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Global DevelopmentA Cold War History$
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Sara Lorenzini

Print publication date: 2019

Print ISBN-13: 9780691180151

Published to Princeton Scholarship Online: May 2020

DOI: 10.23943/princeton/9780691180151.001.0001

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The Dynamics of the Lost Decade

The Dynamics of the Lost Decade

(p.160) 10 The Dynamics of the Lost Decade
Global Development

Sara Lorenzini

Princeton University Press

This chapter discusses how the 1980s are often described as the lost decade in the history of development, when the allegedly universal crusade against poverty failed to deliver the expected results. In the early 1980s, neoliberal criticism of development continued apace. Critics railed against the social engineering underlying development and extolled the virtues of the market. The World Bank made no exception, as it moved away from Robert McNamara's basic needs-based policies, now considered harmful rather than useful. During the 1970s, while major donors retreated from bilateral lending, the World Bank had increased its commitments from $1 billion in 1968 to $13 billion in 1981. Cynical developing countries thought that it was “the rich countries' substitute for the NIEO.” However, results were poor, and key elements of the system came under attack: the overextension of the public sector with duties beyond normal governmental functions; excessive emphasis on physical capital and the resulting underestimation of human capital; and the proliferation of economy-distorting controls. The African case was seen as exemplifying the distortions caused by antipoverty World Bank policies.

Keywords:   development, antipoverty policies, market, World Bank, bilateral lending, developing countries, public sector, human capital, poverty

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