On which of the following does the neoclassical counter-revolution school most blame underdevelopment

On which of the following does the neoclassical counter-revolution school most blame underdevelopment? Group of answer choices misguided government policies the legacy of colonialism unfair trade practices on the part of developed countries relatively rigid cultural traditions

The correct answer and explanation is:

The neoclassical counter-revolution school most blames misguided government policies for underdevelopment.

Explanation:

The neoclassical counter-revolution emerged in the 1970s and 1980s as a reaction against earlier development theories, especially those emphasizing structural constraints like colonial legacies or unfair global trade systems. This school emphasizes the role of markets, individual choices, and efficient resource allocation. It argues that underdevelopment results mainly from poor economic management and interventionist government policies rather than external or historical factors.

Key points:

1. Misguided government policies:
   Neoclassical economists argue that excessive government intervention—such as price controls, subsidies, protectionism, state-owned enterprises, and inefficient public spending—distorts markets, reduces incentives for investment and entrepreneurship, and leads to misallocation of resources. These policies create inefficiencies and slow economic growth.
2. Market efficiency and liberalization:
   The school advocates for free markets, deregulation, and liberalization of trade and investment. It holds that removing government distortions will allow market forces to allocate resources more efficiently, stimulating growth and development.
3. Critique of dependency and structuralist views:
   Contrary to theories blaming colonial history or unfair trade, neoclassical thinkers argue that many developing countries remain poor because of their own policy failures, not because of external constraints. They stress that many obstacles are self-imposed.
4. Role of institutions and incentives:
   The focus is on creating the right incentives through sound fiscal and monetary policy, property rights, and open markets. Institutions that limit corruption and promote competition are seen as essential.
5. Cultural factors less emphasized:
   Although some argue culture affects development, the neoclassical counter-revolution largely sees culture as less of a binding constraint compared to economic policies.

In summary, the neoclassical counter-revolution school places the primary blame for underdevelopment on misguided government policies that interfere with efficient market functioning, rather than on colonial legacy, unfair trade, or cultural rigidity. It proposes market-oriented reforms and better policy management as the main solution to development challenges.