NeoLiberal World Order and Economy of the Developed World

Moreover, political transformations as a result of globalization have caused the reorganization of power from national to international bodies as well as the development of global civil society. Social and cultural transformations are also evident as a result of the integration of different cultures facilitated by technological advances especially in communication as well as improved transport linkages globally (Gaddis Hurrell2003).With increased globalization, the global political economy developed as a multifaceted field focused on international trade, finance, and economic policies of various nation-states affecting international trade and production. Neo-liberalism fails to take into consideration the distributive facets of economic development, environmental integrity, employment creation, and social well-being (equity and justice) among other aspects ‘collective social good’, which was the concern of the welfare state. Consequently, it has encouraged denationalization, deregulation, and haphazard opening of markets as a solution for many of the troubled Third World economies.According to Yovanovich (2003), neo-liberalism can be considered as a flawed social and moral philosophy aimed at promoting the accumulation of wealth among developed economies at the expense of developing nations. The neo-liberal perspective generates the notion that poor Third World countries can only accomplish their economic development goals through integrating economic policies, for instance, liberalization in their systems. This would consequently uplift them from perpetual poverty and enhance the standards of living for their populace. However, Foot et al. (2003) observe that liberalization would essentially damage the Third World countries with slumps in economic growth, escalation of interest rates as well as the intensification of income inequality. The difference between the average incomes of the ten richest and ten poorest countries doubled between 1980 and 1999.

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