The Times They Are A-Changing? Exploring the potential shift away from the neoliberal political-economic paradigm

Abstract

Modern economic history can be roughly split into different eras in which certain sets of ideas dominate politics and policy-making. This paper seeks to understand if a shift in the ‘political-economic paradigm’ is currently under way by inspecting the state of debates across a range of economic policy areas. It introduces the concept of ‘orthodox’, ‘modified’ and ‘alternative’ paradigms, corresponding to the status quo, its modification in the face of disruption or changed political goals, and a fundamental break from that status quo, respectively. Its central conclusion is that a significant shift is under way in many economic policy areas in many mainstream economic institutions. This shift has mainly occurred from ‘orthodox’ paradigm approaches – those that might broadly be described as based on neoclassical principles – to a ‘modified’ approach that alters the neoclassical approach in many ways but maintains its fundamental basis. Little to no movement towards what might be described as truly ‘alternative’ paradigm approaches is yet under way, though some mainstream institutions are exhibiting openness to these ideas. As such, an overall paradigm shift away from the dominant neoliberal paradigm is not yet underway.