Synthesis and Distillation of Policy Issues: What Should Governments Do? The Global Financial Crisis as a Market and Government Failure
Julio C. Teehankee
Discipline: Social Science, Finance
Some of the current financial issues and problems besetting the world economies may be traced to the rise of neoliberalism in the 1980s which centered on free markets and free trade with the consequent less government regulation. Liberalization led to global prosperity and innovation after two decades but extreme market fundamentalism also contributed to the present financial crisis. Is the problem one of governance, of market failure or of people? It is all of these. Markets failed to allocate resources into an efficient manner; governments failed to curb the excesses of the markets. Policy analyses and the presentation of the speakers in the conference reveal that the possible solution is not limited to economics but should also include political adjustments in terms of policy pronouncements. There is a need to look into the equity issues, especially the safety nets of people who will be displaced by the ill effects of the financial crisis. A balance between politics, the experts, the players, the markets and everyone else is emphasized.