Unfortunately, in many cases their practices within developing nations have been seen to create more harm than good. This is possibly because both institutions use a one size fits all approach when aiding countries rather than gaining a deep understanding of each country they are involved in and catering their approach as a result. In this paper I will examine the practices of the IMF and World Bank in developing nations that have led to failure and the effects the policies had on these countries. The IMF was created at the end of WWII in order to create a framework for global economic cooperation without creating a second Great Depression. Since its creation it has evolved to tackle a variety of economic issues.
It promotes liberalism and democracy, but it also creates disparity between the government and common citizens. It allows more infiltration of Western cultures in the Global South which is detrimental in preserving cultural norms and traditions in these countries. In other social policy making procedures related to labour force, it provides more insights into benefits that labour groups must enjoy. At the end of the day, problems do not lie on globalisations, but on the incapacity of Global South countries to maintain its competitive edge in the market, as well as the post-colonialism attempts of those in the Global North. The standard of living of the people ought to elevate next to its booming economy.
Classical economists had looked at the equilibrium of supply and demand for individuals, but Keynesians focuses on the economy as a whole. Keynesian economics is also an idea basically including three sectors which are individuals, business, and government and the actions that government takes. This theory proposes that using the fiscal policy the government should help the economy. Keynesian economics tried to reach a level of equilibrium within the economy where output and prices are constant; there was no surplus in supply, and no deficit. Keynes idea seemed very different and at the time and Keynes was considered a socialist.
There may be some indigenous tribes within some countries that can lay the claim that they are self-sufficient, however, there is not a single country that can say the same. Proponents of an open trading system contend that international trade results in higher levels of consumption and investment, lower prices of commodities, and a wider range of product choices for consumers (Carbaugh, 2009, p26). Free trade is necessary. How do countries decide what to import and what to export? Comparative Advantage Ricardo's Theory David Ricardo was a leading economist in the 1800s.
Within this context of conventional process, analysis of this evolutionary timeline will expose an answer to the question of “Why today we seem to focus “more” on distribution of income among households or individuals?” On the other hand, it will be unfair to say that individualist approaches emerged just recently. When Adam Smith explained his thoughts on “private interests” and “public benefit” at late 18th century, no one can precisely argue that those ideas will change the flow of the social sciences. He told that annual revenue of society is always equal to exchange... ... middle of paper ... ...ficient welfare state. However, as we analyze individuals separately, the study will show that there are groups of peoples whose belong to different economic sections within the society. As the crucial issues like growth theory and many other requires the integration of sub-disciplines of economy including labor economics by using both macro and micro approaches on analysis.
The World Trade Organization or World Fair Trade Organization? The recalibration for the WTO At the turn of the 20th century, the WTO helped create prosperity through globalisation and trade liberalisation. After WW2, it was clear that the world required rebuilding to prevent conflict related to resource access and to create prosperity. The main challenge at the time was economic despair. The Bretton Wood Conference gave rise to the IMF, The World Bank, GATT and later the WTO to solve these challenges.
In order for a country to receive a loan from the IMF, the country has to accept a set of conditionality impose by the institution. These conditionality are sets of economic policies and financial measures based on what the IMF believe will help the economy of the country and safeguard IMF resources. According to Peet, “the institution appeals to the best of neoclassical economic science backed now by fifty years of experience in the loan business” to create the conditionality impose on each country. In recent years, the IMF has been severely criticized because, these conditionality have worsen the economic situation in many countries instead of improving them and the most affected have been the working class. The focus of this paper is (1) describe the principles, purpose and structure on which the IM... ... middle of paper ... ...se crises has been appropriate…not perfect, to be sure, but far better than if the structural elements had been ignored or the fund had not been involved”.
Pontusson analyzes redistributive policies postwar, with comparison to European countries, to clearly demonstrate the expansion that results from a welfare state being impacted by the distribution of income. In fact, overall redistribution is found directly correlated to poverty alleviation. Conversely, programs that directly impact the poor do not seem to augment the redistributive impact of social spending. Pontusson argues that such programs generally lack the widespread support in political arenas to present select benefits. Additionally, through the analysis of a trans-national comparison, there is presented little evidence to support that expansion of a welfare state brings about great change to economic growth or to the standard of living.
Poverty may be one of the most obstructive and disturbing factors in human life and it is the core of underdevelopment and insecurities throughout the world. Due to this verity, many developing nations have experienced dilapidated economic conditions while at the same time, accumulating to multilateral public lending agencies, such as the World Bank and the IMF, and to foreign governments. The lack of all developmental factors in human life has been the cause of sustainable underdevelopment in our societies and the poor country debt legend has been tolerable to drift on for too long (Francis, 2001). The proliferation of financial and currency crises among developing countries are frequently viewed as a natural effect of the "growing pains" linked with financial globalization (International Monetary Fund, 2003). Due to the rapid growth rate and better economic policies existing today, even some of the world’s poorest countries seek to borrow from... ... middle of paper ... ...egarded as the principle way to contribute to poverty reduction and debt sustainability.
Not so because poverty is a multidimensional phenomenon. The list of basic needs enumerated in the definition above... ... middle of paper ... ...l or a government gift, but rather as fundamental human rights that must be fully enjoyed. In conclusion, I have argued in this essay that poverty is unequivocally a human rights issue. A better understanding of the human rights frame as explained above is crucial to improving the lives of those trapped into poverty. Economic growth alone as advocate by economist cannot lead the anti-poverty campaign to success.