The Theoretical and Practical Foundations of the Transitional Economic Reforms of the IMF

This paper is meant to analyze, and to critically evaluate the theoretical and practical foundations that are given by the IMF to justify the economic reforms that it imposed on countries such as Algeria, and that it still forces on underdeveloped countries which at one time or another, need its financial assistance, in their forced transition from a command system (in the form of a State Capitalism) to a free-market economic system, that is towards a capitalist economic system. These required reforms come under the form of a package of economic reforms, often called the "Washington Consensus" reforms, and which are of an eminently neoliberal inspiration. These reforms which Algeria has been implementing now and then, chugging along for more than three decades, are not at all appropriate for a satisfactory economic and social development for our country, or for any other developing country. The reason is that they can simply not be sustainable in the long term (ADLI & AKACEM, 2012), because they have not been designed in the interests of the countries such as Algeria but rather in the interest of multinationals companies (Western in particular). (STIGLIS, 2002, pp. 18-24) A better way to develop their economies, countries like Algeria, is to follow the economic development policies through a very strong protectionism, that the USA, starting 1816, has used to develop itself economically; actually, these are the policies that all the present-day developed countries have implemented at a time or another to precisely develop themselves. Unfortunately, for developing countries like Algeria, developed countries are doing everything possible to prevent developing countries from successfully following the economic development policies they have themselves used in the past. Nevertheless, it is still good to know that the history of the economic development of the United States has the greatest economic relevance to today's poor countries like Algeria, as a model of economic development to follow. (REINERT, 2008, pp. VIII- XXIX)