Neoliberal failures and the managerial takeover of governance

The history of neoliberalism is a messy attempt to turn theory into practice. Neoliberals struggled with their plans to implement flagship policies of monetarism, fiscal prudence, and public sector privatisation. Yet, inflation was still cut, welfare slashed, and the public sector ‘marketised’. Existing literature often interprets this as neoliberalism ‘failing-forward’, achieving policy goals by whatever means necessary and at great social cost. Often overlooked in this narrative is how far actually existing neoliberalism strayed from the original designs of public choice theorists and neoliberal ideologues. By examining the history of the Thatcher government's public sector reforms, we demonstrate how neoliberal plans for marketisation ran aground, forcing neoliberal governments to turn to an approach of Managed Competition that owed more to practices of postwar planning born in Cold War US than neoliberal theory. Rather than impose a market-like transformation of the public sector, Managed Competition systematically empowered top managers and turned governance into a managerial process; two developments that ran directly against core precepts of neoliberalism. The history of these early failures and adjustments provides vital insights into the politics of managerial governance in the neoliberal era.

Impact of Fiscal Prudence and Financial Development on Foreign Direct Investment Inflow: Nigerian Evidence

Foreign direct investment in a globalized and information technology driven environment, as we have today in the 21st century, acted as a driver of growth. This paper provides further evidences on macroeconomic management of FDI in emergent economies especially in Africa. The paper empirically measures the effects of fiscal prudence and financial development on foreign direct investment inflow in Nigeria. It tested the importance of household consumption, domestic credit to the private sector, fixed capital formation, domestic savings, external debt, foreign reserve and financial development for the purpose of ensuring FDI inflow in Nigeria. It findings show that domestic credit to private sector, fixed capital formation, foreign reserve and financial development are statistically significant in the case of Nigeria. The econometric methodologies followed for the study are log-linear regressions and ARDL bound testing. Data was sourced from National Bureau of statistics and World Bank’s World Development Index for the period ranging from 1985 to 2018.

FISCAL SUSTAINABILITY AND ECONOMIC GROWTH: A CASE STUDY OF UTTAR PRADESH IN THE 21ST CENTURY

Fiscal sustainability refers to the maintenance of public finances within an affordable and serviceable limit by rationalising debt and deficits within tolerable limits. India, since the time of independence has been taking assistance of debt and deficits to meet its shortages in revenue for the purpose of development and growth. For quite a long time, the concept of fiscal prudence was not given due importance of its role in ensuring long-term sustainable growth. It was only after the major economic crisis of 1990s, that several reforms were initiated targeting at longer duration targets. As a part of series of these reforms, FRBM Act was implemented in 2003 to keep a check on the fiscal indicators of the country especially the revenue deficit, fiscal deficit and debt-GDP ratio to contain the situation of growing fiscal indiscipline. The act was implemented both at the Centre and State level. It has almost been a decade and a half since its implementation. In the course of this duration, some states focused more on the growth parameters while other states focused more on the fiscal sustainability which in turn will initiate growth according to the ideology behind it. The present study specifically makes an analysis of the policies adopted by the state of Uttar Pradesh to establish fiscal sustainability. An investigation has been done to evaluate whether fiscal sustainability measures have adversely affected the growth of the state? The study concludes that although Uttar Pradesh is the most populous and one of the largest state, area wise, it could not create an investment atmosphere for investors due to lack of infrastructure and other facilities because of its focus on fiscal sustainability. KEYWORDS: Fiscal Sustainability, FRBM Act, debt-GSDP ratio, fiscal deficit, interest payments.

Infrastructure Investment in India: Squaring Theory, Data and Common Sense

The study makes a novel attempt to estimate the quantum of funds channelised in the physical infrastructure sector, by the private–public split as well as per project parameters. The study finds a downward trend in the private investment in infrastructure post 2009–2010. This needs to be understood in correspondence with the rise in the number of stalled/shelved projects under private ownership post 2008–2009. This rise in the locked-in finances could explain the disincentive in making fresh investments by the private sector. However, what this data also reveals is that the average per stalled/shelved project cost is higher under public ownership even though the number of such projects isfound higher under private ownership. Lumpy project investments are locked in public projects that can be viewed as a real cost. Fiscal prudence leaves little scope for further extension of finances from the government’s kitty in this domain. Moreover, commercial banks cannot be relied on due to the staggering share of non-performing assets emanating from the over exposure to this sector. A market for long-term debt could be a panacea for the perils facing the sector as well as the stressed banking sector. JEL Codes: E01, E22, E69, G31

Command Agriculture and Food Security: An Interrogation of State Intervention in the Post-Fast Track Land Redistribution Era in Zimbabwe

Command agriculture is a contract farming scheme necessitated by land redistribution that ruptured Zimbabwe’s sources of resilience, distorted credit access, heightened tenure insecurity, and spiked vulnerability to droughts. Using qualitative analysis of extant literature, this article rationalizes the program’s nobility of cause but argues that the program alone cannot revamp agriculture. Notwithstanding how the program has evolved, revamping agriculture also encompasses policies that address fiscal prudence and macroeconomic resilience. Equally important is agricultural training that fosters skills and technologies that are not only climate-responsive but also meet the demands of the constantly evolving agrarian value chain.

Portugal’s stable economic performance should continue

Subject Portugal's economic outlook. Significance Portugal has been one of the best performing euro-area economies since 2016. Last year the economy grew by 2%, while the Bank of Portugal forecasts growth to remain stable at 1.7% in 2020 and 1.6% in 2021. The post-crisis turnaround continues to be powered by strong foreign direct investment (FDI) and exports, including tourism, and boosted by a decline in the real effective exchange rate. Impacts The threat of a global trade war has reduced following the 'phase one' US-China trade deal in January. A likely slowdown in the Spanish economy, Portugal’s largest export market, could weaken Portuguese growth. Portugal’s centre-left government will prioritise fiscal prudence this term, which will likely reduce the spread on bond yields.

Financial Globalization and Economic Growth in South Asia

The article examines relationship between financial globalization and economic growth in South Asian countries namely Bhutan, Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka. Following the framework of Bekaert et al. (2005) and with the help of Panel VAR and Panel causality (in GMM framework) models the study concludes that the causation from financial globalization to growth in the region appears to be weak. There appears reverse causation running from growth to financial globalization. We found that domestic macroeconomic policies such as fiscal prudence act as pull factors for foreign capital. The article has some interesting results at individual country level. JEL: C33, F21, F36, F65