Quote Originally Posted by Dayuhan View Post
I guess that's a rant, and maybe it makes me a "neo-liberal". I've never encountered that term outside the academic cloister, and I'm not convinced that anyone who uses it really knows what it means, except that it covers all the stuff they don't like. But what the hell, if this be neo-liberalism, let us make the most of it. It still works. It doesn't work perfectly (not much in this world does), but there's a good deal to be said for it.
I think there has been a powerful neoliberal impulse in the aid and development community—notably in the international financial institutions, stretching as far back as the Reagan Administration, and often attacked by critics such as Klein. However, I would argue that its all become a bit of a strawperson.

Developmental approaches have become much more nuanced. Almost everyone these days accepts that most employment and growth is generated by private sector activity and investment, and that you can't create large numbers of sustainable jobs with aid money. There's broad acceptance that TNCs can have positive effects (although, in some contexts, negative ones too.)

On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

The World Bank in particular has made major adjustments in the way it works, partly because of external and internal criticism, and partly out of learning from experience. The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.