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Mainstream Vol. XLVI No 26

A Critique of Neo-Liberal Development and Alternatives

Sunday 15 June 2008, by Jajati K Pattnaik

Neo-liberal development based on the foundations of free market, free trade, and integration building policies envisages a world order glowing with growth and prosperity. Globalisation as the instrument of this philosophy espouses the diffusion of knowledge and technology stretching de-territorialised economic growth. The driving forces behind this process are transnational corporations and international financial institutions intended to create a new epoch in international relations with a ‘harmonious one world’. However, global capitalism, that vigorously rose from the eighties onwards, has not brought any significant change in the socio-economic conditions of the developing nations. At the end of the last century, in accordance with the World Bank reports, approximately one-fifth of the global population, that is, 1.2 billion, lived in abject poverty with less than one $ (dollar) per day.1 The gap between the developed and developing nations widened in spite of the benefits of global capitalism. Besides causing inequalities, the global capitalistic institutions with their financial supremacy also managed the political elites and served their interests often leading to bad governance and loss of accountability in the delivery system. Legitimate protest to correct the mistakes were viewed as hindrances to the process of development and freedom of the people.2 The neo-liberal development also brought its consumer culture often dominated by the US, Europe and Japanese allies. John Agnew and Stewart Corbridge observed that “a new de-territorialised geo-political order—the hegemony of transnational liberalism—was emerging” while noting “a new ideology of market being embedded in and reproduced by a powerful constituency of liberal states, international institutions, and what might be called circuits of capital themselves”.3 The global information infrastructures, a conglomerate of Bertelsmann, CNN, New Corporation, Poly Gram, Sony, Viacom and Universal, promoted the cultural industry of the West. The world market was gradually thronged with inexorable icons, namely, Coca-Cola, McDonald’s, Disney, Nike and the landscape of shopping malls, sports stadiums and branded restaurants.4 This new wave of McDonaldisation created the thrust of cultural imperialism.5

Neither has the neo-liberal model attained prosperity nor has it guaranteed security and stability. The critics are right in denouncing the Western countries being hypocrites in their entire approach towards the poor countries. Even if one dissents with this, it is sure that the West seeks to follow its globalisation agenda to grab the excessive share of benefits at the cost of the developing world.6 It poses a challenge to local cultures, augments global inequalities and aggravates the conditions of the destitute. In the process, it creates a ‘world of winners and losers’—a few blooming with prosperity and many sunk in a life of distress.7


RESPONDING to the drawbacks of neo-liberal development, alternatives emerged in the discourse of development. The post-development theory, one of those alternatives, is an intellectual offshoot of the Foucauldian intellectual traditions. Drawing its principles from the works of French philosopher Michel Foucault, the post-development theory mirrors development in the prism of a discourse.

This theory argues that development constitutes a specific way of thinking about the world, a particular form of knowledge. Development is, in the Foucauldian sense, a particular discourse which does not reflect but actually constructs reality. In doing so, it closes off alternative ways of thinking and so constitutes a form of power.8

This theory holds that the objective of discourse is to legitimise and transpose the Western model over the Third World. The Third World is not only predisposed to the economic power, but it is also constrained by the ‘definitional power of the West’.9 Development is a benchmark through which the West gauges the non-West. It disciplines differences and establishes the standard norms for the society. The measures of development become the devices for the exercise of power over others.10 The post-development thinkers view that the Third World is categorically objectified and the requirements of the people are externally decided. To find a solution, the post-development scholar, A. Escobar, stresses on defining the term underdevelopment to displace the discourse of development.11

THE Marxian theory in the contemporary perspective is another alternative response to the failures of development. It points out that the Western project of development is based on polarisation, unequal relations, and subordination of industries of the peripheries.12 Samir Amin, a leading scholar of this school, views that the global expansion of capitalism has created unequal income distribution ‘between and within the societies on the periphery of the system’.13 It has resulted in the marginalisation of the disadvantaged groups and their further impoverishment in the social structures. He mentions that the present crisis can be resolved in reconstructing the social power of the popular classes as a counter-hegemonic force in collaboration with the intelligentsia to confront the functionaries of the world system.14

The human development paradigm based on Amartya Sen’s capability approach is another alternative to the neo-liberal development. Sen in his work on ‘Development as Freedom’ interprets development ‘as a process of expanding the real freedoms that people enjoy’.15 Growth of gross national product, technological progress and industrialisa-tion etc. may be important denominators for realising freedom in a society, but they are not the end of development. The realisation of freedom hinges upon the other determinants such as freedom for participation in public discussion, political and civil rights, provision for educational and health facilities, elimination of poverty, tyranny, social deprivation, intolerance and unrestrained power of the repressive states.16 Sen holds that expansion of freedom is viewed as both the means and end of development which can be called the constitutive as well as instrumental role of freedom in development. The constitutive role is substantive freedom which pertains to the enrichment of human life. The instrumental role deals with the presence of civil and political rights, economic and social opportunities and protective securities.17 This contributes to the expansion of human freedom and development. Mahbub Ul Haq, who has developed this paradigm, interprets development in the context of expanding people’s choices.18 He finds that growth deals with the rise in individual income whereas development induces political, social and cultural aspects. He further observes that a link between growth and human lives is to be established through public policy. This can be achieved by restructuring the economic as well as political power and having sweeping land reforms, progressive tax system, provision of basic social services to the deprived sections, removing hindrances in economic and political spheres, equality of opportunity and political and cultural freedom.19

The analysis of this discourse connotes that the neo-liberal paradigm may not be a panacea to the crisis-ridden societies of the developing world. Taking a clue from the development alternatives, the parameters of development could be constructed on the following lines.

A people-centric development paradigm is to be structured basing on universal human values such as democratic legitimacy, transparency, justice and equity for its sustainability.

Development is not to be measured solely in terms of growth of gross national product but must be assessed in the background of human contentment. Enrichment of human life could be possible by realising morality, healthy family values, spiritualism, civil and political freedom, provision of basic socio-economic opportunities, protection of environment and social security guarantees.

Unbridled market forces lead to exclusive development culminating in crime and violence in society. A regulatory mechanism is to be evolved by the state to control the market forces and thus help percolate the benefits of development to the lowest strata of society for inclusive development.

The institutional machinery is to be based on the rule of law that reflects transparency and accountability for effective governance.

Institutions of governance are to be democratised and decentralised in order to ensure the participatory approach in the political process and endow the citizens with the responsibility of managing their own affairs at the grassroot level through people’s planning and initiatives.

Public deliberation through civil society engagement is to check the authoritarian attitude of the state and strengthen the process of democratic machinery from the perspective of development. This is to be sustained through social capital in the form of civic networks based on cooperation and reciprocity that helps the institutions for better deliverance. The citizens should play an active conscientious and non-partisan role in championing the common interests of the people.

Minor ethnic as well as religious groups are to be accommodated in the true sprit of multicul-turalism to thwart the challenges of cultural monism. Inter-cultural dialogue should pave the way for cultural diversity and pluralism. The principles of trust, tolerance and fellow-feeling should guide the actions of the human beings for their peaceful co-existence.

Nonetheless, the discourse on development is a never-ending subject. So, more development alternatives could be framed through comparative studies for addressing the problems of the developing world in the days ahead. n


1. Joachim Heidrich, “On Transnationalisation and the Strategy of Globalisation”, The Indian Journal of Political science, Vol. 62, No. 3, September 2001, p. 378.

2. Atul Bharadwaj, “Understanding the Globalisation Mind Game”, Strategic Analysis, Vol. 27, No. 3, July-September 2003, p. 321.

3. Cited in John Baylis and Steve Smith, The Globalisation of World Politics: An Introduction to International Relations, Oxford: Oxford University Press, 2007, p. 542.

4. Ibid.

5. Arie de Ruijter, “Globalisation: A challenge to the Social Sciences” in Frans J. Schuurman (ed.), Globalisation and Development Studies: Challenges for the 21st Century, New Delhi: Vistaar Publications, 2001, p. 36.

6. Joseph E. Stiglitz, Globalisation and its Discontents, New Delhi: Penguin Books, 2003, p. 7.

7. Anthony Giddens, Runaway World: How Globalisaiton is Reshaping our Lives, London: Profile Books, 2004, p. 15.

8. Cited in Andy Storey, “Measuring Development” in Gerard McCann and Stephen McCloskey, From the Local to the Global: Key Issues in Development Studies, London, Sterling, Virgnia: Plato Press, 2003, p. 35.

9. Ibid.

10. Ibid.

11. Ibid., p. 37. See, A. Ecobar, “The Making and Unmaking of the Third World through Development” in M. Rahnema and V. Bawtree (eds.), The Post-Development Reader, London and New Jersey: Zed Books, 1997, p. 92.

12. Mohit Bhattacharya, “Globalisation, Governance and Development”, The Indian Journal of Political Science, Vol. 62, No. 3, September 2001, p. 355.

13. Ibid.

14. Ibid.

15. Amartya Sen, Development as Freedom, Oxford: Oxford University Press, 2004, p. 3.

16. Ibid.

17. Ibid., pp. 36-37.

18. Mahbub Ul Haq, “Human Development Paradigm in South Asia”, Mainstream, February 24, 1996, p. 17. See Des Gasper, The Ethics of Development: From Economism to Human Development, New Delhi: Vistaar Publicaitons, 2005, pp. 164-167.

19. Ibid., p. 18.

The author is on the Faculty of the Department of Political Science, Indira Gandhi Government College, Tezu, Arunachal Pradesh. He was a Visiting Scholar at the Gulf Studies Programme, Centre of West Asian and African Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.

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