countries and eventually the 'technocrats' in developing countries who had been educated in
these establishments.
The view that in developing countries the state had overreached itself had already been
powerfully propounded in the early 1970s by a succession of pro-market observers - as noted
above. Essentially, they pointed to the inefficiencies associated with government
interventions in most areas of policy, including trade, prices and production, arguing for a
smaller role for governments and a greatly enhanced role for the market. Discrediting of what
came to be termed dirigisme, with the view that government failures almost invariably
outweighed market failures, was carried further in the early 1980s (see e.g. Lal 1983;
Bhagwati 1982 and Little 1982). This view was reinforced by the 'new political economy'
(NPE) which argued that the actions of self-seeking individuals (bureaucrats and politicians),
led to individual rent-seeking, group short-termism and state predations, concluding that a
minimalist state would do least damage to social welfare.8 This replaced 'the image of the
benign state with its mirror opposite, the negative state' (Grindle, 1991, p. 43).
8 See e.g. Lal 1984, Conybeare 1982, Bhagwati 1982 , Bates, 1981, drawing on the work
of Buchanan et al., 1980.
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