Policies and Economic Liberalization Practice Test
•15 QuestionsA text compares Nigeria (Africa) and India (Asia) to highlight political consequences of economic liberalization. It defines liberalization as reducing state control through deregulation, privatization, and trade and investment openness, with goals of increasing efficiency, lowering inflation, and attracting FDI. India’s 1991 reforms reduced industrial licensing, lowered tariffs, and welcomed foreign investment; growth improved over the decade, and coalition politics required bargaining with regional parties and organized labor, producing incremental reforms and expanded social programs in later years. Nigeria’s episodic liberalization included currency reforms, subsidy reductions, and privatization efforts, often tied to IMF discussions; however, patron-client networks and federal distributional conflicts made implementation uneven, and subsidy protests became a recurring test of regime legitimacy. The passage argues that long-term political effects include changes in party competition, shifts in state capacity toward regulatory governance, and new cleavages between globally connected sectors and groups left behind. Based on the passage, what are the long-term political effects of economic liberalization based on the examples in the text?
A text compares Nigeria (Africa) and India (Asia) to highlight political consequences of economic liberalization. It defines liberalization as reducing state control through deregulation, privatization, and trade and investment openness, with goals of increasing efficiency, lowering inflation, and attracting FDI. India’s 1991 reforms reduced industrial licensing, lowered tariffs, and welcomed foreign investment; growth improved over the decade, and coalition politics required bargaining with regional parties and organized labor, producing incremental reforms and expanded social programs in later years. Nigeria’s episodic liberalization included currency reforms, subsidy reductions, and privatization efforts, often tied to IMF discussions; however, patron-client networks and federal distributional conflicts made implementation uneven, and subsidy protests became a recurring test of regime legitimacy. The passage argues that long-term political effects include changes in party competition, shifts in state capacity toward regulatory governance, and new cleavages between globally connected sectors and groups left behind. Based on the passage, what are the long-term political effects of economic liberalization based on the examples in the text?