Page 93 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.72, # 2, 2015, pp. 87- 97

between women and men must be achieved by moving from traditional way of life
into modern one in order to involve women in development processes (1998: 16).
Transformation of society also covers changing the customs and traditions which
can hamper development. This idea of behind the PWC was also contributed from
the NIE. As Williamson mentioned, the NIE supports the idea of informal
institutions that include customs, traditions and proposes institutional changes for
social development (2000: 597). Stiglitz stresses the transformation of informal
institutions contributed by the NIE (1998: 16).
The contributions of the NIE to the PWC have produced a lot of policy
prescriptions in the modern economic policies. Good governance, role of state and
institutions play an important role in the documents and reports of the World Bank,
International Monetary Fund and international organizations. Aid policies of the
World Bank seek to deal with the economic problems of developing countries by
applying the principles of the NIE including institutional reforms and good
governance. Especially, the Development Report of the World Bank in 1997 highly
influenced by the PWC and the principles of the NIE stresses an important “role of
state in the changing world” (1997). According to the report, partnership between
governments and citizens, cooperation among all groups of society, “good
governance” and capacity of states to foster economic development and maintain
formal institutions are extremely important for development (1997). The report
influenced by the PWC seeks to promote the idea of “developmental state”
contributed by the NIE and promoted within the PWC (Tornquist, 1999: 89). The
contributions of the NIE to the PWC are also promoted in the foreign policy
prescriptions of the most supranational organizations, like the European Union. For
example, EU Neighborhood Strategy Papers promote the idea of “good governance”
to achieve sustainable development in its neighborhood countries (2004: 3).
Although the contributions of the NIE to the PWC have been dominating in
the modern economic policy documents and prescriptions for the developing world,
it is important to assess that how the contributions of the NIE to the PWC solved the
problems coming from the Washington Consensus by analyzing a number of
literature and cases.
Ankarloo has a conclusion in his paper to assess the contributions of the NIE.
According to Ankarloo, “NIE is not the solution to the problems of orthodox
economics. NIE is rather testament to fact that the problems remain unsolved. NIE
does not explain „the institutions of capitalism‟ – NIE is itself best explained as „an

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