces as aprincipal impetus toexpanding the realm of freedom,but he does not accept that theycan also beamajor hindrance.States, forhim, constitute the main threat to freedom.Hence, the informedand open discussion that Sencherishes requires a‘free’press, onefree fromgovernment controland censorship. The absence of ofŽ cial censorshipis, ofcourse, an important conditionof a free society. But Developmentas Freedom skirts the likelihoodthat highlyconcentrated private ownershipof the mass media will also shrinkserious debatewithin narrowboundaries. Such concentrated media ownershipis todaya invirtually all liberal – capitalist societies, developed anddeveloping. Inaddition, the bookignores the vast literature suggestingthat the increas- inglycredible threat oftransborder capital mobility dramatically shifts national powerbalances infavour of the ownersof Ž nancial,equity, and human capital. This growingglobal mobility andits corollary—mergers whichproduce ever- larger transnational cartels—spell troublefor both democracy and equality, especially whenthese trends combinewith the worldwidedecline in the countervailingpower of organized labour. Governments that donot adhere to conservativemonetary, Ž scal, labourand even social policies succumbto capital ight andthe orthodoxstrictures ofthe IMF.Thatgovernments are more responsiveto Žnancial markets thanto the needsof their poorercitizens should 1076 THE LIMITSOF NEOLIBERAL DEVELOPMENT DOCTRINE concernone who equates developmentwith freedom.This concernshould lead him to acknowledgeand indeed stress that development,therefore, requires restrictions onglobalmarket forces.Sen, however, neither identiŽes that shift in powerbalances norcontemplates anyregulatory moves to restore democracyby rectifying this imbalance.In his idealized worldthe persistence ofpoverty and inequality indemocracies simply demands‘ deeperanalysis andmore effective use ofcommunication and political participation’(p 154). This blindspot leads Sento ignorethe dilemma that democrats face in seeking powerwithin developingcountries today.Sen that market freedomand political freedomare mutually supportive.Free andrational debate,however, will notalways persuadecitizens that austere macroeconomicpolicies are best. Inpractice, voters inLatin America andAf rica havefrequently opted for populist leaders andparties whopromise relief frommaterial misery through redistribution andregulations that contradict market ‘freedom’— in , Peruand Zimbabwe, for instance. Governmentselected onsuch platforms must thendecide whether to honourtheir campaignpromises oradhere to the orthodoxmarket policies pressed bytheir external creditors andinternational Žnancial institutions. Theyhave usually optedfor the latter, whichhas created aso-called ‘democratic deŽcit’ and a delegitimization ofdemocratic processes. Developmentas Freedom ,dedicatedas it is to fostering botheconomic and ,should have addressed this difŽcult dilemma.

V Sen’s elliptical treatment ofdemocracy provokes scepticism overhis related advocacyof ‘ reasonedsocial progress’. Acombinationof a free-market econ- omywith social pluralism andliberal – democratic institutions forges,according to Sen,the preconditionsfor the progressiveattainment ofa just society (see ch 11).If citizens are at to engagein reasoneddebates overpolicy, they have the tools to builda moreacceptable social order(p 261). This visionis Sen’s ultimate justiŽcation fordevelopment as freedom.It is, however,an overly sanguineview, as it rests onimplausible assumptions andit is abstracted from powerrelations. Senengages several objections to his rationalistic perspective,but I will address onlythe most potentially damaging.He is vulnerableto the chargethat peoplein a market system are inherentlyselŽ sh, and will thereforeadvance only their ownself- throughpublic debate and governmental action. The privilegedand powerful will wield their inuence to entrench their privilege,not to achievejustice onthe part ofthe poorand socially excluded.Sen mounts three lines ofattack onthis objection,though none is convincing. First, hecontends that neoclassical rational-choice theorydoes not imply that individuals in amarket economypursue only their material gain.Rather, it is legitimate, heclaims, to deŽne self-interest orwell-being more broadly, to includeeven ideological commitments. Thus,individuals mayrationally choose to advancesocial justice, evenat apersonalcost. But hereSen tries to save the ethical basis ofhis rationalistic perspective at the expenseof rendering his neoclassical theorytautological. This theory’s keybehavioural assumption is that 1077 FEATURE REVIEWS

individuals act rationally, in the sense that theymake choices designedto maximize personalgain in anenvironment of material . Instead,Sen’ s revision leaves us with the vacuousnotion that individuals act rationally to advancetheir self-interest, andthat self-interest is whateverthe individuals decideto pursue.This formulationblunts irretrievably the explanatorypower of . Second,Sen unconvincingly contends that developedmarket economiesf oster whathe calls the ‘capitalist ’, andtherefore ‘ workseffectively througha system ofethics that providesthe vision andthe neededfor successful use ofthe market mechanism andrelated institutions’(p 263 ). Conversely,, he claims, is associated with underdeveloped ethical systems, as demonstratedin particular bythe pervasivecorruption of developingcountries. This developmentalview offers abenignimage ofa maturingcapitalism creating its ownmoral foundations.But howplausible is this view?It doesnot, in the Žrst place,accord with observablefacts. Onthe one hand,it takes twoto enter into acorruptbargain. Transnational corporations basedin advanced capitalist countries havebeen only too willing tooffer (-deductible)inducements to key government ofŽ cials in underdeveloped countries.On the otherhand, massive corruptionpersists in developedmarket ,though its locus has shifted fromthe publicto the private sphere.If oneemploys Sen’ s deŽnition of as ‘the violation ofestablished rules forpersonal gain and proŽ t’ (p 275), one Ž ndsmany instances ofcorrupt behaviourreported in the press. Theseinclude: insider tradingand other manipulations; collusion amonggiant Žrms tokeep highat the expenseof consumers (eg collusion betweenpharmaceutical giants and‘ generic’ drugmanufacturers); tax avoidanceand evasion by corporations and wealthy individuals,especially byusingoff shoretax-havens; Ž rms colludingwith bloody warlordsto extract diamonds,gold, oil andtimber fromwar-torn societies; unduecorporate in uence on lawmakers exertedthrough lavish insider- andcampaign contributions; and—last butnot least— lay-offs ofloyal and diligent employeesby executives ofhighly proŽ table corporations,who then receive rewardsin the formof augmented salaries, bonusesand stock options. Evencertain leadingneoliberals dispute Sen’s sanguineview of the Žrm ethical foundationof contemporary capitalism— see, forexample, the recent booksby GeorgeSoros and Francis Fukuyamamentioned above. Inthe secondplace, Sen ignores a well developedline ofargument that runs directly counterto his benignview that capitalism developsits ownethical basis. This opposingview holds that Western capitalism has beneŽted froma special condition:it inherited its moral foundationsfrom pre-capitalist societies. Probity, trust, concernfor others, duty towards the poorwere internalized normsand values that mediated the harshself-interest underlyingthe developmentof markets. InBritish FredHirsch’ s words,‘ religious obligation… performeda secular functionthat, with the developmentof modern society, becamemore rather thanless important …It …providedthe necessary social bindingfor an individualistic, nonaltruistic market economy.’9 However,in time the individualistic andinstrumental impulses ofmarket competition weakened the swayof , as well as the customarynorms of small, close-knit 1078 THE LIMITSOF NEOLIBERAL DEVELOPMENT DOCTRINE

communities. Essentially, then,this contraryview contends that capitalism, far fromdeveloping an ethical basis, actually underminesits ownpre-capitalist moral foundations.Hirsch’ s analysis seems evenmore potent today than at its publicationin 1977. Finally, Senreturns againto his principal faith: that justice canbe attained in capitalist becausepublic debate can in uence the participants’ values (p281). Once more he emphasizes the importanceof free speechand a (onenot subject to state censorship).It is true that some wealthy individuals will, throughopen discussion, cometo see the importanceof , evenat the expenseof their personalinterests. But it is muchmore likely that economicinterests will prevail.Indeed, the resurgenceof neoliberalism (neoconservatism)in the USAsince the late 1970shas witnessed the resurgence ofinequality, the reversal ofafŽ rmative action insome states, the reductionof social ,the abolition of‘ busing’to racially integrate schools,the growth ofexclusive suburbsdisentangled from inner- woes,the explosionof prison populations,and the decline offoreign . There is preciouslittle evidencehere ofa reasonedand harmonious advance toward an expansion of freedom for all.

VI Sen’s liberal faith in free markets, free speechand reasoned social progress warrants asceptical response.We all embracedemocracy, open discussion of issues, andthe hopethat reasonwill prevail.But toabstract these attractive features frompower relations byfocusing on individual actors, as Sendoes, offers afalse promise to the poorand excluded. Custom, a tyrannical state and laggingeconomic growth are notthe onlyobstacles to political freedomand reducingpoverty. Concentrated economic power, centred on both global and national markets, must also bechallenged.How free is ‘free’trade, for example, whenmore than a third ofworld trade takes place betweenbranches of globally integrated transnational corporations?Or when international trade rules permit ostensibly free-tradingindustrial countries toimpose tariffsonthe agricultural andmanufactured exports of developing countries that competewith local production?Will growththrough market exchangealone vanquish mass , orwill its elimination requirea concertedattack uponpower structures protect- ingthe privileged? 10 Sen’s sanguineadvocacy of reasoned progress fails to address suchquestions. But these are issues that activists Žghtingpoverty and exclusionin underdevelopedcountries cannotignore. Development as the expansionof freedom is far moretumultuous and con ictual astory than Developmentas Freedom proposes.

Notes 1 Fora statement ofa pureneoliberal approach, see WorldBank, Accelerated Developmentin Sub-Saharan Africa:An Agenda for Action ,Washington,DC: WorldBank, 1981. For a generalsurvey of the ofthis strategy in the 1990s, see Charles Gore,‘ Therise andfall ofthe Washington Consensus as a paradigmfor developing countries’ , WorldDevelopment ,28(5),2000, pp 789 – 804. 1079 FEATURE REVIEWS

2 Gore,‘ Therise andfall ofthe Washington Consensus’ , p795. 3 Wolfensohn,‘ Aproposalfor a comprehensivedevelopment framework’ , address totheboard, andstaff ofthe , Washington, DC: World Bank, 21 January 1999. 4 See, forexample, World Bank, Sub-SaharanAfrica: From Crisis toSustainable Development ,Washington, DC: WorldBank, 1989. 5 Foran exhaustive survey of these controversies,see MoisesNaim, ‘Fadsand fashions in economicreforms’ , ThirdWorld Quarterly ,21(3),2000, pp 505 – 528. 6 See JohnWestergaard, ‘Where doesthe Third Way lead?’ , New PoliticalEconomy ,4(3),pp 429 – 436. 7 Seneven cites Marxto supporthis view that the spread of labour markets represents ‘momentousprogress’ . ButMarx’ s pointwas notthat markets representedan expansion of freedom, but that they were of instrumentalimportance in expanding the productive forces. Marxadopted a tragicview of history: proletarianizationleads tovastexploitation, but this tragedy paradoxically lays the groundwork for andthe eventual abolition of labour markets. Thisis notquite Sen’ s point. 8 FrancisFukuyuma, TheGreat Disruption: and the Reconstitution of Social Order , New York:Free Press, 1999,p 3.However, Fukuyama also holds the comforting view that, because human beingsare bynature social beings,they will re-establish social orderin the near future. 9 Hirsch, SocialLimits to Growth ,London:Routledge & KeganPaul, 1977. Emphasis in original. 10 Pragmatic neoliberalsand social democrats divideon thisissue, as dramatically illustratedby theJune 2000 resignationof Dr RaviKanbur as team leader ofthe WorldDevelopment Report ’s2000issue onpoverty. Kanburadvocated an ‘ empowerment’approach to poverty reduction; this entailed redistributive measures anda critiqueof . The World Bank, however, insisted on rewriting the draft report to reassert thecentrality of growth and an open and globalized economy to povertyreduction. When Kanbur resigned inprotest, this fundamental division in development doctrine was starklyrevealed.

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