For three decades, neoliberalism dominated the global political economy. Defined as an explicit preference for private over public control, neoliberalism represented a dramatic break from postwar policies. This article examines the historical development of neoliberalism through three perspectives: as an economic policy, as an expression of political power, and as an ideational hegemony. We reject the notion of neoliberal inevitability and suggest how it came to dominate all other possible alternatives. The review emphasizes the critical importance of political preferences and influences as well as the central role ideas played in defining policy paradigms.

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Neoliberal discourse often produces the impression that the world has undergone a wholesale shift toward laissez-faire and that this shift has produced economic prosperity. This article examines national economic data to discern the degree to which (1) governments have in fact retreated from the market and (2) countries have enjoyed increasing economic prosperity over a period in which they have supposedly been liberalizing. The evidence is mixed on both counts. Although international capital mobility and trade liberalism appears to have grown over the past two decades, there is little evidence of a broad scaling back of governments. Over the same period, countries have not experienced any appreciable improvement in growth, cross-national equality, employment, or national debt loads, although there is some evidence of improved price stability near the end of the 1990s.