The developmental agenda in the age of neoliberal globalization

This article finds that:

• a consequence of globalisation has been the exposure of economies to speculative short term capital movements (hot money) which have increased financial instability and resulted in a series of financial crises in the developing countries
• indigenous economies with weak financial structures and shallow markets have suffered from increased volatility of output growth, short-sightedness of entrepreneurial decisions, and the overall marginalization of labor markets
• the new wave of globalization led by open capital markets and unfettered financial flows constrain the developmental states in pursuing strategic industrialization and development targets
• financial deregulation and capital account liberalization appear to be the best predictor of crises in developing countries
• the free movement of short term capital flows is held responsible for depriving the governments from the classic tools of austerity and has set the stage for full-fledged financial crises
• the primary basic remedy for attaining sustained development lies in regulating short-term international flows, and highlight once again the now classic dictum due to Keynes, “above all, let finance be primarily national”