How do the Economic Decisions from the Past Effect us today?

How do the Economic Decisions from the Past Effect us today?

Economic Decisions

Economy is an essential tool or a means of politics, morality, with the growth capital. In the meantime, the back of classical economics and the development of a field for outstanding study and the main objective has initially focused on the study of the best and most effective means of effective state in order to achieve the highest possible wealth and prosperity for its people on the assumption that there is a consistent significant between individual interests and the interests of society (Baumol, 2006).

Discussion

The past decades witnessed great changes in political and economic decision making. In the early eighties and nintees, while the third wave of democratization reached and traveled the region, the debt crisis of nations plunged into a period of deep economic recession. At the same time, the neoliberal economic paradigm became the dominant creed in both industrialized and developing countries in international economic institutions and postulated as the only possible response to the crisis in the world. This match had huge implications for the evolution of economic decisions. Indeed, most countries in the region were facing two major challenges at once: the democratic transition and institutionalization on the one hand, and the implementation of neoliberal economic reforms aimed at restoring growth and stability, on the other (Mankiw, 1992).

Each one of them, the democratic consolidation and structural, economic reforms involve enormous complexity as involving the reformulation of the relationship of state to society and the economy, respectively. Also, each process has its own logic - inclusion and political participation in the first case, and economic efficiency in the second - and requirements for their achievement. However, in practice these two logics are not always consistent and, indeed, the tensions generated overlapping terms, conditions the results of both reforms.

It is important to emphasize that both democratic consolidation and economic reform aimed at establishing a new development model are processes, that is not exhausted by one election day or the issuance of a reform package. Therefore, even when the start signal is launched first in one of the two spheres (political or economic), eventually both tend to merge into the same space-time, affecting and imposing restrictions on each other. That said, the specific dynamics of the interaction between political and economic reforms tend to be different depending on the sequence in which both are adopted (Davies, 1995). The decisions that were undertaken in the past have deep impacts on the economy of developed and developing countries. The gurus of economic upon which the progress of billions of economies rely have been the victim of illusive bubbles that lead them to take short term decisions and put the overall global economies in jeopardy. We can identify three types of sequences:

Countries that shortly after the transition to democracy were in a crisis situation and proceeded to the implementation of market economic reforms.

Countries with authoritarian regimes also face the crisis began ...