15 thoughts on “106. IMF Concept of Good Governance”
1)
Neoliberalism is a set of economic practices which states that human well-debing
is best advanced by liberating individual entreprenurial freedoms and skills
in an institutional framework characterized by strong private property rights,
free trade and free market.
simply stating neoliberalism is a poltical ideology which gives priority to
individual freedom and right to property
The role of state will be limited to create and preserve neoliberal policies.
The state has to provide functions required to secure private property rights
for the functioning of the markets. In case the markets itself are absent,
neoliberal ideas suggests that the state should create them (eg., land,
water, health care etc.,) but once created, the state should not venture into
functioning of these markets, neoliberalism calls for a complete laissez-faire
and abolishment of government.
The implementation of neoliberal policies will lead to
1. Relocation of power from political to economic processes
2. Markets and individuals have more power than the state,
3. The legislative and executive autorities will assume no
power (or will assume only minimal power) and judiciary
will replace the states.
Your understanding of Neo Liberalism is good. I am really happy. One small grammatical error: the word abolishment is wrong. It should be abolition. Keep it up. Others would do well to read your reply.
2)
During 1930’s when countries tried to raise barriers on the foreign trade and
devalue their currencies as a response to the 1929 US ecomomic crisis, it further
deepend the crisis (the “Great Depression”) and afftected many countries that
are largely depended on foreign trade. This financial breakdown was due to
lack of international monetary cooperation.
Further, many Western European countries were bankrupt post world war-II and
needed immediate assitance in reconstruction.
The lessons thought by “Great Depression” and the need for a greater economic
assistance for many war ravaged countries during WW-II lead to the creation of
IMF and WB.
IMF and WB were created at an international conference in Bretten Woods
in 1944 to establish a framework for economic co-operation and development,
international trade, stabilize exchange rates and develeopment that would
lead to more stable and prosperous global economy.
WB’s Mandate:
1. Long term Economic development
2. Promote Social progress by raising productivity
3. Poverty reduction
4. support countries to reform particular sectors or implement specific projects
IMFs Mandate:
1. International monetary cooperation, policy advice and technical assistance
2. Help counries design policy programes to meet Balance of payments
For achieving the stated objectives of IMF and WB, they pool the money from member
countries. A qouta system is introduced to raise the funds which are used for loans
or other developmental programes by these institutions. The quota system reflects the
relative size in global economy, thus most developed countries contribute more funds and
thus have major say in the making and revison of rules. As the financial powers regulate
the functioning of these institutions, the borrowers are forced to accept the norms/rules
forced upon them, thus these institutions are favouring neo-liberalization policies
and global-capitalism.
One of the best examples is the Nixon Shock which ended the basic Bretton woods System.
The infulence of financial powers can also be seen in the recent bailout packages provided
to the Eurozone countries where lenders wanted the borrowers implement severe austerity
measures.
IMF and WB instead of serving the developing and poor nations build their economies, ended
up serving the interests of the few global financial powers.
Your understanding of the IMF andc the WB is perfect. Indeed they were regarded as the Keynsian Twins and were primarily meant to help the developing and under-developed countries. But with the collapse of the USSR, these two bodies were highjacked by the US and its allies who tried to further the neo-liberal principles through them. So I really feel that India and China with their huge balances must set up a parallel organization.
Once again it is students like you who make my experiment of communicating through the blog site worth while.
I am sure that you now ours is the only one of its kind in India. Let us innovate. With encouragement through participation I am sure we will go a long way. Really, Sanddeep, God bless you. Your referdence to the website was thoughtful.
4.New management theory aims at 3E’s. Economy, Efficiency and Effectiveness. The emphasis of NPM theory is on performance appraisal, managerial autonomy, cost cutting, innovation, completeness, accountability, flexibility, downsizing and entrepreneurialism. It advocates basic change in the role of state in society and economy. It says that the government should change from a doer of public activities to the distributor of public benefit and facilitator and promoter of change in society and economy. It suggests that the public sector should be organized and managed in a way to meet the challenges of LPG.
The public choice approach emphasizes:
1. Anti bureaucratic approach.
2. Institutional pluralism i.e. plurality of agencies to promote
consumer’s preferences.
3. Diverse demographic decision making centers.
4. Application of economic logic to the problems of public service
distribution.
5. Decentralization.
6. Participation in public administration.
Liberalization refers to relaxation of the previous government restrictions
in the areas of social and economic policies. When government liberalizes trade, it means it has removed the tariff, subsidies and other restrictions on the flow of goods and services between countries.
Liberalization helps in increasing the foreign exchange reserves which will help a country maintain its balance-of-payments which will reduce its dependency on external commercial borrowings.
Liberalization is achieved through Structural reforms, like reducing the government budgets, programs and subsidies for basic goods and services, removing restrictions on the foreign ownership and increasing interest rates.
Privatization refers to the transfer of assets and service functions from public to private ownership or control and the opening of the hitherto closed areas to private sector entry.
Privatization can help
1. improve the quality, performance and efficiency of the industries
2. reduce corruption levels
3. in reviving the sick units which have become a liability on public sector
(eg. should aviation industry be privatized ???)
4. in delinking the decision making process from the political interference
5. concentration of govt on the essential state functions.
Liberalization and de-regulation is an essential pre-requisite to privatization. Privatization is achieved through Disinvestments of PSUs, contraction in services planned by the sates and via lease and management contracts.
Globalization is the process of integrating domestic economy with the world economy through trade, FDI, capital inflows and spread of technology. It involves increasing interaction among national economic systems, more integrated financial markets, higher
mobility of labor.
Globalization will help increase foreign trade, expands market, development of service sectors, technological developments, employment, resource utilization.
Allowing the local currency to determine its own exchange rate without any state intervention, allowing free trade, foreign capital are some of the measures are adopted a global economy.
But Sandeep? Don’t ypu rea;ize that privatization in deffet means Ambanization of India? See how they have swallowed up coal! Sushma put it correctly: Mota mal! Don’t be too sure of privatization. The private sector can swallow the country and carry all the loot to he Swiss Banks.
I do not agree with your uncritical praise of the private sector. They will not hesitate to pledge their grandmother’s gold teeth.
every thing in life has a good side and a bad side to it…similarly privatisation too has its ill effects. it is important that the government take proper steps while carrying out privatisation. even in case of the coalblock allocation,the govn as per the CAG report has given to selected companies instead of carrying out an auction. so the fault is on the proceedings carried out by the government.we cannot blame everything on privatisation.
LPG- liberalization privatization globalization
liberalization as the name suggests means relaxation.it is a process in which the restrictions laid out in the field of social and economic policies are reduced..for example, when the government liberalises trade,it means that it has removed the tariffs,sudsidies and other restrictions in the flow of goods and servicesw between countries.
by privatisation we mean that transfer of services or assets from public to private ownership and opening up of closed areas to private sector entry…it can be carried out through franchising,contracting etc..
privatisation has its pros and cons: it reduces the burden on the exchequer, it wil diversify and modernize the public sector business and make it more competitive.however the drawbacks are that the private companies will stop stop buying shares of loss making and sick companies.the limited resources of the private enterprises wil not meet the vital tasks that alter the economy…etc hence we have to carefully privatize in such a way that it increase the oppertunities and reduce the threat to the economy.
eample of privatisation are:
1)modern food industries limited(mfil)
2)hindustan zinc limited(hzi) etc
globalisation means integrating the domestic economy with he world economy..here it breaks the barriers and brings out insulated countries and make them join the rest of the world.
with the help of LPG ,it has given a platform for developing countries to interact with the developed countries and increase thier exports and imports.it has help countries to develop their economy.
Since the 1990’s activists use the word ‘neoliberalism’ for global market-liberalism and for free-trade policies. Neo-liberalism is a set of economic policies that have become widespread during the last 20 years or so. the effects of neo-liberalism here as the rich grow richer and the poor grow poorer….Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank.
Neo-liberalism is which that supports privatization. Deregulation and enhancing the role of private sector in modern society. It creates Laissez-faire atmosphere for economic development.
while in Neo-liberalism, government will be a enable not a doer.
Individuals will be more power full and there will be absence of unnecessary restriction, the control of government will be abolished which is called lean government.
The IMF and the World Bank are institutions in the United Nations system. They share the same goal of raising living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction. The International Monetary Fund and the World Bank were both created at an international conference convened in Bretton Woods, New Hampshire, United States in July 1944. The goal of the conference was to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy.
The IMF promotes international monetary cooperation and provides policy advice and technical assistance to help countries build and maintain strong economies.
The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries reform particular sectors or implement specific projects—for example, building schools and health centers, providing water and electricity, fighting disease, and protecting the environment
The IMF and World Bank also work together to reduce the external debt burdens of the most heavily indebted poor countries. The objective is to help low-income countries achieve their development goals without creating future debt problems.
LPG:
– Excess of consumption and expenditure over revenue resulting in heavy government borrowings.
– Mounting losses of public enterprises.
– Low Foreign exchange reserves.
– Various distortions like poor technological development shortage of foreign exchanges and imprudent borrowings from abroad.
Liberalisation refers to relaxation of previous government restrictions usually in areas of social and economic policies, thus when government liberalise trade it means removal of tariff subsidies and other restrictions on the flow of good and services between countries.
Privatization refers to the transfer of assets or service functions from public to private ownership. It can be achieved by franchising, leasing and contracting. It offers both opportunities and threats to the economy.
Globalization means integrating the domestic economy to the world economy. It involves increasing interactions among national economic system, more integrated financial markets, economies of trade, higher factor mobility, free flow of technology and spread of knowledge throughout the world. Foreign capital will be attracted and updated technology will enter the country.
Liberalisation refers to relaxation of previous government restrictions usually in areas of social and economic policies, thus when government liberalise trade it means removal of tariff subsidies and other restrictions on the flow of good and services between countries.
Privatization refers to the transfer of assets or service functions from public to private ownership. It can be achieved by franchising, leasing and contracting. It offers both opportunities and threats to the economy.
Globalization means integrating the domestic economy to the world economy. It involves increasing interactions among national economic system, more integrated financial markets, economies of trade, higher factor mobility, free flow of technology and spread of knowledge throughout the world. Foreign capital will be attracted and updated technology will enter the country.
Reasons for implementing LPG:
– Excess of consumption and expenditure over revenue resulting in heavy government borrowings.
– Mounting losses of public enterprises.
– Low Foreign exchange reserves.
– Various distortions like poor technological development shortage of foreign exchanges and imprudent borrowings from abroad.
Features of NPM and Public choice theory:
– Administration can be economically driven perspective on the operation of the government.
– It points out that the Administrator is also involved in policy making
– It insists on respect for employees and says that Civil Servants must be loyal to the Constitution and the Law
– Empolyees were given importance and encouraged to think and contribute.
1)
Neoliberalism is a set of economic practices which states that human well-debing
is best advanced by liberating individual entreprenurial freedoms and skills
in an institutional framework characterized by strong private property rights,
free trade and free market.
simply stating neoliberalism is a poltical ideology which gives priority to
individual freedom and right to property
The role of state will be limited to create and preserve neoliberal policies.
The state has to provide functions required to secure private property rights
for the functioning of the markets. In case the markets itself are absent,
neoliberal ideas suggests that the state should create them (eg., land,
water, health care etc.,) but once created, the state should not venture into
functioning of these markets, neoliberalism calls for a complete laissez-faire
and abolishment of government.
The implementation of neoliberal policies will lead to
1. Relocation of power from political to economic processes
2. Markets and individuals have more power than the state,
3. The legislative and executive autorities will assume no
power (or will assume only minimal power) and judiciary
will replace the states.
Dear Sandeep
Your understanding of Neo Liberalism is good. I am really happy. One small grammatical error: the word abolishment is wrong. It should be abolition. Keep it up. Others would do well to read your reply.
Rao
2)
During 1930’s when countries tried to raise barriers on the foreign trade and
devalue their currencies as a response to the 1929 US ecomomic crisis, it further
deepend the crisis (the “Great Depression”) and afftected many countries that
are largely depended on foreign trade. This financial breakdown was due to
lack of international monetary cooperation.
Further, many Western European countries were bankrupt post world war-II and
needed immediate assitance in reconstruction.
The lessons thought by “Great Depression” and the need for a greater economic
assistance for many war ravaged countries during WW-II lead to the creation of
IMF and WB.
IMF and WB were created at an international conference in Bretten Woods
in 1944 to establish a framework for economic co-operation and development,
international trade, stabilize exchange rates and develeopment that would
lead to more stable and prosperous global economy.
WB’s Mandate:
1. Long term Economic development
2. Promote Social progress by raising productivity
3. Poverty reduction
4. support countries to reform particular sectors or implement specific projects
IMFs Mandate:
1. International monetary cooperation, policy advice and technical assistance
2. Help counries design policy programes to meet Balance of payments
(IMF and WB mandate from http://www.imf.orfg)
For achieving the stated objectives of IMF and WB, they pool the money from member
countries. A qouta system is introduced to raise the funds which are used for loans
or other developmental programes by these institutions. The quota system reflects the
relative size in global economy, thus most developed countries contribute more funds and
thus have major say in the making and revison of rules. As the financial powers regulate
the functioning of these institutions, the borrowers are forced to accept the norms/rules
forced upon them, thus these institutions are favouring neo-liberalization policies
and global-capitalism.
One of the best examples is the Nixon Shock which ended the basic Bretton woods System.
The infulence of financial powers can also be seen in the recent bailout packages provided
to the Eurozone countries where lenders wanted the borrowers implement severe austerity
measures.
IMF and WB instead of serving the developing and poor nations build their economies, ended
up serving the interests of the few global financial powers.
Dear Sandeep,
Your understanding of the IMF andc the WB is perfect. Indeed they were regarded as the Keynsian Twins and were primarily meant to help the developing and under-developed countries. But with the collapse of the USSR, these two bodies were highjacked by the US and its allies who tried to further the neo-liberal principles through them. So I really feel that India and China with their huge balances must set up a parallel organization.
Once again it is students like you who make my experiment of communicating through the blog site worth while.
I am sure that you now ours is the only one of its kind in India. Let us innovate. With encouragement through participation I am sure we will go a long way. Really, Sanddeep, God bless you. Your referdence to the website was thoughtful.
Rao
4.New management theory aims at 3E’s. Economy, Efficiency and Effectiveness. The emphasis of NPM theory is on performance appraisal, managerial autonomy, cost cutting, innovation, completeness, accountability, flexibility, downsizing and entrepreneurialism. It advocates basic change in the role of state in society and economy. It says that the government should change from a doer of public activities to the distributor of public benefit and facilitator and promoter of change in society and economy. It suggests that the public sector should be organized and managed in a way to meet the challenges of LPG.
The public choice approach emphasizes:
1. Anti bureaucratic approach.
2. Institutional pluralism i.e. plurality of agencies to promote
consumer’s preferences.
3. Diverse demographic decision making centers.
4. Application of economic logic to the problems of public service
distribution.
5. Decentralization.
6. Participation in public administration.
Dear Sridevi
I knew that you were good but you are very good. Excellent grasp and summary. Keep it up, Sridevi
Rao
3)
Liberalization refers to relaxation of the previous government restrictions
in the areas of social and economic policies. When government liberalizes trade, it means it has removed the tariff, subsidies and other restrictions on the flow of goods and services between countries.
Liberalization helps in increasing the foreign exchange reserves which will help a country maintain its balance-of-payments which will reduce its dependency on external commercial borrowings.
Liberalization is achieved through Structural reforms, like reducing the government budgets, programs and subsidies for basic goods and services, removing restrictions on the foreign ownership and increasing interest rates.
Privatization refers to the transfer of assets and service functions from public to private ownership or control and the opening of the hitherto closed areas to private sector entry.
Privatization can help
1. improve the quality, performance and efficiency of the industries
2. reduce corruption levels
3. in reviving the sick units which have become a liability on public sector
(eg. should aviation industry be privatized ???)
4. in delinking the decision making process from the political interference
5. concentration of govt on the essential state functions.
Liberalization and de-regulation is an essential pre-requisite to privatization. Privatization is achieved through Disinvestments of PSUs, contraction in services planned by the sates and via lease and management contracts.
Globalization is the process of integrating domestic economy with the world economy through trade, FDI, capital inflows and spread of technology. It involves increasing interaction among national economic systems, more integrated financial markets, higher
mobility of labor.
Globalization will help increase foreign trade, expands market, development of service sectors, technological developments, employment, resource utilization.
Allowing the local currency to determine its own exchange rate without any state intervention, allowing free trade, foreign capital are some of the measures are adopted a global economy.
But Sandeep? Don’t ypu rea;ize that privatization in deffet means Ambanization of India? See how they have swallowed up coal! Sushma put it correctly: Mota mal! Don’t be too sure of privatization. The private sector can swallow the country and carry all the loot to he Swiss Banks.
I do not agree with your uncritical praise of the private sector. They will not hesitate to pledge their grandmother’s gold teeth.
Rao
every thing in life has a good side and a bad side to it…similarly privatisation too has its ill effects. it is important that the government take proper steps while carrying out privatisation. even in case of the coalblock allocation,the govn as per the CAG report has given to selected companies instead of carrying out an auction. so the fault is on the proceedings carried out by the government.we cannot blame everything on privatisation.
LPG- liberalization privatization globalization
liberalization as the name suggests means relaxation.it is a process in which the restrictions laid out in the field of social and economic policies are reduced..for example, when the government liberalises trade,it means that it has removed the tariffs,sudsidies and other restrictions in the flow of goods and servicesw between countries.
by privatisation we mean that transfer of services or assets from public to private ownership and opening up of closed areas to private sector entry…it can be carried out through franchising,contracting etc..
privatisation has its pros and cons: it reduces the burden on the exchequer, it wil diversify and modernize the public sector business and make it more competitive.however the drawbacks are that the private companies will stop stop buying shares of loss making and sick companies.the limited resources of the private enterprises wil not meet the vital tasks that alter the economy…etc hence we have to carefully privatize in such a way that it increase the oppertunities and reduce the threat to the economy.
eample of privatisation are:
1)modern food industries limited(mfil)
2)hindustan zinc limited(hzi) etc
globalisation means integrating the domestic economy with he world economy..here it breaks the barriers and brings out insulated countries and make them join the rest of the world.
with the help of LPG ,it has given a platform for developing countries to interact with the developed countries and increase thier exports and imports.it has help countries to develop their economy.
Since the 1990’s activists use the word ‘neoliberalism’ for global market-liberalism and for free-trade policies. Neo-liberalism is a set of economic policies that have become widespread during the last 20 years or so. the effects of neo-liberalism here as the rich grow richer and the poor grow poorer….Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank.
Neo-liberalism is which that supports privatization. Deregulation and enhancing the role of private sector in modern society. It creates Laissez-faire atmosphere for economic development.
while in Neo-liberalism, government will be a enable not a doer.
Individuals will be more power full and there will be absence of unnecessary restriction, the control of government will be abolished which is called lean government.
The IMF and the World Bank are institutions in the United Nations system. They share the same goal of raising living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction. The International Monetary Fund and the World Bank were both created at an international conference convened in Bretton Woods, New Hampshire, United States in July 1944. The goal of the conference was to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy.
The IMF promotes international monetary cooperation and provides policy advice and technical assistance to help countries build and maintain strong economies.
The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries reform particular sectors or implement specific projects—for example, building schools and health centers, providing water and electricity, fighting disease, and protecting the environment
The IMF and World Bank also work together to reduce the external debt burdens of the most heavily indebted poor countries. The objective is to help low-income countries achieve their development goals without creating future debt problems.
LPG:
– Excess of consumption and expenditure over revenue resulting in heavy government borrowings.
– Mounting losses of public enterprises.
– Low Foreign exchange reserves.
– Various distortions like poor technological development shortage of foreign exchanges and imprudent borrowings from abroad.
Liberalisation refers to relaxation of previous government restrictions usually in areas of social and economic policies, thus when government liberalise trade it means removal of tariff subsidies and other restrictions on the flow of good and services between countries.
Privatization refers to the transfer of assets or service functions from public to private ownership. It can be achieved by franchising, leasing and contracting. It offers both opportunities and threats to the economy.
Globalization means integrating the domestic economy to the world economy. It involves increasing interactions among national economic system, more integrated financial markets, economies of trade, higher factor mobility, free flow of technology and spread of knowledge throughout the world. Foreign capital will be attracted and updated technology will enter the country.
Liberalisation refers to relaxation of previous government restrictions usually in areas of social and economic policies, thus when government liberalise trade it means removal of tariff subsidies and other restrictions on the flow of good and services between countries.
Privatization refers to the transfer of assets or service functions from public to private ownership. It can be achieved by franchising, leasing and contracting. It offers both opportunities and threats to the economy.
Globalization means integrating the domestic economy to the world economy. It involves increasing interactions among national economic system, more integrated financial markets, economies of trade, higher factor mobility, free flow of technology and spread of knowledge throughout the world. Foreign capital will be attracted and updated technology will enter the country.
Reasons for implementing LPG:
– Excess of consumption and expenditure over revenue resulting in heavy government borrowings.
– Mounting losses of public enterprises.
– Low Foreign exchange reserves.
– Various distortions like poor technological development shortage of foreign exchanges and imprudent borrowings from abroad.
Features of NPM and Public choice theory:
– Administration can be economically driven perspective on the operation of the government.
– It points out that the Administrator is also involved in policy making
– It insists on respect for employees and says that Civil Servants must be loyal to the Constitution and the Law
– Empolyees were given importance and encouraged to think and contribute.