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Posted on April 17th, 2014, by

Neoliberal reform was highly controversial since, on the one hand, the neoliberal welfare reform has accelerated the economic growth in countries, which have implemented the reform, while, on the other hand, the welfare brought by the neoliberal reform was appropriated by the rich mainly, while the position of the poor and the middle class has hardly changed for better, while in some respects their position has deteriorated.

In fact, the neoliberal welfare reform aimed at the improvement of the economic situation. Countries implementing the neoliberal welfare reform aimed at the acceleration of their economic development. In this regard, they used such tools as privatization, development of international trade through elimination of fiscal barriers, the minimization of the government interference in the economy and deregulation. These measures stimulated fast economic growth due to the fast emergence of business activities as companies were not restricted in their development by government bodies and agencies. As a result, the economy started to grow considerably and countries enjoyed the increase of the national wealth.

However, the growth of the national wealth and welfare occurred at the national level but its effects on the life of the poorest strata of the society were insignificant. The problem of the neoliberal welfare reform was the unfair redistribution of wealth, which accumulated in the national economy due to the reform. To put it more precisely, the wealth was accumulated in hands of the rich since owners of large business and main shareholders of large multinational corporations appropriated the lion share of the national wealth that grew due to the reform.

Thus, on the one hand, the neoliberal welfare reform stimulated the fast economic growth, while, on the other hand, the large part of benefits of the reform was appropriated by the rich.

 

 

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