The State, business and the restoration of the neoclassical paradigm

The author describes the neoclassical restoration, which, from the 1970s onwards, took a radical approach to the search for a theory of development by attempting to fuse the particular characteristics of developing economies with the central ideas of economic theory. Intervention with the aim of furthering development was perceived not as a solution but as part of the problem, and adjustment programmes were oriented not so much towards correcting imbalances as towards establishing an economic structure close to neo-classical precepts. Several East Asian economies were chosen as examples of the application of correct policy, since they were seen as being market-driven, but closer analysis revealed that behind their export success lay the firm guiding hand of the State.