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importance of economic growth and development
the importance of development
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America has had a long history of aiding countries in need, advancing development and promoting democracy all over the world often working with international financial institutions to achieve these various goals. Institutions that collaborate with the U.S. such as the International Monetary Fund (IMF), the World Bank and the International Bank for Reconstruction and Development (IBRD) have long played an integral part in international development goals over the past 60 years. The way in which assistance was distributed greatly changed during the 1940s after WWII and continues to be a major force in internationals relations. These institutions were created to specifically aid economic growth, but when implementing the numerous policies these organizations have not always been entirely successful.
A prime example of this type of failure was the development and implementation of an economic aid system, named the Washington Consensus, which was implemented in the 1970s and will be examined in detail in later chapters. Countries such as Argentina and Bolivia suffered greatly for many years because, “what had been sold in the early 1980s as a foolproof ‘one-size-fits-all’ solution was shown to be very uneven”(Dunkerly, 2008: 310). Many blame Latin America’s large economic problems from the past 20 years on the different economic development models and especially the Washington Consensus, which will be analyzed throughout this paper. Before examining the Washington Consensus and its affects on Argentina and Bolivia is important to understand how these organizations began and what the primary objectives were in this region. By observing these origins and one is able to see why policies such as the Washington Consensus were eventually a...
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... America, 1954-1984. Comparative Politics. 19 (1), P1-24.
Rochlin, J. (2007). Latin America’s Left Turn and the New Strategic Landscape: the case of Bolivia. Third World Quarterly. 28 (7), p1327 – 1342.
Rodrik, D. (2006). Goodbye Washington Consensus, Hello Washington Confusion?
A Review of the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform. Journal of Economic Literature. 44, p973-987.
Skidmore, T.E. and Smith, P.H. (2005). Modern Latin America. 6th ed. Oxford: Oxford University Press. p1-491.
Thorp, R. (1998). Progress, Povery and Exclusion: An Economic History of Latin America. Baltimore: Johns Hopkins University Press for the Inter-American Developmental Bank and European Union. p1-365.
Valdez, S. and Molyneux, P. (2010). An Introduction to Global Finacial Markets. 6th ed. London: Palgrave Macmillan . p4-489.
Immediately after Argentina’s military regime was over the newly reinstated democratic government kept its neoliberal economic system and was praised for doing so. Many organizations claimed that Argentina would be the country that would lead other Latin American countries into the future through its use of neoliberal pol...
The Alliance for Progress program was initially met with open arms by most Latin Americans leaders and immediately boosted U.S. relations throughout the hemisphere.1 The alliance’s charter was signed by all members of the organization except for Cuba at a special meeting at Punta del Este, Uruguay, on August 17, 1961.2 The drafters of the charter emphasized that the twin goals of economic development and social injustice should be pursued simultaneously and that both should be paralleled by efforts to expand political freedom in the hemisphere. One of the most important factors of the program was the promotion of self-help. Under the alliance’s charter, the participating Latin American countries would provide eighty percent of the funding and the remaining twenty would be pledged by external sources, which would be furnished by the United states, other wealthy countries, and a variety of public and private groups. Though created to ensure the improvement of Latin America, there were many dilemmas within the Alliance for Progress. The program was not really an alliance and it did not progress satisfactorily.
These international economic institutions should possess substantial transparency considering their policies directly affect the public. Instead, the IMF and similar institutions have no accountability to the public of which it is supposed to serve. Through lack of transparency, countries with major influence in the IMF such as the U.S. can indirectly impose its own investment agenda upon the country in crisis. If actions of the IMF were directed through a democratic process, more logical and productive policies would develop. If the IMF promotes transparency through the policies it imposes on developing countries, it should set an example through its own governance.
The Latin American economic model prevented much change in the countries that it affected. While the model allowed countries such as Argentina to succeed for a time, the long-term results are unsatisfactory. With all of these factors considered, it is not surprising that Latin America is stricken with poverty and inequality.
International Aid operates in almost every corner of the globe, is part of the transfer of billions of dollars of assistance through countless organizations, charities, and funds; and involves the efforts of hundreds of thousands of dedicated workers and affects billions of people. . This paper will provide a historical summary of how aid has grown and developed in stages, from a humanitarian concept first applied in the 19th century to established international policy and law following the Second World War and later the Cold War. We will review the impact of the wave of newly independent nations in the 1940’s and 1950’s and the rise of multinational aid organizations in the 1970’s and non-governmental organizations (NGO’s) in the 1980’s. We will conclude by detailing recent emerging trends in aid through the 1990’s into the present day.
Wesson, Robert. Politics, Policies, and Economic Development in Latin America, Hoover Institution Press, Stanford, California, 1984
Leftist governments of Latin America show evidence of the neoliberal trap. Neoliberalism can be defined as free-market economic policies enforced in reaction to the import substitution industrialization in Latin America (also known as the Washington Consensus) and include untampered market prices, fiscal discipline, exchange rates set by the market, privatization and trade liberalization with the ultimate goal of reducing government intervention in the economy
The International Monetary Fund (IMF) is an international organization was set up in 1945 after World War II. The whole world had experienced severely destruction during the period World War One and World War Two, each state need the restorative processes and a good platform to recover its inherent ability and make their citizens get rid of poverty, hence economy problem it was the first problem that states should be concerned.
Throughout the 20th century Latin America has been a virtual laboratory of development strategies. The principal objective was to discover the solution for the economic puzzle of the region. When attempting to explain underdevelopment, the interaction between the state and the market has been at the core of several theorists. There have been different economic approaches implemented to tackle this issue. Each of them would differ in the degree of importance of external economic relations in their national economies, as well as, the degree of intervention of the government. In the 1950s, responding to Prebisch’s Dependency Theory Latin American governments implemented Import Substitution Industrialization (ISI). Which was a strategy focused
the effect that the work of the IMF and the World Bank have had on the
The International Monetary Fund and the World Bank were created as a result of the Bretton Woods Conference. Both provide assistance to countries suffering economically. While the IMF is a cooperative institution that aims to create an organized global system of payments and receipts, the World Bank is an institution that aims to help developing countries (Driscoll 1). Both play a part in the economies of struggling nations with the goal of reducing their burden and helping them to survive in the global economic system. 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.
Sunkel, Osvaldo. National Development Policy and External Dependence in Latin America. In: The Journal of Development Studies, Vol. 6, no. 1, October 1969.
In financial terms, Exchange Rates (ER) refer to the worth of two different currencies in regards to each other (Sullivan & Sheffrin, 2003), whereas the Foreign Direct Investment (FDI) refers to the net inflows of foreign investments. This is so if the investment is to acquire a lasting interest in terms of management where the enterprise that is operating in the specific economy in question is a different entity from the investor (Soltani, 2009).
“If you owe your bank a hundred pounds, you have a problem; but if you owe it a million, it has.(1)”
According to Pease (2012), an international organization are conceived as formal institutions whose members are states and these are divided into two sub-groups called intergovernmental organizations (IGO) and non-governmental organizations (NGO). An IGO consists of states that voluntarily join, contribute financially, and assist in the decision making process. All of their members’ resolves, structures, and administrative protocols are clearly outlined in the treaty or charter. An example of an IGO is the North Atlantic Treaty Organization (NATO). First, all IGOs comes from an established government which can be further categorized by rules of membership which qualifies NATO because it is an alliance of about 30 members from North America and Europe. Secondly, IGOs can have limited participation in membership or restricted membership which qualifies NATO because this is a security agreement and it limits its involvement by confining it to an amalgamation of specific governmental, geographical, and martial considerations. Thirdly, IGOs are categorized by their purpose meaning the member can be multi or general purpose organization and they can take on any global issue (Pease, 2012). This qualifies NATO because over the years the organization has participated in several international war related issues such as the Korean War and the Cold War. Most recently, NATO, for the first time in history had to engage Article 5 of the treaty after the 9/11 attacks in New York City and the no-fly zone in the country of Libya.