IDEAS home Printed from
   My bibliography  Save this paper

Contesting neoliberalism: public sector alternatives for service delivery


  • Ben FINE
  • David HALL


The crisis that erupted at the end of 2008 has cruelly exposed the limitations of the neo-liberal model in which the privatisation of public enterprise and provision has been a key component. Paradoxically, although still unmistakeably neo-liberal in many respects, the response has been for immediate extensive state intervention, including public ownership, to rescue the financial system and, soon after, similar intervention across industry as a response to potential bankruptcy and job loss. The paradox of state intervention with a neo-liberal flavour is, however, far from new and reflects three crucial features of the neo-liberal period that mark the slowdown over the past thirty years following the end of the post-war boom. First, neo-liberalism has been based upon an inconsistent and shifting configuration of ideology, scholarship, policy in practice and representation of reality, with changes within and across these over time, place and issue. Second, underpinning neo-liberalism has been the process of financialisation, not only the phenomenal growth of finance within traditional and new financial markets themselves, but the extension of finance into ever more areas of economic and social reproduction from which it was previously absent or excluded as a profit-making venture, as in pensions, health, education, housing, construction, and so on. Third, neo-liberalism has been through two phases, the first being appropriately termed “shock therapy” although of wider applicability than to the economies of eastern Europe. The state intervened to promote private capital in general and finance in particular without too much regard to the consequences. By contrast, the second phase has been concerned in part to respond to the dysfunction that this has created and, at the same time, and more important, to continue to sustain the process of financialisation. The current crisis signifies the failure of this second phase. But the heritage of neo-liberalism has been to undermine the institutional capacity in government and ethos to develop and implement policy that insulates public provision from financialisation. This signifies a systemic change that cannot simply be remedied by a change in policy or a stronger degree of regulation of the financial sector. The challenge for the future, then, is not only to secure alternative policies for public sector provision but also to restore the capacity to formulate and implement them, not least against what will continue to be the powerful influence of finance.

Suggested Citation

  • Ben FINE & David HALL, 2010. "Contesting neoliberalism: public sector alternatives for service delivery," Departmental Working Papers 2010-27, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2010-27

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Blank, Rebecca M, 2000. "When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services," Economic Journal, Royal Economic Society, vol. 110(462), pages 34-49, March.
    2. Dani Rodrik, 2006. "The social cost of foreign exchange reserves," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 253-266.
    3. John Marangos, 2007. "Was Shock Therapy Consistent with the Washington Consensus?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(1), pages 32-58, March.
    4. Stephanie Blankenburg & José Gabriel Palma, 2009. "Introduction: the global financial crisis," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 531-538, July.
    5. John Marangos, 2009. "The Evolution Of The Term ‘Washington Consensus’," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 350-384, April.
    6. Andy Denis, 2004. "Two rhetorical strategies of laissez-faire," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(3), pages 341-357.
    7. Fine, Ben, 1990. "Scaling the Commanding Heights of Public Enterprise Economics," Cambridge Journal of Economics, Oxford University Press, vol. 14(2), pages 127-142, June.
    8. Hellman, Joel S. & Jones, Geraint & Kaufmann, Daniel, 2003. "Seize the state, seize the day: state capture and influence in transition economies," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 751-773, December.
    9. Barretta, Antonio & Ruggiero, Pasquale, 2008. "Ex-ante evaluation of PFIs within the Italian health-care sector: What is the basis for this PPP?," Health Policy, Elsevier, vol. 88(1), pages 15-24, October.
    10. John Williamson, 2007. "Shock Therapy and the Washington Consensus: A Comment," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(1), pages 59-60, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marangos, John, 2009. "What happened to the Washington Consensus? The evolution of international development policy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(1), pages 197-208, January.
    2. John Marangos, 2009. "The Evolution Of The Term ‘Washington Consensus’," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 350-384, April.
    3. Pyle, William, 2006. "Resolutions, recoveries and relationships: The evolution of payment disputes in Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 317-337, June.
    4. Pilar Piqué, 2016. "La jerarquía de monedas nacionales y los problemas financieros actuales," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(34), pages 69-85, January-J.
    5. John E. Anderson, 2014. "Informal Payments to the Tax Collector in Transition Countries," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 3(2), pages 1-26, May.
    6. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Spatial aid spillovers during transition," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 79-95.
    7. Alfaro, Laura & Kanczuk, Fabio, 2009. "Optimal reserve management and sovereign debt," Journal of International Economics, Elsevier, vol. 77(1), pages 23-36, February.
    8. Juan F. Jimeno, "undated". "El sistema de pensiones contributivas en España: Cuestiones básicas y perspectivas en el medio plazo," Working Papers 2000-15, FEDEA.
    9. Daniela Gabor, 2012. "Managing Capital Accounts in Emerging Markets: Lessons from the Global Financial Crisis," Journal of Development Studies, Taylor & Francis Journals, vol. 48(6), pages 714-731, June.
    10. Koning, Pierre, 2012. "Contracting welfare-to-work services," Economics Letters, Elsevier, vol. 114(3), pages 349-352.
    11. Mr. Wendell A. Samuel & Mr. Mario Dehesa & Emilio Pineda, 2009. "Optimal Reserves in the Eastern Caribbean Currency Union," IMF Working Papers 2009/077, International Monetary Fund.
    12. Jintao Zhang & Zhen Yang & Li Meng & Lu Han, 2022. "Environmental regulations and enterprises innovation performance: the role of R&D investments and political connections," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 4088-4109, March.
    13. Shin-ichi Fukuda & Yoshifumi Kon, 2012. "Macroeconomic Impacts of Foreign Exchange Reserve Accumulation: Theory and International Evidence," Chapters, in: Masahiro Kawai & Peter J. Morgan & Shinji Takagi (ed.), Monetary and Currency Policy Management in Asia, chapter 5, Edward Elgar Publishing.
    14. Aizenman, Joshua & Sun, Yi, 2012. "The financial crisis and sizable international reserves depletion: From ‘fear of floating’ to the ‘fear of losing international reserves’?," International Review of Economics & Finance, Elsevier, vol. 24(C), pages 250-269.
    15. Cheung, Yin-Wong & Sengupta, Rajeswari, 2011. "Accumulation of reserves and keeping up with the Joneses: The case of LATAM economies," International Review of Economics & Finance, Elsevier, vol. 20(1), pages 19-31, January.
    16. Ricardo Sabbadini, 2018. "International Reserves Management in a Model of Partial Sovereign Default," Working Papers, Department of Economics 2018_14, University of São Paulo (FEA-USP).
    17. Zengji Song & Abraham Nahm & Zongyi Zhang, 2015. "The value of partial state ownership in publicly listed private sector enterprises: evidence from China," Post-Communist Economies, Taylor & Francis Journals, vol. 27(3), pages 336-353, September.
    18. Monnet, Eric & Puy, Damien, 2020. "Do old habits die hard? Central banks and the Bretton Woods gold puzzle," Journal of International Economics, Elsevier, vol. 127(C).
    19. Joshua Aizenman & Brian Pinto, 2013. "Managing Financial Integration and Capital Mobility—Policy Lessons from the Past Two Decades," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 636-653, September.
    20. Carmen M. Reinhart & Takeshi Tashiro, 2013. "Crowding out redefined: the role of reserve accumulation," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 1-43.

    More about this item


    Public Sector Alternatives; Privatisation; Neoliberalism; Financialisation;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • H1 - Public Economics - - Structure and Scope of Government
    • H4 - Public Economics - - Publicly Provided Goods
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mil:wpdepa:2010-27. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: DEMM Working Papers The email address of this maintainer does not seem to be valid anymore. Please ask DEMM Working Papers to update the entry or send us the correct address (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.