Globalization: How does it challenge traditional Theories in International Relations (IR) ?

The author: Ranganai Moyo

The concept and phenomenon of globalization has been there for some time and it dates back to Adam smith and Ricardo `s theory of absolute and comparative advantage which was based on free trade and specialization. Ricardo argues that nations should specialize on goods and service which they have comparative advantage and the main perception of specialization was to enable trade among countries. Therefore, globalization can be viewed as processes which involve the integration of social, economic and political activities across national boundaries. It is also characterized by the growing and intensity of global relations among nations and processes of innovations within the international systems to enable humanity and businesses overcome distance and barriers.Globalization is evidenced by speedy of global capital flows, cultural exchanges and integrations of global financial systems an all these allow investments to spread across national boundaries. Though, globalization has encouraged economic and social exchange of goods and service across national frontiers, it also brought some concerns among the peripheral of the world especial the poor nations of the global south. The main catalysts of globalization are neoliberal advocates (the capitalist West) who are also the largest shareholders in IMF and the World Bank dictate their policies to third world countries these institutions.Therefore, the  report examine the role of neoclassical ideology in advancing globalization and its implications on traditional theories in international relations.

However, it might be of interest to first understand why neoliberals support the spread of capitalism worldwide as a model for peace and security. There was a general consensus among neoliberals that the mushrooming of various organisations diminished the contention which put the state as the only actor in international relations. In addition to that, prevailing wisdom of the post-war period believed that the economic collapse and world recession of the 1930s created unstable environment which gave rise to extreme nationalists (Steans and Pettiford, 2005). So the emergences of nationalist ideologies were associated with self-interest instead of protecting international order and security. For example trade between communist states and the free world was virtual impossible due to excessive regulation preventing exchange of goods and services across the two worlds. Moreover, countries imposed barriers to safeguard domestic markets from foreign rivals and to protect balance of payments positions by restricting imports. It was general believed among neoliberal supporters that, such state self-interest of protectionism had knock-on effects on the global economy as such, the Bretton Woods were designed to make it more difficult for states to act in a self-interest way (Steans and Pettiford, 2005). Therefore, it can be argued that up to the late 1960s realists were the dominant force in International relations but, the resurgence neo-liberalism in the early 1970s self-interest began to weaken.

The catalysts of globalization can be traced back to the 1940s at Bretton Woods Conference which established institutions that were to play a major role in the international system. The Bretton Wood System consists of International Monetary Fund (IMF), the World Bank and the World trade Organization and was a brainchild of the neoliberal ideas. The role of the World Bank was to deal with reconstruction of the world economy after it was destroyed by the two wars and the World Trade Organization was to encourage free trade among nations. Furthermore, the IMF`s key responsibilities in the international system was to provide budgetary and balance of payment support as well as monitoring services of world economy. However, the role of these institutions particularly the World Bank and IMF evolved over time and by the 1970s, these financial institutions were to compliment neoliberal ideas in their policy framework. There is a tradition belief among neo-liberals that free market economy enables democratic freedom to prosper and ensures optimum economic performance with regards to efficiency, economic growth and technological progress, Kotz, (2002). This is largely because under a free market economy the state has a limited role as it is characterised by a set of economic policies centred on privatization and deregulation. In international spheres neoliberals are advocating for free movement of goods, services and capital among other across national boundaries. In other words by advancing capitalism, neoliberal supporters want a borderless world with limited or no regulation as such, it appears as though neoliberal ideas shaped the foundations of globalization. So by 1980s the world was increasingly becoming borderless as multinational companies compete for market opportunities worldwide.

The policy frameworks within the neoliberal school of thought provided opportunities for multination corporations to expand their operations to overseas markets as many countries began to subscribe to free market ideologies. Apart from that, the United States and other capitalist countries were successful in advancing neoliberal policies to the peripherals through IMF and the World Bank, Kotz, (2002). As a result, global investments rose sharply from about $60 billion in the begging of the 1980s to $651 billion by year 2002, Alsan, Bloom, Canning, (2006). This was largely due to increase in international capital mobility driven by multinational corporations’ expansions across national boundaries. Multinational enterprises play a critical role in globalization, since their activities in the host country may promote social and cultural changes world wide. Empirical evidence by Ruhul, Salim, and Bloch, (2009) indicate that there is a positive relation between globalization and technological progress in Indonesian pharmaceutical sectors. The positive relation was attributed through spillover effects as foreign firms tend to bring capital intense goods to the host markets which require minimum level of training and skills attainments. Since many third world countries experience acute shortage of technological advances  globalization is likely to benefit countries in need. In addition to that, globalisation can facilitate the spread of information and communication among different societies scattered worldwide. For example, Leider`s study in, (2010) indicate that globalization enables the spread of information and communications within the global among system. This is very important especially to countries with limited resources to access world events, so globalizations allow information and ideas be transmitted easily and cheaply across national boundaries. Therefore, the spread of advanced technology facilitate the emergence of social media such as twitter, Skype and face book which are increasing uniting the world together.

The last three decades have witnessed the diminishing of autocratic system of governance around the world as more countries continue to embrace democratically elected national administration. The prominence of democracy chiefly in former communist states might have been triggered by the continuation of stateless world; as such globalizations enabled citizens commence wider demands from their governments. For example ,the open up of countries’ economies and emergence of the worldwide web in the 1980s allowed citizens to access some of competitive opportunities which were only accessible in advanced economies. A study by Vu, (2011) found that technological progress improves broad-based human capital skills and consumer sophistication and this might explain why the China decided to partial respond to student protests in 1979 and also the collapse of the Soviet Union in 1989.It look like globalization has positive effects on human aspiration because of the numerous opportunities it bring to the global community. Besides that, globalisation may improve the country`s export capability through especially if the transnational national enterprises decide to set up production facilities in the country. For example china enjoys economic prosperity as she runs a huge balance of payment surplus because most FDI operations there are destined for the exports. In this regards, globalization is of significant benefits to countries as it bring nations together.    

Globalization in relations to IR theories

The mechanism of the neoliberal ideology made important contributions to international relations discourse; particularly in the areas of human rights, democratization and governance among others. This is largely because supporters of neoliberal views believed that free market approach would enable states to act on mutual interest rather than acting on their own as perceived by realists. In addition to that was a rapid increase of Non-Governmental Organizations (NGOs) from less than 1000 NGOs in the bigging of the 1940s to nearly 5000 by year 2000 (Steans and Pettiford, 2005). This prompted neoliberal followers to conclude that the state was no longer the only key actor international relations but even non-states organization had a vital role securing the balance of power. However, realists would argue that even if the presences of other actors are be considered countries always act in self-interests so the mushrooming of organizations in international arena does not guarantee world peace. So globalization threatens world peace and security because too many actors are advancing their own self-interest rather than promoting a peaceful world. On the other hand Marxists advocates do contend that globalization is taking place and it is driven by powerful capitalist to increase their monopolistic towards the world`s poor countries. In addition to that, Marxists would argue that rapidly increase of various actors such as the World, IMF and NGOs are there to protect neo-imperialist seeking to control the world`s political and economic system. In this regard, the concerts of globalization appear to have mixed reactions within the international relations discourse. Neoliberals are more optimistic about the prospects of peace and security through global integration because this will enable dialogue among member states, however their views are different from realists who argues that despite all the efforts to bring nations together, countries will always act in self-interest as such anarchy will continue to exist. Marxists would argue that, globalization is just another form of imperialism driven actors within the capitalist world seeking to increase their wealth base on the expense of the poor world. As a result of that, globalization is likely to instigate future conflicts which might destabilize global peace and security if citizens decide to revolt against capitalism.

Conclusion

There is no doubt that the processes of globalization continue to redefine the world systems as it enable global citizens to acquire various opportunities and share across national frontiers. The perceived marginal benefit of globalization and the pressure on governments has witnessed a change of national policies towards deregulations and privatization these policy frameworks are the main apparatus to global integration because it encourages competition.  As such economic and social aspects are now transmitted across national boundaries, economic walls are falling, citizens are able to access different opportunities and be able to share worldwide without any form of restrictions. Autocratic leadership gradually diminishing and democratic principles are emerging even in those countries within the peripherals which were reluctant to adopt those values; globalization empowers citizens to demand from their government how they want to be governed. In light of this, the process of globalization is inevitable, given that there has been a rapid growth of actors within the international arena, national and global governance is evolving to accommodate the changing nature of the international system. Having said that, I have come to the conclusion that globalization has some positive impact on global peace and security as it bring states together which in turn reduce the level of anarchy the main cause for conflict according to Realists. 

Reference

Steans, J and Pettiford.L, (2005), Liberalism: Introduction to International Relations Perspectives and Themes, 2^nd edn, pge.21-47: Pearson Education, UK.

Kotz.D.M, (2002), Globalization and Neoliberalism, Rethinking Marxism 12, (2),pge64-79,U.S.A.

Alsan.M,Bloom,D.E and Canning.D ,(2006) The effects  of  Population Health on Foreign direct Investment inflows to Low-and Middle-Income Countries: World Development,34(4),pge.617-630,Elsevier Ltd.

Ruhul .S, Salim.A and Bloch.H, (2009) Does Foreign Direct Investment Lead to Productivity Spillovers: World Development, xx (x), pge.xxx-xxx, Elsevier Ltd.

Cheung, K and Lin.P, (2003), Spillover effects of FDI on innovation in China: Evidence from the provincial data, China Economic Review, 15(2004), pge.25-44, North-Holland.

Evaluate the impact of aid on economic growth.

Evaluate the impact of aid on economic growth.

The relationship between aid and economic growth is increasingly attracting so much literature in recent years. The last three decades witnessed a dramatic growth in aid inflows to Less Developed Countries (LDCs) as advanced economies continue to extend assistance to the world`s poor countries. However, most aid flows are coming from the UK, United States of America Europe, Japan and the Nordic group such as Sweden, Denmark, Norway and Finland countries. It appears as if low income countries heavily depend on foreign aid to finance the level of investments needed to achieve sustainable growth. Many developing countries experience high unemployment, high inflation and balance of payment deficits among others due to inadequate investments in key sectors of their economies. So foreign aid would be needed to finance essential factor endowments like training the country`s workforce, advanced technology, capital investments. Also, most aid receiving nations are prone to external shock because of their dependent on primary commodity exports which can adversely be affected by changes in world demand and weather conditions. As a result, growth rates of most developing countries are not very sustainable as their economies experience higher inflation, fiscal and trade deficit. So it’s a great challenge for developing countries to attain economic growth without some form of external help either in the form of bilateral or multilateral aid. It appears as though foreign aid does provide a foundation for economic growth as it seek to cushion away some of the burden experienced by Less Developed countries (LDCs). Therefore the paper analyse the impact of aid on economic growth of the receiving country.

Furthermore, there are evidence to suggest that foreign aid work in alleviating poverty and promoting economic growth in developing countries. For example, the recent awareness campaign by anti-global poverty activists at the G8 summit in 2005 in Scotland highlight the importance of foreign aid to Less Developed Countries (LDCs. As most developing countries continue to experience mounting debt problem, budget deficits, and high unemployment and worsening poverty, foreign aid can be used to finance development projects aimed at stimulating economic growth or to meet debt repayment. For example, almost 40% of aid inflow in Senegal is used to finance debt obligation (Ekanayake,E and Chatrna.D, 2007)and this may help a country to focus on improving human capital,  technological advancements, and other infrastructures needed to attract private investments such as foreign direct investments . Moreover, by directing aid inflow to meet debt repayment increase a country`s credit rating as a result, funding from lenders would be easily available. Therefore, foreign aid is paramount to the success of recipient countries as it provides extra capital to build necessary tools required for economic growth.

In addition to that, many developing countries continue to experience recurring economic problems ranging from fiscal disparity, trade shocks and poor domestic consumption and all these hardship affect growth as such foreign aid would be necessary tool in encouraging economic growth to Less Developed countries. Pinto and Bayraktar (2008), argues that aid inflow improve budgetary balance and lead to increase in public investment thereby raising the nation`s capital stock thus creating essential conditions for inward foreign direct investments. In other words foreign aid provide desired framework for private investments which are the main drivers of economic growth. Moreover, given that most Less Developed economies largely depend on export earnings from primary goods which are prone to changes in world markets and weather patterns, foreign aid is vital to these emerging economies. Thus, a fall in world demand of primary commodities is likely to cause severe trade deficit of a country whose economy is based on primary commodity exports.  This is echoed by McGillivray (2003), he found that a 40% negative trade shock has a potential of reducing economic growth of country by more than 1%. The availability of foreign aid can mitigate the adverse effects of trade shock and prevent a country from going into recession as such it look like aid has a positive effect on economic growth.

Though aid seem to provide financial assistant to poor countries, countries respond to aid inflow differently as some countries react positively and others respond negatively. For example, Botswana and Republic of Korea in the 1960s and Ghana and Bolivia in the 1980s, and lastly in the 1990s Vietnam and Uganda responded positively to foreign aid, hence achieving economic growth. However, many developing countries that received huge sums of aid performed poorly in terms of attaining economic growth, they include, Zambia, Nepal, Zaire among others. These countries responded negatively to foreign aid and on the other hand, countries that receive little aid inflows such as Costa Rica, Algeria and China performed well to a number of economic indicators (Harrigan, J.and Wang.C, 2011). The reason why countries react differently to foreign is likely to be caused by a number of factors, for instance many developing countries do not have adequate infrastructure to deal with corruption, and ineffectiveness of policy framework of recipient countries. So the intended goals of aid tend to fail if recipient countries do not have enough resources to enforce sustainability use of foreign aid flows. This could provide an explanation as to explain why Zambia and other developing countries reacted negatively to foreign aid in terms of achieving economic growth.

Besides, that almost every year advanced countries give out large sums of money in bilateral aid to developing countries. The United States which is one of the largest foreign donors spent almost $20 billion on development assistance in 2004 and in the 1990s foreign aid claimed on average 0.5% of government budget(Milner,H.V and Tingley,D.H,2010).Donor make extensive use of their aid programs to promote their strategic and political interests (Wagner.D, 2003).For example, USAID is heavily influenced by the country`s interest in the Middle East  and almost one third of bilateral aid is allocated to Egypt and Israel (Minoiu, and Reddy, 2010). This is because American aid is linked to the country`s foreign policy and economic interest, whilst the UK and France seem to direct most of their bilateral aid to former colonies. Therefore, foreign aid will have negative impact on economic growth if donors` aid programs deviate away from economic and social needs of the recipient country. In other words , it appears as though the outcome of aid programs to developing countries is influenced by the donor`s motives and this might provide a clue as to why majority of countries perform poorly in the presence of aid. Moreover, foreign donors are also driven by strategic interests in developing world, and according to Wagner.D, (2003), 50% of bilateral aid in the 1990s was tied or partially tied to exports. Aid that is driven by political and strategic interests of the donor is likely to have a negative impact on economic growth since little or no emphasis on poverty alleviation would be addressed.

Moreover, the other area of consideration when examining the impact of aid on economic growth, it could worth pointing out that most aid programs received in developing countries have conditions attached to them. So most these conditionality aid programs focuses on demand restraint policies, usually implemented by large reductions in government expenditure through measures such as removal of subsidies, public sector employment cuts, privatization and tax reforms as well as liberalism of domestic economy. Although such conditionality on aid might have desired goals of encouraging efficiency economic practice in developing countries, there is growing evidence that majority of countries which implemented structural reforms performed badly. For example, structural reforms in Latin America between 1980s-1990 failed to resort economic growth in the region possibly because some policies prescribed by bilateral and multilateral aid donors were irrelevant to the region`s own growth strategy. Also the real wages rates dropped sharply in Latin American economy than the previous three decades of post war period (Woller, G.M and Hart, D.K, 1995) as the region experienced high inflation driven by economic restructuring of that 1980s-1990s.Huchison and Noy,(2003) concluded that  macroeconomic stabilization programs in Latin America were unsuccessful because IMF sponsored structural reforms did not have provide a platform that would put a stop the cycles of instability in the Latin American region. Therefore, in the presence of conditionality, foreign aid is likely to negatively affect economic growth of the receiving country.

In addition to that, the conditionality attached to aid often embodies element of strategic, economic and political motivations of donors which may diverge from the recipients on development goals (Wagner.D, 2003). Hence aid that is driven by self-interest of donors could distort the aid transfer process and may negatively impact on economic growth. For instance countries that give bilateral aid to gain export market of their capital goods to developing countries such aid is likely to respond positively to donor country that to the recipient. The argument presented by Milner,H.V and Tingley,D.H,2010) and (Wagner.D, 2003) that foreign aid which is aimed at promoting donors’ interests will only respond positively to donors’ objectives than promoting economic growth. The case for US aid which appear to focus on promoting America`s foreign policy and to enlarge its export market base somehow challenge the contention that aid work for developing countries. However, empirical evidence shows that bilateral aid from Nordic countries does appear to have positive effects of economic growth. The success of aid from Sweden, Denmark, Norway and Finland is more development oriented as it focus on strengthening economic infrastructure of the receiving countries such as poverty alleviation and social services programs. It would fair to say most Scandinavian donors have no special interest in the recipient country and as such aid programs are centred on promoting economic development. Given that most developing countries lack adequate infrastructure to attract private capital inflow, aid that is orientated towards build the necessary framework for national competency will have positive impact on economic growth of the recipient countries.

The intended objective of foreign aid is to create a platform for economic growth such as job creation, better education facilities, increased in taxable bases, and improve in health provisions of country or region.  In contrast the number of foreign aid recipient countries which appear to benefit from aid inflows are narrowing suggesting that aid could be detrimental to economic growth than it is perceived of. The outcome of foreign aid on economic growth is affected by a number of factors such as the manner, in which donors allocate their aid. So donors who allocate aid to promote their own interest rather than the recipients’ goal will yield negative on growth. Similarly many growing empirical studies shows the adverse effects of conditionality attached to foreign aid, particularly those that require recipient countries to liberalise their economies. In my view such donor policies are damaging growth potential recipient countries because liberalism expose the country to numerous risks such as in inflation, risk associated with trade and capital outflows. For example capital flight was a major problem in Latin America when the region relaxed exchange controls at a time of economic instability. So donors’ policies which seek to promote capitalism in developing countries in exchange for aid do in a way worsen economic growth in developing. Therefore, for aid to have positive impact on economic growth, it has to address economic and social needs of the recipient and be geared towards development.

Conclusion

The relationship between aid and economic growth has attracting large volume of literature in recent years and practitioners seem to disagree if aid does promote economic growth. Given the motive of some major donors it is highly unlikely if aid is going to have a positive impact on economic growth of recipient countries. For this reason aid that is driven by donors` economic, political and strategic interest will have negative effects on economic growth. The worsening economic crisis in most developing countries like those in Sub-Saharan Africa is alarming given the extent of foreign aid flows to these countries. However one major reason to this could be cause by conditionality attached to foreign they receive, many of these countries have implemented liberal economic policies with little success as a result incidence of extreme poverty, and unemployment and shrinking real GDP are common. This raises serious questions regarding the impact of aid on growth, is it that foreign aid fail to encourage growth orientated projects or failure is caused by corruption in recipient countries. I would therefore conclude that aid is very important to poor countries if it provide the foundations of economic growth of the recipient and is free from donors` strategic and economic interests.

The relationship between neo-liberal economics and development in third world:The Case for Zambia.

Introduction

 Many countries in developing world have a great task of improving the living standards of their citizens as underdevelopment and poverty remains one of the most pressing challenges. So the case study report investigates the impact of neoclassical policies on development for Zambia between 1980 and 2000. However, development can be defined as a process of improving or promoting people`s living standards and it is measured using the human development index. Todaro, (2000) argues that development should encompass conditions that create economic growth and self-esteem through the establishment of economic system and institutions that promote human development. Basically, development concerned with increasing people preference which could be in the form of consumer choice, democratic rights and liberty among others. The United Nations Development Programme (UNDP) instituted the human development index (HDI) to measure the wellbeing of a particular country. The human development index attempt to rank countries on a scale of between zero( low) and 1 (high) and it  is based on three goals or end products of development which are, real growth per capita income , life expectancy and education attainments. So the case study report seeks to highlight some of the impact of free-market, (neoclassical orthodoxy) policies on Zambia`s development over a period of two decades (1980-2000).It is also important to note that, the concept of development emerged in the post-war era maybe as part of outperform and to stop Soviet Union advance in newly independence states of Africa and other regions. So the notion of development became a theoretical position of the United States in the 1940s and the idea gave birth to international institutions such as the IMF and the World Bank, both intuitions were tasked to provide financial support for economic growth and development.

Economic and social trends in post-colonial Zambia

The Republic of Zambia is a landlocked state in southern Africa and it borders with the Democratic Republic of the Congo to the north, Tanzania, Malawi on the east, Mozambique, Zimbabwe, Botswana, Namibia and Angola. Zambia`s economy was dependent on mineral wealth with very few trained citizens to govern the country. Like any other developing country, Zambia`s economy was mainly based on primary production and copper was its largest earning power. The country obtained independence from Great Britain in 1964 and Kenneth Kaunda was the first President of a newly independent state. The country faced numerous development challenges as it had no manpower to run and govern the country, there were only less than 100 natives with university graduates at the time. The country had no or little infrastructure and schools as such about 0.5% of the country’s population were illiterate making her (Zambia) perhaps the least developed British colony. So the new government embarked on both economic and social reconstruction of the country through a number of national projects under the commission for development planning. The first policy framework was aimed at improving the nation`s education system which was poorly developed, so in its early inception the government devoted much of resources on public sector to build infrastructure and the education at all levels. President Kaunda introduced free education policy which meant that almost very school going child had opportunities to progress in future. The country`s policy reforms were guided through an idea of Humanism (a policy mix of socialism and Christian ethics) national recourses were mobilized through donations and the first university was opened in 1966, there after a number of tertiary institutions were built. The massive investment in the public sector especially in education led to a sharp increase in enrolments at all level by 1970.In addition to that, the country`s economy was controlled by the companies that had linked with the colonial administration just after independence so the government instituted the second phase of development planning, this time with the intent of facilitating the acquisitions of major investments in the mining sector and other strategic sectors. The government successful nationalized all major industries and according to Lambert, (online) almost 80% of the Zambian economy was now made up of stated owned enterprises in 1980. The endogenous development strategy (Humanism) enabled the country`s transition process faster, social protection was guaranteed for low income families and the education systems began to flourish. However, Zambia`s economy relied on copper and was the major exporting commodity accounting for about 90% of the country`s total revenue in the 1970s.

Theoretical reflection in development

In an attempt to address the problems of Less Developed Countries (LDCs), major theoretical assumptions on development began to emerge in the post-war era. The theories were aimed at finding out the causes of underdevelopment and how it could be rectified and these theories would save as policy guide line for development. The diagnostic approach possibly engineered the establishment of international institutions such as the World Bank and the International Monetary Fund (IMF) to address some of major problems of the peripherals. The theoretical positions of the 1950s and 1960s sort to suggest that lack of lack of saving and little investment in Less Developed Countries were the fundamental causes of underdevelopment and hence intervention at government or international level was needed to solve the problems. The neoclassical model or counterrevolution sited poor development in third countries as being a direct result of market manipulation due to government interventions and regulations. The model  

•          Lewis Model: developing countries have dual economy a (traditional and modern economy).He argues that poor countries were burdened by low level of return, low savings rates and excess labor force employed in the unproductive traditional economy and that if labor in the traditional economy were to be mobilized, poor countries would develop faster.

•          Rostow`s stages of growth argues that, countries have to go through five stages of growth and then he identified the problem of developing countries as being caused by the fact that take-off has not occurred to effect growth.

•          Dependent theory invented by Latin American economists   attempt to explain why many developing countries were so poor and he noted that Less Developed Countries were disadvantaged by their dependence on exporting primary goods as such their products could not compete with those in advanced countries. It argues that, Less Developed Countries (LDCs) should impose higher trade tariffs to protect their industries.

•          The neoclassical or liberal models view the problems in Less Developed countries differently, under development in third world countries is caused by poor resource allocation due to excessive government interventions.

Methodology

It can be argued that Rostow, Lewis and Prebisch models consider intervention at both national and international level as key to uplifting economic fortune of those in the peripheral as a way of increasing those  countries` savings rates and wealth accumulation. On the other hand, neoclassical or counterrevolution put emphasis on free-market as the main agency for development. The case study report focuses on neoclassical theory as model for development pursued in Zambia from 1980 to 2000 against its impact on development. Real GDP, life expectancy and education will be the main factors to be relied on when examining the effects of neoclassical model on Zambia. The human development index corresponding to reforms of the 1980s and 2000 will be generated to assist with the enquiry. Furthermore the report will make use of empirical evidence and available literature which seek to highlight the relationship between neoliberal economic policy and development.

The case for Zambia 1980 to 2000

In trying to solve its economic crisis as the price of copper continued to decline in the 1980s, Zambia merely abandoned its humanistic philosophy and policies that were inline with the neoclassical model as its long-term economic planning .The structural reforms were to be carried and implemented under the sponsorship of the International Monetary Fund in exchange for budgetary and balance of payment support. In the 1980s a wide range of reforms were carried out  these include but on all, privatisation of state enterprises, deregulation, reduction in government expenditure , ease of exchange control, subsidies were abolished, tight monetary policy, trade liberalism among others. The  reforms were implemented in all sectors and in agriculture, price fixation were removed, producer and consumer subsidies were reduced and state monopoly on agricultural marketing rights were demolished as well as allowing foreign agribusiness participation in the economy.  According to Wood and Kean, (1992), 1980 subsidy on maize meal was about 70% of the retail price, so reduction in subsidies coupled with other reforms such as the easing of price control, accelerated inflation .Also studies by Shawa, (1993) indicate real GDP in Zambia slummed from 1980 to 19887 and that real per capital declined remarkable   maybe due to depreciation of the value of the national currency by the late 1980s. Furthermore, cuts in public services and retrenchments of workers invoked riots and strikes around the country and leadership of President Kenneth Kaunda came into serious opposition from churches and labor groups. In 1987 Zambia temporarily aborted the IMF`s sponsored neoliberal reforms and the government introduced its own program called New Economic Recovery Programme (NERP). Under the New Economic Recovery Programme, the government returned control over all economic activities and spending. This resulted in slowing down of inflation as economic performance increased which recorded a growth rate of nearly 7% in 1988 compared to less than 3% in the previous years.

However, in 1991 a new government came in office and immediately implemented radical economic reforms (neoclassical model) which immediately eased food subsidies completely, child mortality rate in the country increased steadily in the 1990s due to deteriorating   social-economic indicators. Garenne and Gakusi (2006), child mortality increase suddenly from 1990 to 2000 and was higher than the previous decades, this was chiefly caused by decrease in real per capita income and austerity measures in the health sector. Also, the years of neo-classical reforms in Zambia witness unprecedented decline in life expectancy 1990 to 2000 when compared to preceding decades, (http://www.zamstats.gov.zm/media/chapter_8_mortality-_final.pdf). The decline in life expectancy and the subsequent increase in child mortality rate during the inter years of structural reforms had been attributed by diminishing of living standards for majority of Zambians. Nevertheless, there are other factors independent from economic reforms that were carried out during this period, epidemic diseases such as HIV/AIDS and related sicknesses are some of the great challenges that continue to drag the country backwards. In addition to that, Zambia is prone to droughts and apparently, the higher cases of malnutrition were recorded between 1990 and 2000 and at the same period the country’s agricultural production plummeted. Although natural disasters might have contributed to rapid decline in human development, empirical evidence which seem to suggest that reform in the agricultural sector prompted a shortfall in maize production in the 1990s.For example, Zambia’s agricultural production is dominated by small-scale farmers and poorly equipped so liberalism of the sector and elimination of subsidies forced the cost of farming to increase. It can be argued that the neoclassical model pursued in Zambia from 1980 to 2000 negatively affected the general life expectancy and mortality rate due to poor nutrition.

Industry and Manufacturing

In effort to restore economic recovery, President Frederick Chiluba decided to abandon the policy of 'humanism' altogether and pursued neoliberal economic reforms in full. All markets were deregulated, trade was liberalized and exchange control we demolished and public enterprises sold, in year 2000 almost 70% of the Zambian economy were now in the private sector (Lambert, T).However, privatization did not encourage growth as it was intended to do because the whole industry in particular manufacturing had already suffered due to years failed structural reforms. It is very likely that, most privatized   industries we left empty as investors flee the economy for competitive markets elsewhere. During the 1990s there were many incidence of capital flight as investors sought to protect their assets, a study by  Muuka,(1997), found that  majority of multinational firms operating in Zambia between 1990 to 2000 decided to either relocate or forced to downsizing their production operation due to worsen economic climate which they were operating in. A lot of firm closed their business sighting government policy failure to protect their operations and hence decided to relocate to countries like Zimbabwe, Tanzania, Uganda and other countries. The result was high unemployment and shrinking in manufacturing had nock off effects on the country`s national output (GDP).As such, there is no or little evidence to suggest that neo-liberal economic policies improved the country`s development ranking instead the economy registered the worst economic performance in the 1990s where it was implemented in full. The negative outcome of reforms in Zambia overshadows free-market arguments which imply that the problems of underdevelopment in poor countries were caused by too much government interventions. In this regard, the neoclassical model pursued by two successive governments in Zambia have exacerbated economic crisis than solving it as indicated by following GDP growth rates over the period of reforms. The country is human development index (HDI) can also tell us a lot about the impact of free-market policy reforms assumed by Zambia from 1980 to 2000. According to the world bank (table1), Zambia registered negative growth rates most in the 1990s than any other decade and these founding seem to confirm with Muuka`s study when consideration the plight of the country`s industry

 Social welfare and economic crisis 

During the first decade of independence, Zambia adopted a policy of (Humanism) and that guaranteed social protection for majority low or middle income families. Government expenditure on pubic services such as education and health care is paramount to economic prosperity of a given country. Excellent education system and health provisions are key to a nation`s labor market conditions. For example, empirical studies by Jung and Thorbecke (2003) found that the size and efficiency of public expenditure are vital in improving socioeconomic indicators. Also other empirical studies establish that government expenditure on public sector is positively and significantly correlated to economic growth. For instance   Bose, Haque and Osborn (2007) studies concluded that government expenditure on education has long-lasting effects on economic development. These findings highlight the role and the importance of government involvement in economic activities a given country. This could be the reason why many developing countries including Zambia invested heavily in public sector after independence. In this view, social protection was guaranteed for low and middle income family in Zambia before structural adjustments. It was difficult to measure the success of government expenditure on social welfare between 1960s and 1970s due unavailable data. However, based on number empirical studies which confirms that there is a positive correlation between expansionary fiscal policy and economic growth; one might conclude that Humanism (Christianity ethics-socialism) was positively related to economic development in Zambia. Therefore the collapse of socialism and subsequent implementation of neoclassical policies in Zambia between 1980 and 2000 had a huge effects the country`s long-term economic development planning. Expenditure on public services declined steadily from 1980 to the year 2000 and this had a nock on effect on social welfare provision especially for a country like Zambia where majority of people live in poverty. Therefore, Zambia`s inter years of economic reforms coupled with natural disasters such as draught might have exacerbated the country`s socioeconomic indicators and in year 2000 the country was listed under the Highly Indebted Country (HIC). If free-market policies provide the adequately address the problems in Less Developed Countries (LDCs) then, a constant decline of  GDP per capita and socioeconomic indicators between1980 and 2000 might emphasize inconsistency of the neoliberal model.  

Conclusion

Zambia `s economic and social trends  went through different phase as the country sought to address its long-term development planning, from the 1960s and 1970s,the government was heavily involved in economic and social activities of the country. The policy of Humanism represented a more interventionist model advocated by the early development theorists such as Rostow, Lewis and others. The government`s interventionist model of development managed to build institutions   such as schools, tertiary education and a reasonable social policy in less than two decades. Given that the country required to tackle numerous challenges such as issues related to manpower, infrastructure and to build a strong social policy institution, it can then be argued that the socialist (interventionist) government of President Kenneth Kaunda managed to safeguard the country`s development needs. The 1980s up to the year 2000 represent a different policy model for Zambia; the country went through economic reforms modeled on free-market model and almost all social-economic indicators gradual plunged.

Reference

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