In general, liberalization (or liberalisation) refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces. Deregulation does not mean elimination of laws against fraud, but eliminating or reducing government control of how business is done, thereby moving toward a more free market. It is different from liberalization, where.[1] Liberalization of autocratic regimes may precede democratization (or not, as in the case of the Prague Spring The Prague Spring was a period of political liberalization in Czechoslovakia during the era of its domination by the Soviet Union after World War II. It began on 5 January 1968, when reformist Slovak Alexander Dubček came to power, and continued until 21 August when the Soviet Union and members of its Warsaw Pact allies invaded the country to).
In the arena of social policy it may refer to a relaxation of laws restricting for example divorce Divorce is the final termination of a marital union, cancelling the legal duties and responsibilities of marriage and dissolving the bonds of matrimony between the parties. In most countries divorce requires the sanction of a court or other authority in a legal process. In Canada, Saskatchewan allows married persons to "become the spouse of a, abortion Abortion is the termination of a pregnancy by the removal or expulsion from the uterus of a fetus or embryo, resulting in or caused by its death. An abortion can occur spontaneously due to complications during pregnancy or can be induced, in humans and other species. In the context of human pregnancies, an abortion induced to preserve the health, homosexuality Homosexuality is romantic or sexual attraction or behavior among members of the same sex/gender. As a sexual orientation, homosexuality refers to "an enduring pattern of or disposition to experience sexual, affectional, or romantic attractions primarily to" people of the same sex; "it also refers to an individual’s sense of or drugs A psychoactive drug, psychopharmaceutical or psychotropic is a chemical substance that crosses the blood-brain barrier and acts primarily upon the central nervous system where it alters brain function, resulting in changes in perception, mood, consciousness, cognition, and behavior. These drugs may be used recreationally, to purposefully alter one'.
Most often, the term is used to refer to economic liberalization Economic liberalization is a very broad term that usually refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with neoliberalism. The arguments for economic liberalization include greater efficiency and effectiveness that would translate to a &, especially trade liberalization Free trade is a system of trade policy that allows traders to act and or transact without interference from government. According to the law of comparative advantage the policy permits trading partners mutual gains from trade of goods and services or capital market A capital market is a market for securities , where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market ( liberalization.
Although economic liberalization is often associated with privatization Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector (businesses that operate for a private profit) or to private non-profit organizations. In a broader sense, privatization refers to transfer of any government function to the private, the two can be quite separate processes. For example, the European Union The European Union is an economic and political union of 27 member states which are located primarily in Europe. Committed to regional integration, the EU was established by the Treaty of Maastricht in 1993 upon the foundations of the European Communities. With over 500 million citizens, the EU combined generated an estimated 28% share (US$ 16.5 has liberalized gas Gas is one of four classical states of matter. Near absolute zero, a substance exists as a solid. As heat is added to this substance it melts into a liquid at its melting point , boils into a gas at its boiling point, and if heated high enough would enter a plasma state in which the electrons are so energized that they leave their parent atoms and electricity Electricity is a general term that encompasses a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning and static electricity, but in addition, less familiar concepts, such as the electromagnetic field and electromagnetic induction markets, instituting a system of competition Competition is a contest between individuals, groups, nations, animals, etc. for territory, a niche, or a location of resources. It arises whenever two or more parties strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For example, animals compete over water; but some of the leading European energy companies (such as EDF and Vattenfall Vattenfall is a Swedish power company and one of the leading energy producers in Northern Europe. The name Vattenfall is Swedish for waterfall, and is an abbreviation of its original name, Royal Waterfall Board . Vattenfall is wholly owned by the Swedish government) remain partially or completely in government ownership Public ownership refers to state ownership or control of any asset, industry, or enterprise at any level, national, regional or local (municipal); or to common (full-community) non-state ownership. The process of bringing an asset into public ownership is called nationalization or municipalization. There is a distinction to be made between state.
Liberalized and privatized public services Public services is a term usually used to mean services provided by government to its citizens, either directly or by financing private provision of services. The term is associated with a social consensus (usually expressed through democratic elections) that certain services should be available to all, regardless of income. Even where public may be dominated by just a few big companies particularly in sectors with high capital costs, or high such as water, gas and electricity. In some cases they may remain legal monopoly In economics, a monopoly (from Greek monos / μονος + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. (This is in contrast to a monopsony which relates to a at least for some part of the market (e.g. small consumers).
Liberalization is one of three focal points (the others being privatization and stabilization) of the Washington Consensus The term Washington Consensus was initially coined in 1989 by John Williamson to describe a set of ten specific economic policy prescriptions that he considered should constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund ,'s trinity strategy for economies in transition. An example of Liberalization is the "Washington Consensus" which was a set of policies created and used by Argentina
There is also a concept of hybrid liberalisation as, for instance, in Ghana where cocoa crop can be sold to a variety of competing private companies, but there is a minimum price for which it can be sold and all exports are controlled by the state[2].
Liberalization vs Democratization
There is a distinct difference between liberalization and democratization, which are often thought to be the same concept. Liberalization can take place without democratization, and deals with a combination of policy and social change specialized to a certain issue such as the liberalization of government-held property for private purchase, whereas democratization is more politically specialized that can arise from a liberalization, but works in a broader level of government.
See also
- Deregulation Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces. Deregulation does not mean elimination of laws against fraud, but eliminating or reducing government control of how business is done, thereby moving toward a more free market. It is different from liberalization, where
- Drug liberalization Drug liberalization is the process of eliminating or reducing drug prohibition laws. Variations of drug liberalization include drug relegalization, drug legalization, and drug decriminalization
- Electricity liberalization Electricity liberalization refers to the liberalization of electricity markets. As electricity supply is a natural monopoly, this entails complex and costly systems of regulation to enforce a system of competition
- Oligopoly In Economics, an oligopoly is a market form in which a market or industry is dominated by a small number of sellers . The word is derived, by analogy with "monopoly", from the Greek ὀλίγοι (oligoi) "few" + πωλειν (polein) "to sell". Because there are few sellers, each oligopolist is likely to be aware of
- Marketization Marketization is the process that enables the state-owned enterprises to act like market-oriented firms. This is achieved through reduction of state subsidies, deregulation, organizational restructuring (Corporatization), decentralization and in some cases privatization. These steps, it is argued, will lead to the creation of a functioning market
References
- ^ Sullivan, Arthur; Sheffrin, Steven M. (January 2002). Economics: Principles in Action. New Jersey: Pearson Prentice Hall Prentice Hall is a major educational publisher. It is an imprint of Pearson Education, Inc., based in Upper Saddle River, New Jersey, USA. Prentice Hall publishes print and digital content for the 6-12 and higher education market. Prentice Hall distributes its technical titles through the Safari Books Online e-reference service. ISBN The International Standard Book Number is a unique numeric commercial book identifier based upon the 9-digit Standard Book Numbering (SBN) code created by Gordon Foster, now Emeritus Professor of Statistics at Trinity College, Dublin, for the booksellers and stationers W.H. Smith and others in 1966 0-13-063085-3.
- ^ Marcella Vigneri and Paulo Santos (2007) Ghana and the cocoa marketing dilemma: What has liberalisation without price competition achieved? Overseas Development Institute The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement of sustainable livelihoods in developing
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Categories: Classical liberalism Categories: Economic liberalism | Liberalism | Political ideologies | Market structure and pricing Categories: Microeconomics | Financial markets | Industrial organization | Economics of regulation | Economics of regulation Categories: Law and economics | Public administration |
Tue, 29 Jun 2010 21:48:38 GMT+00:00
BigNews.biz (press release) During the Indo-US CEOs summit, the Indian Commerce and Industry Minister, Anand Sharma, pledged that there would be calibrated FDI liberalization in ...
