Orthodox Economic Education, Ideology and Commercial Interests: Relationships that Inhibit Poverty Alleviation

This paper has been included in the publication
“The Economics Curriculum: Towards a radical reformulation”

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Abstract

Many factors have been cited for the continuing, intractable poverty condition in most poor countries.  One is that their governments are unstable, rife with corruption, and unwilling to reform their economies, and menaced with failure when they implement reform efforts. A second is the combination of geography and entrenched traditional attitudes that trigger resistance to   what orthodox economic advisers argue is “sound” policy advice. Still other analysts have concluded that the cause of low economic growth is the presence of bad institutions.  A fourth explanatory factor concerns the principal agent problem plaguing the large, bureaucratic development organizations.

This paper focuses on another cause – the  combined and iterative impact of  three unwholesome relationships:  (1)  the relationship  between  the narrow, ideological graduate  economic education and the orthodox development perspective held by the international agencies; (2) the relationship between  international agency policies and  the ideological foreign policy  interests of the USA and UK, interests some argue  that  seek to gain control over poor countries’ resources while promoting implementation  of  a  pro democratic, free market ideology; and (3) the relationship between  development policies introduced by the international agencies and the commercial interests of multinational corporations and international banking firms, the interests of which are  interrelated with USA and UK foreign policy interests.

The conclusion drawn is that there is substantial evidence that demonstrates the poor in developing countries are often better off when their governments ignore the policy advice of the IMF and World Bank.  Countries such as  China, India and other countries in East Asia that have not followed IMF economic programs and prescriptions have seen more of their people lifted out of poverty in times of economic growth than have nations that take the advice of the Washington-based lenders. Unfortunately, although the impact of aid programs such as the IMF’s structural adjustment loan programs can be likened to the “Flight of Icarus” that aimed for the sun but ended in a sea of failure, the international development agencies steadfastly advocate large-scale market reforms to promote poor countries’ development while continuing to justify and propagate their policies through academic indoctrination. What the international agencies fail to recognize, or admit to, is that their orthodox development policies and inherent values had provided an effective ideological shield during the Cold War, but no nation had ever been built on this type of theoretical framework.

6 responses

  • dragoljub stojanov says:

    agreem. My expierience with transition process in Bosnia and Herzegovina and Croatia provide ample evidence for the thesis.
    Besides, I did write an article entitled -Cybernetic neocolonialism:TNC and IMF partners on global economy.,as far back as 1984

  • Jim Angresano says:

    Dragoljub

    I was in Bulgaria during 1991-1992 and then in what became the Czech Republic 1992-1993. In addition I visited many Central and Eastern European countries during that time period. The central thesis of my paper was illustrated over and over again as I learned from many university faculty in that region, as well as from Western “consultants” working in the region.

  • Edward K Ross says:

    Generally i am very much in agreement with your paper my response is not from an academic background rather it is based on practical experience as in P.N.G. . Where my late wife and i worked as volunteers in a remote part of the west sepik area.for 12 years finishing in 81. THUS i am in total agreement with the importance of first learning the local culture and social system secondly any one involved in development really needs to know the subject they subject they are endeavoring to teach and then be able to adapt that knowledge to the local conditions Next while i am in agreement with your criticism of neo liberal economic theory and the likes of the imf and world bank as well as trans national corporations you seem to have missed the fact much of development theory argues that pouring money in at the top then trickles down. From my experience and as you say in different words only supports corruption.therefore i argue development must start from the bottom up Finally after mY P.N.G. experiencei did a mature age bachelor of arts degree at gelong university Australia that included Anthropology and third world development and did several papers based on my P.N.G. experiences subsequently i am aware of some of the authors you quote as well as some others

  • Jim Angresano says:

    I did not miss the point – you did. Development theory (neoclassical style) argues this, but development reality is quite the opposite. I suggest you read Naomi Klein’s THE SHOCK DOCTRINE and William Easterly’s THE WHITE MAN’S BURDEN, as well as Ha-Joon Chang’s BAD SAMARITANS. Each will argue forcefully against the notion of trickle down, especially when induced from the top.

  • Edward K Ross says:

    THANKS FOR THE REPLY It seems i did not make myself clear firstly from observation in the real world i am very much against neo classical -economic rationalism for two main reasons one it bears no relevance to the real world two main stream neo liberal economists refusal to openly engage in discussion, conversations with those who offer an alternative view destroys any creditability main stream economic may have had. next some of the reading material for my course in Anthropology and third world development was Anthropology and third world development edited by Bill Geddes,Jenny Hughes and Joe Remenyi 1994 and Global Forces,Local realities Anthropological perspectives on change in the third world. edited by Bill Geddes and Malcolm Crick 1997 Furthermore Geddes, Crick and Remenyi all seriously question the validity of main stream economics and strongly support development from the bottom up. re the authors you have suggested i first read an artical of Naomi Klein in 2000 and Ha Joon Chang in approximately 2004 . However i can assure that that i will endeavor to obtain the books you recommend i probably hardly need to tell you that i have had very little education but believe passionately in helping the undeveloped poor people to help themselves Therefore i have to congratulate you on your paper which i first read when it was first published in the P,A.E. JOURNAL. ted

  • Asad Zaman says:

    I wrote a paper on the same theme — Anti-Poverty Policies and Anti Poor Philosophies — it can be downloaded from SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2273127

    The problem is that the mainstream occupies center stage in propagation of false theories. The main issue facing us is: how to reach our audience? Heterodoxy is tolerated in at most one or two departments in US Universities, while Orthodoxy is taught as a religion at hundreds. All leading scholars, policy makers, journalists, and other influential idea mongers are trained at institutions designed to propagate these false theories. We can devise a new curriculum, but who will teach it, and at which universities?

    ABSTRACT of PAPER: Anti-Poverty Policies and Anti Poor Philosophies.

    In this paper, the many policies, philosophies, and theories which claim to help the poor, but actually hurt them are discussed. The most prominent recent example is that of the Structural Adjustment Programs vigorously pushed by the World Bank. Their contribution to increasing poverty has been documented by many authors, and even the World Bank has acknowledged their failure. The main theme of this paper is that only a small minority (the top 1%) benefits from the exploitation of the poor. However, in democratic societies, they must acquire the support of the majority to carry out these policies. This process of generating support requires the fabrication of theories which support and justify such exploitation as necessary and reasonable.