(left) and
Margaret Thatcher (right) were responsible for the popularisation of Neoliberalism. For decades after the formation of the
Mont Pelerin Society, the ideas of the society would remain largely on the fringes of political policy, confined to a number of think-tanks and universities and achieving only measured success with the
ordoliberals in
Germany, who maintained the need for strong state influence in the economy. It would not be until a succession of economic downturns and crises in the 1970s that neoliberal policy proposals would be widely implemented. By this time, neoliberal thought had evolved. The early neoliberal ideas of the Mont Pelerin Society had sought to chart a middle way between the trend of increasing government intervention implemented after the
Great Depression and the
laissez-faire economics many in the society believed had produced the Great Depression.
Milton Friedman, wrote in his early essay "Neo-liberalism and Its Prospects" that "Neo-liberalism would accept the nineteenth-century liberal emphasis on the fundamental importance of the individual, but it would substitute for the nineteenth century goal of
laissez-faire as a means to this end, the goal of the competitive order", which requires limited state intervention to "police the system, establish conditions favorable to competition and
prevent monopoly, provide a stable
monetary framework, and relieve acute misery and distress." By the 1970s, neoliberal thought—including Friedman's—focused almost exclusively on
market liberalization and was adamant in its opposition to nearly all forms of state interference in the economy. One of the earliest and most influential turns to neoliberal reform occurred in
Chile after an economic crisis in the early 1970s. After several years of
socialist economic policies under president
Salvador Allende, a
1973 coup d'état instigated by the United States to protect corporate from labor movements and socialist reforms by Allende which established a
military junta under dictator
Augusto Pinochet, led to the implementation of a number of sweeping neoliberal economic reforms that had been proposed by the
Chicago Boys, a group of Chilean economists educated under
Milton Friedman. This "neoliberal project" served as "the first experiment with neoliberal state formation" and provided an example for neoliberal reforms elsewhere. Beginning in the early 1980s, the
Reagan administration and
Thatcher government implemented a series of neoliberal economic reforms to counter the chronic
stagflation the
United States and
United Kingdom had each experienced throughout the 1970s. Neoliberal policies continued to dominate American and British politics until the
Great Recession. Following British and American reform, neoliberal policies were exported abroad, with countries in
Latin America, the
Asia-Pacific, the
Middle East, and
China implementing significant neoliberal reform. Additionally, the
International Monetary Fund and
World Bank encouraged neoliberal reforms in many
developing countries by placing reform requirements on loans, in a process known as
structural adjustment.
Germany Neoliberal ideas were first implemented in
West Germany. The economists around
Ludwig Erhard drew on the theories they had developed in the 1930s and 1940s and contributed to West Germany's reconstruction after the Second World War. Erhard was a member of the Mont Pelerin Society and in constant contact with other neoliberals. He pointed out that he is commonly classified as neoliberal and that he accepted this classification. The
ordoliberal Freiburg School was more pragmatic. The German neoliberals accepted the classical liberal notion that competition drives economic prosperity. However, they argued that a
laissez-faire state policy stifles competition, as the strong devour the weak since monopolies and cartels could pose a threat to freedom of competition. They supported the creation of a well-developed legal system and capable regulatory apparatus. While still opposed to full-scale
Keynesian employment policies or an extensive
welfare state, German neoliberal theory was marked by the willingness to place
humanistic and social values on par with economic efficiency.
Alfred Müller-Armack coined the phrase "social market economy" to emphasize the
egalitarian and humanistic bent of the idea. According to Boas and Gans-Morse,
Walter Eucken stated that "social security and social justice are the greatest concerns of our time". , 1952 Erhard emphasized that the market was inherently social and did not need to be made so. He hoped that growing prosperity would enable the population to manage much of their social security by self-reliance and end the necessity for a widespread welfare state. By the name of
Volkskapitalismus, there were some efforts to foster private savings. Although average contributions to the public old age insurance were quite small, it remained by far the most important old age income source for a majority of the German population, therefore despite liberal rhetoric the 1950s witnessed what has been called a "reluctant expansion of the welfare state". To end widespread poverty among the elderly the pension reform of 1957 brought a significant extension of the German welfare state which already had been established under
Otto von Bismarck. Rüstow, who had coined the label "neoliberalism", criticized that development tendency and pressed for a more limited welfare program. Hayek did not like the expression "social market economy" but stated in 1976 that some of his friends in Germany had succeeded in implementing the sort of social order for which he was pleading while using that phrase. In Hayek's view, the social market economy's aiming for both a market economy and
social justice was a muddle of inconsistent aims. Despite his controversies with the German neoliberals at the Mont Pelerin Society,
Ludwig von Mises stated that Erhard and Müller-Armack accomplished a great act of liberalism to restore the German economy and called this "a lesson for the US". According to different research Mises believed that the ordoliberals were hardly better than socialists. As an answer to Hans Hellwig's complaints about the interventionist excesses of the Erhard ministry and the ordoliberals, Mises wrote: "I have no illusions about the true character of the politics and politicians of the social market economy". According to Mises, Erhard's teacher
Franz Oppenheimer "taught more or less the
New Frontier line of"
President Kennedy's "Harvard consultants (
Schlesinger,
Galbraith, etc.)". In Germany, neoliberalism at first was synonymous with both ordoliberalism and social market economy. But over time the original term neoliberalism gradually disappeared since social market economy was a much more positive term and fit better into the (economic miracle) mentality of the 1950s and 1960s.
Latin America In the 1980s, numerous governments in Latin America adopted neoliberal policies.
Chile Chile was among the earliest nations to implement neoliberal reform.
Marxist economic geographer
David Harvey has described the substantial neoliberal reforms in Chile beginning in the 1970s as "the first experiment with neoliberal state formation", which would provide "helpful evidence to support the subsequent turn to neoliberalism in both Britain... and the United States." Similarly,
Vincent Bevins says that Chile under
Augusto Pinochet "became the world's first test case for 'neoliberal' economics." The turn to neoliberal policies in Chile originated with the
Chicago Boys, a select group of Chilean students who, beginning in 1955, were invited to the
University of Chicago to pursue postgraduate studies in economics. They studied directly under
Milton Friedman and his disciple,
Arnold Harberger, and were exposed to
Friedrich Hayek. Upon their return to Chile, their neoliberal policy proposals—which centered on widespread
deregulation,
privatization, reductions to government spending to counter high inflation, and other free-market policies—would remain largely on the fringes of Chilean economic and political thought for a number of years, as the
presidency of Salvador Allende (1970–1973) brought about a
socialist reorientation of the economy. (1971–2007) During the Allende presidency, Chile experienced a severe economic crisis, in which inflation peaked near 150%. Following an extended period of social unrest and political tension, as well as diplomatic, economic, and covert pressure from the
United States, the Chilean armed forces and national police overthrew the Allende government in a
coup d'état. They established a repressive
military junta, known for its violent
suppression of opposition, and appointed army chief Augusto Pinochet Supreme Head of the nation. His rule was later given legal legitimacy through a controversial
1980 plebiscite, which approved a new
constitution drafted by a government-appointed commission that ensured Pinochet would remain as president for a further eight years—with increased powers—after which he would face a re-election referendum. The Chicago Boys were given significant political influence within the
military dictatorship, and they implemented
sweeping economic reform. In contrast to the extensive
nationalization and centrally planned economic programs supported by Allende, the Chicago Boys implemented rapid and extensive privatization of state enterprises, deregulation, and significant reductions in trade barriers during the latter half of the 1970s. In 1978, policies that would further reduce the role of the state and infuse competition and individualism into areas such as labor relations, pensions, health and education were introduced. Additionally, the central bank raised interest rates from 49.9% to 178% to counter high inflation. of economic policy in 1983 following
the economic crisis These policies amounted to a
shock therapy, which rapidly transformed Chile from an economy with a protected market and strong government intervention into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions. Inflation was tempered, falling from over 600% in 1974, to below 50% by 1979, to below 10% right before the
economic crisis of 1982; GDP growth spiked (see chart) to 10%. however, inequality widened as wages and benefits to the working class were reduced. In 1982, Chile again experienced a
severe economic recession. The cause of this is contested but most scholars believe the
Latin American debt crisis—which swept nearly all of Latin America into financial crisis—was a primary cause. Some scholars argue the neoliberal policies of the Chicago boys heightened the crisis (for instance, percent GDP decrease was higher than in any other Latin American country) or even caused it; After the recession, Chilean economic growth rose quickly, eventually hovering between 5% and 10% and significantly outpacing the Latin American average (see chart). Additionally, unemployment decreased and the percent of the population below the poverty line declined from 50% in 1984 to 34% by 1989. This led
Milton Friedman to call the period the "
Miracle of Chile", and he attributed the successes to the neoliberal policies of the Chicago boys. Some scholars attribute the successes to the re-regulation of the banking industry and a number of targeted social programs designed to alleviate poverty. According to Chilean economist
Alejandro Foxley, when Pinochet finished his 17-year term by 1990, around 44% of Chilean families were living below the poverty line. Despite years of suppression by the Pinochet junta, a presidential election was held in 1988, as dictated by the 1980 constitution (though not without Pinochet first holding another plebiscite in an attempt to amend the constitution). argued that the increased economic freedom he believed the neoliberal reforms had brought had put pressure on the dictatorship over time, resulting in a gradual increase in political freedom and, ultimately, the restoration of democracy. The Chilean scholars Javier Martínez and Alvaro Díaz reject this argument, pointing to the long tradition of democracy in Chile. They assert that the defeat of the Pinochet regime and the return of democracy came primarily from large-scale mass rebellion that eventually forced party
elites to use existing institutional mechanisms to restore democracy. In the 1990s, neoliberal economic policies broadened and deepened, including unilateral tariff reductions and the adoption of free trade agreements with a number of Latin American countries and Canada. At the same time, the decade brought increases in government expenditure on social programs to tackle poverty and poor quality housing. Throughout the 1990s, Chile maintained high growth, averaging 7.3% from 1990 to 1998. In sum, the neoliberal policies of the 1980s and 1990s—initiated by a repressive
authoritarian government—transformed the Chilean economy from a
protected market with high
barriers to trade and hefty
government intervention into one of the world's most
open free-market economies. Average annual economic growth from the mid-1980s to the Asian crisis in 1997 was 7.2%, 3.5% between 1998 and 2005, and growth in per capita real income from 1985 to 1996 averaged 5%—all outpacing Latin American averages. Inflation was brought under control. the lowest in Latin America. Unemployment from 1980 to 1990 decreased, but remained higher than the South American average (which was stagnant). And despite public perception among Chileans that economic inequality has increased, Chile's
Gini coefficient has in fact dropped from 56.2 in 1987 to 46.6 in 2017. While this is near the Latin American average, Chile still has one of the highest Gini coefficients in the
OECD, an organization of mostly
developed countries that includes Chile but not most other Latin American countries. Furthermore, the Gini coefficient measures only
income inequality; Chile has more mixed inequality ratings in the OECD's
Better Life Index, which includes indexes for more factors than only income, like
housing and
education. at the same time government budgets for education, health and housing dropped by over 20% on average. The era was also marked by economic instability. Overall, scholars have mixed opinions on the effects of the neoliberal reforms. The
CIA World Factbook states that Chile's "sound economic policies", maintained consistently since the 1980s, "have contributed to steady economic growth in Chile and have more than halved poverty rates," and some scholars have even called the period the "
Miracle of Chile". Other scholars have called it a failure that led to extreme inequalities in the distribution of income and resulted in severe socioeconomic damage. As a response to the
2019–20 Chilean protests, a
national plebiscite was held in October 2020 to decide whether the
Chilean constitution would be rewritten. The "approve" option for a new constitution to replace the Pinochet-era constitution, which entrenched certain neoliberal principles into the country's basic law, won with 78% of the vote. However, in
September 2022, the referendum to approve the rewritten constitution was rejected with 61% of the vote.
Peru Peruvian economist
Hernando de Soto, the founder of one of the first neoliberal organizations in Latin America,
Institute for Liberty and Democracy (ILD), began to receive assistance from
Ronald Reagan's administration, with the
National Endowment for Democracy's Center for International Private Enterprise (CIPE) providing his ILD with funding. The economic policy of
President Alan García distanced Peru from international markets, resulting in lower foreign investment in the country. Under García, Peru experienced
hyperinflation and increased confrontations with the guerrilla group
Shining Path, leading the country towards high levels of instability. The Peruvian armed forces grew frustrated with the inability of the García administration to handle the nation's crises and began to draft an operation –
Plan Verde – to overthrow his government. Peruvian magazine
Oiga reported that, following the election, the armed forces were unsure of Fujimori's willingness to fulfill the plan's objectives, though they planned to convince Fujimori to agree to the operation prior to his inauguration. After taking office, Fujimori abandoned his campaign's economic platform, adopting more aggressive neoliberal policies than those espoused by his election competitor Vargas Llosa. With Fujimori's compliance, plans for a coup as designed in Plan Verde were prepared for two years and finally executed during the
1992 Peruvian coup d'état, which ultimately established a civilian-military regime. De Soto proved to be influential to Fujimori, who began to repeat de Soto's advocacy for deregulating the Peruvian economy. Under Fujimori, de Soto served as "the President's personal representative", with
The New York Times describing de Soto as an "overseas salesman", while others dubbed de Soto as the "informal president" for Fujimori. Fujimori and de Soto would ultimately break their ties after de Soto recommended increased involvement of citizens within the government, which was received with disapproval by Fujimori. USAID would go on to assist the Fujimori government with rewriting the 1993 Peruvian constitution, with the agency concluding in 1997 that it helped with the "preparation of legislative texts" and "contributed to the emergence of a private sector advisory role". According to the
Foundation for Economic Education, USAID, the
United Nations Population Fund (UNFPA) and the
Nippon Foundation also supported the sterilization efforts of the Fujimori government. E. Liagin reported that from 1993 to 1998, USAID "basically took charge of the national health system of Peru" during the period of forced sterilizations. Though economic statistics show improved economic data in Peru in recent decades, the wealth earned between 1990 and 2020 was not distributed throughout the country; living standards showed disparities between the more-developed capital city of Lima and similar coastal regions while rural provinces remained impoverished. Sociologist Maritza Paredes of the
Pontifical Catholic University of Peru stated, "People see that all the natural resources are in the countryside but all the benefits are concentrated in Lima."
Argentina In the 1960s,
Latin American intellectuals began to notice the ideas of
ordoliberalism; they often used the Spanish term "neoliberalismo" to refer to this school of thought. They were particularly impressed by the
social market economy and the
Wirtschaftswunder ("economic miracle") in Germany and speculated about the possibility of accomplishing similar policies in their own countries. Neoliberalism in 1960s Argentina meant a philosophy that was more moderate than entirely
Laissez-faire free-market capitalism and favored using state policy to temper
social inequality and counter a tendency towards monopoly. In 1976, the
military dictatorship's economic plan led by
José Alfredo Martínez de Hoz was the first attempt at establishing a neoliberal program in Argentina. They implemented a fiscal
austerity plan that reduced money printing in an attempt to counter inflation. In order to achieve this, salaries were frozen; however, they were unable to reduce inflation, which led to a drop in the real salary of the working class. They also liberalized trade policy so that foreign goods could freely enter the country. Argentina's industry, which had been on the rise for 20 years after the economic policies of former president
Arturo Frondizi, rapidly declined as it was not able to compete with foreign goods. Following the measures, there was an increase in poverty from 9% in 1975 to 40% at the end of 1982. Public perception of the policies was mixed; while some of the privatization was welcomed, much of it was criticized for not being in the people's best interests. Protests resulted in the death of 29 people at the hands of police.
Mexico Along with many other Latin American countries in the early 1980s,
Mexico experienced a
debt crisis. In 1983 the Mexican government ruled by the
PRI, the Institutional Revolutionary Party,
accepted loans from the IMF. Among the conditions set by the IMF were requirements for Mexico to privatize state-run industries,
devalue their currency, decrease
trade barriers, and restrict governmental spending. These policies were aimed at stabilizing Mexico's economy in the short run. Later, Mexico tried to expand these policies to encourage growth and
foreign direct investment (FDI). The decision to accept the IMF's neoliberal reforms split the PRI between those on the right who wanted to implement neoliberal policies and those the left who did not.
Carlos Salinas de Gortari, who took power in 1988, doubled down on neoliberal reforms. His policies opened up the financial sector by deregulating the banking system and privatizing commercial banks. Among their demands were rights for indigenous Mexicans as well as opposition to the
North American Free Trade Agreement (NAFTA), which solidified a strategic alliance between state and business. NAFTA, a trade agreement between the
United States,
Canada, and Mexico, significantly aided in Mexico's efforts to liberalize trade. In 1994, the same year of the Zapatista rebellion and the enactment of NAFTA, Mexico faced a
financial crisis. The crisis, also known as the "Tequila Crisis" began in December 1994 with the devaluation of the peso. When investors' doubts led to negative speculation they fled with their capital. The central bank was forced to raise
interest rates which in turn collapsed the banking system as borrowers could no longer pay back their loans.
United Kingdom During her tenure as
Conservative Prime Minister from 1979 to 1990,
Margaret Thatcher oversaw a number of neoliberal policies, including
tax reduction,
exchange rate reform,
deregulation, and
privatisation. These policies were continued and supported by her successor
John Major. Although opposed by the
Labour Party, the policies were, according to some scholars, largely accepted and left unaltered when Labour returned to power in 1997 during the
New Labour era under
Tony Blair. The
Adam Smith Institute, a United Kingdom–based free-market think tank and lobbying group formed in 1977 which was a major driver of the aforementioned neoliberal policies, officially changed its libertarian label to neoliberal in October 2016. According to economists Denzau and Roy, the "shift from Keynesian ideas toward neoliberalism influenced the fiscal policy strategies of New Democrats and New Labour in both the White House and Whitehall.... Reagan, Thatcher, Clinton, and Blair all adopted broadly similar neoliberal beliefs."
United States While a number of recent histories of neoliberalism in the United States have traced its origins back to the urban renewal policies of the 1950s,
Marxist economic geographer
David Harvey argues the rise of neoliberal policies in the United States occurred during the
1970s energy crisis; Early roots of neoliberalism were laid in the 1970s during the
Nixon administration, with appointment of associates of
Milton Friedman to Departments of Treasury, Agriculture and Justice, and the Council of Economic Advisors and encouraged funding of the
American Enterprise Institute and defunding of the more centrist
Brookings Institution, Neoliberal policies were expanded during the
Carter administration (1977-1981). This included deregulation of the
trucking, banking and
airline industries, the appointment of
Paul Volcker to chairman of the
Federal Reserve as well as increased military spending at the end of his term leading to fiscal austerity in US nonmilitary budget diverting funds away from social programs. The
Clinton administration (1993-2001) embraced neoliberalism Neoliberal policies included the passage of the
North American Free Trade Agreement (NAFTA), continuing the deregulation of the financial sector through passage of the
Commodity Futures Modernization Act and the repeal of the
Glass–Steagall Act and implementing cuts to the
welfare state through passage of the
Personal Responsibility and Work Opportunity Act. The American historian
Gary Gerstle writes that while Reagan was the ideological architect of the neoliberal order which was formulated in the 1970s and 1980s, it was Clinton who was its key facilitator, and as such this order achieved dominance in the 1990s and early 2000s. The neoliberalism of the Clinton administration differs from that of Reagan as the Clinton administration purged neoliberalism of
neoconservative positions on
militarism, family values, opposition to
multiculturalism and neglect of ecological issues. Writing in
New York, journalist
Jonathan Chait disputed accusations that the
Democratic Party had been hijacked by neoliberals, saying that its policies have largely stayed the same since the New Deal. Instead, Chait suggested these accusations arose from arguments that presented a
false dichotomy between free-market economics and socialism, ignoring mixed economies. American feminist philosopher
Nancy Fraser says the modern Democratic Party has embraced a "progressive neoliberalism", which she describes as a "progressive-neoliberal alliance of financialization plus emancipation". Historian
Walter Scheidel says that both parties shifted to promote free-market capitalism in the 1970s, with the Democratic Party being "instrumental in implementing financial deregulation in the 1990s". Historians
Andrew Diamond and
Thomas Sugrue argue that neoliberalism became a "'dominant rationality' precisely because it could not be confined to a single partisan identity." Economic and political inequalities in schools, universities, and libraries and an undermining of democratic and civil society institutions influenced by neoliberalism has been explored by Buschman.
Asia-Pacific Scholars who emphasized the key role of the developmental state in the early period of fast industrialization in East Asia in the late 19th century now argue that South Korea, Taiwan and Singapore have transformed from developmental to close-to-neoliberal states. Their arguments are matter of scholarly debate.
China Following the death of
Mao Zedong in 1976,
Deng Xiaoping led the country through the
reform and opening up, with the slogan of
Xiǎokāng, that combined neoliberalism with centralized
authoritarianism. These focused on agriculture, industry, education and science/defense. Experts debate the extent to which traditional Maoist communist doctrines have been transformed to incorporate the new neoliberal ideas. In any case, the Chinese Communist Party remains a dominant force in setting economic and business policies. Throughout the 20th century, Hong Kong was the outstanding neoliberal exemplar inside China.
Taiwan Taiwan exemplifies the impact of neoliberal ideas. The policies were pushed by the United States but were not implemented in response to a failure of the national economy, as in numerous other countries.
Japan Neoliberal policies were at the core of the leading party in Japan, the
Liberal Democratic Party (LDP), after 1980. These policies had the effect of abandoning the traditional rural base and emphasizing the central importance of the Tokyo industrial-economic region. Neoliberal proposals for Japan's agricultural sector called for reducing state intervention, ending the protection of high prices for rice and other farm products, and exposing farmers to the global market. The 1993
Uruguay Round of the
General Agreement on Tariffs and Trade negotiations opened up the rice market. Neoconservative leaders called for the enlargement, diversification, intensification, and corporatization of the farms receiving government subsidies. In 2006, the ruling LDP decided to no longer protect small farmers with subsidies. Small operators saw this as favoritism towards big corporate agriculture and reacted politically by supporting the
Democratic Party of Japan (DPJ), helping to defeat the LDP in nationwide elections.
South Korea In South Korea, neoliberalism had the effect of strengthening the national government's control over economic policies. These policies were popular to the extent that they weakened the historically very powerful
chaebol family-owned conglomerates.
India In India, Prime Minister
Narendra Modi took office in 2014 with a commitment to implement neoliberal economic policies. This commitment would shape national politics and foreign affairs and put India in a race with China and Japan for economic supremacy in East Asia.
Australia In Australia, neoliberal economic policies (known at the time as "
economic rationalism" or "economic fundamentalism") have been embraced by governments of both the
Labor Party and the
Liberal Party since the 1980s. The Labor governments of
Bob Hawke and
Paul Keating from 1983 to 1996 pursued a program of economic reform focused on
economic liberalisation. These governments privatised government corporations, deregulated factor markets, floated the
Australian dollar and reduced trade protections. Another key policy was
the accords which was an agreement with unions to agree to a reduction in strikes, wage demands and a real wage cut in exchange for the implementation of social policies, such as
Medicare and
superannuation. The
Howard government continued these policies, whilst also acting to reduce union power, cut welfare and reduce government spending. Keating, building on policies he had introduced while federal treasurer, implemented a compulsory
superannuation guarantee system in 1992 to increase
national savings and reduce future government liability for old age pensions. The financing of universities was deregulated, requiring students to contribute to
university fees through a repayable loan system known as the
Higher Education Contribution Scheme (HECS) and encouraging universities to increase income by admitting full-fee-paying students, including foreign students. The admission of domestic full-fee-paying students to public universities was abolished in 2009 by the
Rudd Labor government. Immigration to the mainland capitals by refugees have seen capital flows follow soon after, such as from war-torn
Lebanon and
Vietnam. Later economic migrants from mainland
China also, up to recent restrictions, had invested significantly in the property markets.
New Zealand In New Zealand, neoliberal economic policies were implemented under the
Fourth Labour Government led by Prime Minister
David Lange. These neoliberal policies are commonly referred to as
Rogernomics, a portmanteau of "Roger" and "economics", after Lange appointed
Roger Douglas minister of finance in 1984. Lange's government had inherited a severe balance of payments crisis as a result of the deficits from the previously implemented two-year freeze on wages and prices by preceding Prime Minister
Robert Muldoon, who had also maintained an
exchange rate many economists now believe was unsustainable. The inherited economic conditions lead Lange to remark "We ended up being run very similarly to a Polish shipyard." On 14 September 1984, Lange's government held an Economic Summit to discuss the underlying problems with
New Zealand's economy, which lead to calls for dramatic economic reforms previously proposed by the
Treasury Department. A reform program consisting of
deregulation and the removal of
tariffs and
subsidies was put in place. This had an immediate effect on
New Zealand's agricultural community, who were hit hard by the loss of subsidies to farmers. A superannuation surcharge was introduced, despite having promised not to reduce
superannuation, resulting in
Labour losing support from the elderly. The financial markets were also deregulated, removing restrictions on
interests rates, lending and foreign exchange. In March 1985, the New Zealand dollar was
floated. Additionally, a number of government departments were converted into state-owned enterprises, which lead to significant job losses: 3,000 within the Electricity Corporation; 4,000 within the Coal Corporation; 5,000 within the Forestry Corporation; and 8,000 within the New Zealand Post.
Middle East Beginning in the late 1960s, a number of neoliberal reforms were implemented in the Middle East. For instance,
Egypt is frequently linked to the implementation of neoliberal policies, particularly with regard to the 'open-door' policies of President
Anwar Sadat throughout the 1970s, and
Hosni Mubarak's successive economic reforms between 1981 and 2011. These measures, known as
al-Infitah, were later diffused across the region. In Tunisia, neoliberal economic policies are associated with former president and
de facto dictator
Zine El Abidine Ben Ali; his reign made it clear that economic neoliberalism can coexist and even be encouraged by
authoritarian states. Responses to globalisation and economic reforms in the
Gulf have also been approached via a neoliberal analytical framework.
International organizations The adoption of neoliberal policies in the 1980s by international institutions such as the
International Monetary Fund (IMF) and the
World Bank had a significant impact on the spread of neoliberal reform worldwide. To obtain loans from these institutions, developing or crisis-wracked countries had to agree to institutional reforms, including
privatization,
trade liberalization, enforcement of strong
private property rights, and reductions to
government spending. This process became known as
structural adjustment, and the principles underpinning it the
Washington Consensus.
European Union The
European Union (EU), created in 1992, is sometimes considered a neoliberal organization, as it facilitates
free trade and
freedom of movement, erodes national
protectionism and limits national
subsidies. Others underline that the EU is not completely neoliberal as it leaves the development of
welfare policies to its constituent states. == Traditions ==