Neoliberal Experiment Research Articles

Back to the Future? Reflections on past reforms and future prospects for health services in New Zealand

In 1991 the New Zealand health system began to experience what has been termed the `turbulent decade'. Without health sector consultation or public mandate, an era of imposed market oriented reforms began. These changed the overall culture of health care delivery and the expectations of New Zealanders regarding the role of the state in the provision of welfare. In retrospect the ideologically driven imposition of the market-oriented reforms was not an exercise of bold leadership but one of political arrogance and rejection of established community values. Within the community, the neoliberal experiment heightened income and health inequalities, created a loss of social cohesion and generally provoked feelings of powerlessness. In the health sector, the reforms polarised clinical and commercial cultures and changed the geography of health care delivery. This occurred not only because place was de-emphasised, but also because decentralisation of purchasing created four health systems with widely divergent contracting arrangements and standards of care. The lessons of the health reforms have been painful, and must not be lost. A fundamental lesson is that market approaches to the delivery of health care have major limitations and that the ultimate goal of a health system should be the equitable, effective and efficient provision of care, not the profitable sale of commodities. Since 1997 there has been a retreat from the market, although it is not clear whether recent policy developments represent a new or distinctive `third way' or a pragmatic `pick and mix', combining the best from the market and the managerialism first introduced by Labour in the 1980s. Quite clearly, the experiment with the market was not sustainable. Whether this will also be true of the more recent and pragmatic `pick and mix' approach of the `third way' to health care reform is uncertain.

The Role of the Trade Unions in Social Restructuring in Scandinavia in the 1990s

Social restructuring in Scandinavia during the 1990s has taken different national directions, but no firm retrenchment policies have been implemented. Reforms of labour market regulation and social protection systems cannot be explained without reference to the trade unions. In corporatist arrangements and direct contacts to both politicians and bureaucrats they perform key political actor roles, influencing policies and public debates. The organizations have most important knowledge, resources, points of view and veto points in the systems, and they have used their resources and capabilities to avoid neo-liberal experiments in public policies during the last decade. The labour market organization s’ own collective bargaining systems are, however, also allocation of values and welfare elements, and both developments in industrial relations and social policies are investigated. Sweden has changed not only benefit levels but also decision systems more than Denmark and Norway, decentralizing industrial decision-making and decreasing the importance of administrative corporatism. Contrary to this, Denmark strengthened corporatism in the 90s, resulting in better labour market performance. No big systemic change has happened in Norway, but it goes for all three countries that path dependent developments can be recorded.

The Early Years of a German Institution: The Kreditanstalt für Wiederaufbau in the 1950s

The Kreditanstalt fur Wiederaufbau (KfW) originated from a disagreement between the British and the Americans on banking policy in occupied Germany and a change in US occupation policy in early 1948. The German administration took the opportunity to create a unique institution to support the reconstruction process. Drawing on the Marshall Plan counterpart funds, the KfW provided otherwise unobtainable long-term investment finance for the economy. Since these funds were given in consultation with and on the request of the government, the KfW provided more than investment finance for bottleneck sectors, it conducted Wirtschaftslenkung. This was highly important to sustain the neo-liberal experiment in West Germany and aided certain political objectives of the Adenauer government at the same time.

Neoliberal reforms and macroeconomic policy in Peru

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An Institutionalist Perspective on Regional Economic Development

Until recently, regional policy has been firm-centred, standardized, incentive-based and state-driven. This is certainly true in the case of the Keynesian legacy that dominated regional policy in the majority of advanced economies after the 1960s. It relied on income redistribution and welfare policies to stimulate demand in the less favoured regions (LFRs) and the offer of state incentives (from state aid to infrastructural improvements) to individual firms to locate in such regions. Paradoxically, the same principles apply also to pro-market neoliberal experiments which have come to the fore over the last fifteen years. The neoliberal approach, placing its faith in the market mechanism, has sought to deregulate markets, notably the cost of labour and capital, and to underpin entrepreneurship in the LFRs through incentives and investment in training, transport and communication infrastructure, and technology. The common assumption in both approaches, despite their fundamental differences over the necessity for state intervention and over the equilibrating powers of the market, has been that top-down policies can be applied universally to all types of region. This agreement seems to draw on the belief that at the heart of economic success lies a set of common factors (e.g. the rational individual, the maximizing entrepreneur, the firm as the basic economic unit and so on). The achievements of both strands of such an ‘imperative’ approach (Hausner, 1995) have been modest in terms of stimulating sustained improvements in the economic competitiveness and developmental potential of the LFRs. Keynesian regional policies, without doubt, helped to increase employment and income in the LFRs, but they failed to secure increases in productivity comparable to those in the more prosperous regions and, more importantly, they did not succeed in encouraging self-sustaining growth based on the mobilization of local resources and interdependencies (by privileging non-indigenous sectors and externally-owned firms). The ‘market therapy’ has threatened a far worse outcome, by reducing financial transfers which have proven to be a vital source of income and welfare in the LFRs, by exposing the weak economic base of the LFRs to the chill wind of ever enlarging free market zones or corporate competition and by failing singularly to reverse the flow of all factor inputs away from the LFRs. In short, the choice has been that between dependent development or no development.

Redefining the Role of the Bourgeoisie in Dependent Capitalist Development

In a recent article, Geisa Maria Rocha (1994: 73) examines privatization and liberalization in Brazil in an attempt bring back dependency theory as a framework for explaining outcomes of growth strategies recommended by liberal neoclassical/modernization paradigm in its current guise of neoliberalism. Rocha's argument is based on a review of Brazilian foreign debt crisis and its links with privatization program. She advances two main propositions: that Brazil's neoliberal experiment is leading to new reliance on external flows of capital and its contradictions: extreme social and economic inequalities, perpetual financial dependence, monopolization, denationalization and deindustrialization and that the policy reforms do not constitute a shift in growth strategy, being aimed simply at further internationalizing country and thus 'perfecting' dependent development, with its inherent vulnerability to external economy and its severe restriction of local control over national economic policy-making. This is a laudable effort. It is opportune as well, for nothing better symbolizes challenges facing dependency school than trajectory of one of its brightest champions, Brazilian president Fernando Henrique Cardoso. While his writings retain much of their original appeal and are widely quoted in Rocha's study, Cardoso himself has become a God-fearing neoliberal politician.' His government has followed most orthodox economic policies since 1920s, leading even former finance minister Delfim Netto (whose record Rocha discusses) to reprimand Cardoso's economic team for its excessive radicalism. Attempts to provide a credible dependency alternative face difficult theoretical and empirical challenges. Rocha's article, while cogent and inspiring, leaves much to be desired on both counts. Rocha makes a promising

Alter Wein in neuen Schläuchen: ein bitterer Nachgeschmack

In history, neoliberal experiments like that in New Zealand proofed to be a »bad idea« for the subjects, but not for the designers and local elites associated with them. lf we look at the advanced countries (Western Europe, Japan, USA) we can find that they developed without such experiments, but with the support of a »nanny-state«. Only when they became strong enough, they praised the principles of »free market«.

The urban informal sector in Uruguay: Its internal structure, characteristics, and effects

The literature on Third World urbanization has focused increasingly on the informal sector as a mechanism to explain, first, the survival strategies of the poor excluded from regular employment and, second, the strategies of formal firms to bypass regulatory constraints and reduce costs. This paper pursues these lines of research in a special context, namely that of Uruguay, a small country which followed a protective labor policy for many years, but reversed it during the 1970s and early 1980s. Data come from a sample of 700 households in Montevideo, which are representative of the low-income neighborhoods that comprise approximately two-thirds of the city's population. Interviews were held in 1983–1984. The analysis focuses on the following issues: (1) the proportion of individuals and households who participate in the informal economy; (2) the types of informality that exist in both principal and secondary occupations; (3) the effects of informal employment on income; (4) differences in age, sex and education between different types of workers; (5) changes in informal employment over time. Implications of findings for general definitions and hypotheses about the informal sector are examined; the relationship of results to the neoliberal experiments attempted in Uruguay between 1973 and 1984 is discussed.