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the economy. The world major financial institutions such as the World Bank and the International Monetary Fund embraced the structural adjustment programmes (SAPS) as neoliberal economic policies with the aim of promoting economic growth and development. SAPS have however failed to bring about economic development but instead lead to the misery of many in the less developed countries.(Elliot 2006: 24).

Opponents of free trade as a vehicle to economic growth and development argue that the third world countries need fair trade rather than free trade. This is attributed to the fact that nations have varied comparative as well as absolute advantages and hence varied production levels. Again, researchers have established a clear link between trade liberalization and the major social factors such as economic growth, reduced corruption as well as increased democracy.

The neo liberalism theory of economic development can be highlighted to explain the economic development in China, an East Asian country. Since adopting the 1987 structural reforms where China replaced the initially state controlled economy with effective market controlled economy where the forces of demand and supply took full charge. There was the privatization of various state owned properties, a fact that led to their increased efficiency as well as effectiveness. The neo liberal tendencies are evident in the privatization of government owned assets and the total embracing of capitalistic tendencies. Capitalism has however been linked to other social evils such as crime, corruption unemployment as well as environmental issues. The inequality between the rich and the poor has also increased as the rich become richer while the poor become poorer. (Harvey 2007: 23).

According to Micheal Walton, in the article Neo,liberalism in latin America good or bad or incomplete ( 2004:166), the neo liberal approach to economic development can take two dimensions. One it leads to a shift in the policies adopted in a nation to favor more reliance on the market and secondly it leads to a reduction in the state involvement in the society. This theory can be viewed as a recent or modern theory as it started gaining popularity in the 1980s and 90’s. The test of time has proved that for free market systems to yield positive results, other factors must come to play and that it is not automatic that a market oriented economy will trigger economic growth and development. Such factors include the degree in which nations resources are distributed as well as the structural policies which govern the manner in which the social development and infrastructure are organized. The nation’s political as well as social institutions also play a critical role in determining the effect of economic growth through the neo-liberalism approach. Proponents of the neo liberalism approach of economic development argued that a shift to the market oriented economy would lead to economic development and stability as well as distribution of resources. Stability in this context would be fiscal and monetary in nature. Reliance on the markets or the forces of demand and supply and increased economic integration was thought to have increased growth effects. Income distribution was thought to be evenly distributed as chances for corruption would be reduced significantly. Competition would be boosted and this would lead to increased quality production of goods and services (Schuerkens 200