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”
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.