Liberalization (or liberalisation) is any process whereby a state lifts restrictions on some private individual activities. Liberalization occurs when something which used to be banned is no longer banned, or when government regulations are relaxed.

The term "liberalization" is most often used in discussing economic liberalization, which refers to the reduction of state involvement in the economy, but it can be used in other contexts as well.

In law

In social policy, liberalization may refer to a relaxation of laws restricting, for example, divorce, abortion, or psychoactive drugs. Regarding civil rights, it may refer to the elimination of laws prohibiting homosexuality, private ownership of firearms or other items, same-sex marriage, inter-racial marriage, or inter-faith marriage.

In economy and trade

Economic liberalization refers to the reduction or elimination of government regulations or restrictions on private business and trade.[1] It is usually promoted by advocates of free markets and free trade, whose ideology is also called economic liberalism. Economic liberalization also often involves reductions of taxes, social security, and unemployment benefits.

Economic liberalization is often associated with privatization, which is the process of transferring ownership or outsourcing of a business, enterprise, agency, public service or public property from the public sector to the private sector. For example, the European Union has liberalized gas and electricity markets, instituting a competitive system. Some leading European energy companies such as France's EDF and Sweden's Vattenfall remain partially or completely in government ownership. Liberalized and privatized public services may be dominated by big companies, particularly in sectors with high capital, water, gas, or electricity costs. In some cases they may remain legal monopolies, at least for some segments of the market like consumers. Liberalization, privatization and stabilization are the Washington Consensus's trinity strategy for economies in transition.

There is also a concept of hybrid liberalization as, for instance, in Ghana, cocoa crops can be sold to competing private companies, but there is a minimum price for which it can be sold and all exports are controlled by the state.[2]

Comparison with democratization

There is a distinct difference between liberalization and democratization. Liberalization can take place without democratization, and deals with a combination of policy and social change specialized to a certain issue, such as the liberalization of government-held property for private purchase. Democratization is politically highly specialized; it can arise from a liberalization but works on a broader level of governmental liberalization.

See also



  1. ^ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. New Jersey: Pearson Prentice Hall. p. 175. ISBN 0-13-063085-3.
  2. ^ Marcella Vigneri and Paulo Santos (2007) "Ghana and the cocoa marketing dilemma: What has liberalization without price competition achieved?", Overseas Development Institute
Abortion in Belgium

Abortion in Belgium was fully legalized on April 4, 1990. Abortion is legal until 12 weeks after conception (14 weeks after the last menstrual period) and it is required for people to receive counseling at least six days prior to the abortion and to check in with their doctor to monitor their health in the weeks after the procedure. Later abortions are permitted if there is a risk to the person's life or the fetus shows risk of births defects.

As of 2009, the abortion rate was 9.2 abortions per 1000 women aged 15–44 years.

Bus deregulation in Great Britain

Bus deregulation in Great Britain was the transfer of operation of bus services from public bodies to private companies as legislated by the Transport Act 1985.


Democratization (or democratisation) is the transition to a more democratic political regime, including substantive political changes moving in a democratic direction. It may be the transition from an authoritarian regime to a full democracy, a transition from an authoritarian political system to a semi-democracy or transition from a semi-authoritarian political system to a democratic political system.

The outcome may be consolidated (as it was for example in the United Kingdom) or democratization may face frequent reversals (as it has faced for example in Chile in 1973). Different patterns of democratization are often used to explain other political phenomena, such as whether a country goes to a war or whether its economy grows.

Democratization itself is influenced by various factors, including economic development, history, and civil society. The ideal result from democratization is to ensure that the people have the right to vote and have a voice in their political system.

Drug liberalization

Drug liberalization is the process of eliminating or reducing drug prohibition laws. Variations of drug liberalization include: drug legalization, drug relegalization and drug decriminalization. Whilst many people would argue that decriminalization will only cause an increase in usage, studies from California and Colorado, two states that implemented the policy, found that "decriminalization" of marijuana possession had little or no impact on rates of use, and found that it was effective in reducing drug usage due to better control." Drug liberalization may go hand in hand with or include measures to ensure responsible drug use and some state that its challenge is not in criticizing prohibition, but in designing something better.

Economic liberalisation in India

The economic liberalisation in India refers to the changes and reforms, initiated in 1991, of the country's economic policies, with the goal of making the economy more market- and service-oriented, and expanding the role of private and foreign investment. Most of these changes were made as part of the conditions laid out by the World Bank and the IMF as a condition for a $500 million bail out to the Indian government in December 1991. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalisation has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. Its opponents have blamed it for increased inequality and economic degradation. The overall direction of liberalisation has since remained the same, irrespective of the ruling party, although no party has yet solved a variety of politically difficult issues, such as liberalising labour laws and reducing agricultural subsidies. There exists a lively debate in India as to whether the economic reforms were sustainable and beneficial to the people of India as a whole.Indian government coalitions have been advised by the IMF and World Bank to continue liberalisation. Before 2015, India grew at a slower pace than China, which had been liberalising its economy since 1978. In 2015, India's GDP growth outpaced that of China. The McKinsey Quarterly stated that removing major obstacles "would free India's economy to grow as fast as China's, at 10% a year".There has been significant debate, however, around liberalisation as an inclusive economic growth strategy. Income inequality has deepened in India since 1992, with consumption among the poorest staying stable while the wealthiest generate consumption growth. India's gross domestic product (GDP) growth rate in 2012–13 was the lowest for a decade, at just 5.1%, at which time more criticism of India's economic reforms surfaced; it apparently failed to address employment growth, nutritional values in terms of food intake in calories, and also export growth—and thereby was leading to a worsening current account deficit compared to the period prior to reform. The country continues to perform poorly in all developmental aspects, with high unemployment among the youth, poor women's security, rampant corruption, the highest number of malnourished children.

Economic liberalization

Economic liberalization (or economic liberalisation) is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities; the doctrine is associated with classical liberalism. Thus, liberalization in short is "the removal of controls" in order to encourage economic development. It is also closely associated with neoliberalism.

Most high-income of the countries have pursued the path of economic liberalization in the recent decades with the stated goal of maintaining or increasing their competitiveness as business environments. Liberalization policies include partial or full privatisation of government institutions and assets, greater labour market flexibility, lower tax rates for businesses, less restriction on both domestic and foreign capital, open markets, etc. In support of liberalization, former British prime minister Tony Blair wrote that: "Success will go to those companies and countries which are swift to adapt, slow to complain, open and willing to change. The task of modern governments is to ensure that our countries can rise to this challenge."In developing countries, economic liberalization refers more to liberalization or further "opening up" of their respective economies to foreign capital and investments. Three of the fastest growing developing economies today; Brazil, China, and India, have achieved rapid economic growth in the past several years or decades, in part, from having "liberalized" their economies to foreign capital.Many countries nowadays, particularly those in the third world, arguably were given no choice but to "liberalize" their economies (privatise key industries to foreign ownership) in order to remain competitive in attracting and retaining both their domestic and foreign investments. This is referred to as the TINA factor, standing for "there is no alternative". For example, in 1991, India had little choice but to implement economic reforms. Similarly, in the Philippines, the contentious proposals for Charter Change include amending the economically restrictive provisions of their 1987 constitution.By this measure, an opposite of a liberalized economy are economies such as be North Korea's economy with their "self-sufficient" economic system that is closed to foreign trade and investment (see autarky). However, North Korea is not completely separate from the global economy, since it actively trades with China, through Dandong, a large border port and receives aid from other countries in exchange for peace and restrictions in their nuclear programme. Another example would be oil-rich countries such as Saudi Arabia and the United Arab Emirates, which see no need to further open up their economies to foreign capital and investments since their oil reserves already provide them with huge export earnings.

The adoption of economic reforms in the first place and then its reversal or sustenance is a function of certain factors, presence or absence of which will determine the outcome. Sharma (2011) explains all such factors. The author's theory is fairly generalizable and is applicable to the developing countries which have implemented economic reforms in the 1990s.

Energy Market Authority

The Energy Market Authority (EMA) is a statutory board under the Ministry of Trade and Industry of Singapore. EMA's main goals are to promote effective competition in the energy market, ensure a reliable and secure energy supply, and develop a dynamic energy sector in Singapore.

Energy in Thailand

Energy in Thailand refers to the production, storage, import and export, and use of energy the Southeast Asian nation of Thailand. According to the Ministry of Energy, the country's primary energy consumption was 75.2 Mtoe (million tonnes of oil equivalent) in 2013, an increase of 2.6 percent over the previous year. According to British Petroleum, energy consumption was 115.6 Mtoe in 2013.

Free trade

Free trade is a trade policy that does not restrict imports or exports; it can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold liberal economic positions while economically left-wing and nationalist political parties generally support protectionism, the opposite of free trade.

Most nations are today members of the World Trade Organization multilateral trade agreements. Free trade is additionally exemplified by the European Economic Area and the Mercosur which have established open markets. However, most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes and non-tariff barriers, such as regulatory legislation.

There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare while free trade and the reduction of trade barriers has a positive effect on economic growth. However, liberalization of trade can cause significant and unequally distributed losses, and the economic dislocation of workers in import-competing sectors.

Global waste trade

The global waste trade is the international trade of waste between countries for further treatment, disposal, or recycling. Toxic or hazardous wastes are often exported from developed countries to developing countries, also known as countries of the Global South. Therefore, the burden of the toxicity of wastes from Western countries falls predominantly onto developing countries in Africa, Asia, and Latin America.

The World Bank Report What a Waste: A Global Review of Solid Waste Management, describes the amount of solid waste produced in a given country. Specifically, countries which produce more solid waste are more economically developed and more industrialized. The report explains that "[g]enerally, the higher the economic development and rate of urbanization, the greater the amount of solid waste produced.” Therefore, countries in the Global North, which are more economically developed and urbanized, produce more solid waste than Global South countries.Current international trade flows of waste follow a pattern of waste being produced in the Global North and being exported to and disposed of in the Global South. Multiple factors affect which countries produce waste and at what magnitude, including geographic location, degree of industrialization, and level of integration into the global economy.

Numerous scholars and researchers have linked the sharp increase in waste trading and the negative impacts of waste trading to the prevalence of neoliberal economic policy. With the major economic transition towards neoliberal economic policy in the 1980s, the shift towards “free-market” policy has facilitated the sharp increase in the global waste trade. Henry Giroux, Chair of Cultural Studies at McMaster University, gives his definition of neoliberal economic policy: “Neoliberalism ...removes economics and markets from the discourse of social obligations and social costs. ...As a policy and political project, neoliberalism is wedded to the privatization of public services, selling off of state functions, deregulation of finance and labor, elimination of the welfare state and unions, liberalization of trade in goods and capital investment, and the marketization and commodification of society.” Given this economic platform of privatization, neoliberalism is based on expanding free-trade agreements and establishing open-borders to international trade markets. Trade liberalization, a neoliberal economic policy in which trade is completely deregulated, leaving no tariffs, quotas, or other restrictions on international trade, is designed to further developing countries’ economies and integrate them into the global economy. Critics claim that although free-market trade liberalization was designed to allow any country the opportunity to reach economic success, the consequences of these policies have been devastating for Global South countries, essentially crippling their economies in a servitude to the Global North. Even supporters such as the International Monetary Fund, “progress of integration has been uneven in recent decades” Specifically, developing countries have been targeted by trade liberalization policies to import waste as a means of economic expansion. The guiding neoliberal economic policy argues that the way to be integrated into the global economy is to participate in trade liberalization and exchange in international trade markets. Their claim is that smaller countries, with less infrastructure, less wealth, and less manufacturing ability, should take in hazardous wastes as a way to increase profits and stimulate their economies.


Marketization or marketisation is a restructuring process that enables state enterprises to operate as market-oriented firms by changing the legal environment in which they operate.This is achieved through reduction of state subsidies, organizational restructuring of management (corporatization), decentralization and in some cases partial privatization. These steps, it is argued, will lead to the creation of a functioning market system by converting the previous state enterprises to operate under market pressures as state-owned commercial enterprises.

Motor Carrier Act of 1980

The Motor Carrier Regulatory Reform and Modernization Act, more commonly known as the Motor Carrier Act of 1980 (MCA) is a United States federal law which deregulated the trucking industry.

Open skies

Open skies is an international policy concept that calls for the liberalization of the rules and regulations of the international aviation industry—especially commercial aviation—in order to create a free-market environment for the airline industry. Its primary objectives are:

to liberalize the rules for international aviation markets and minimize government intervention as it applies to passenger, all-cargo, and combination air transportation as well as scheduled and charter services; and

to adjust the regime under which military and other state-based flights may be permitted.For open skies to become effective, a bilateral (and sometimes multilateral) air transport agreement must be concluded between two or more nations.

Price controls

Price controls are governmental restrictions on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of goods even during shortages, and to slow inflation, or, alternatively, to ensure a minimum income for providers of certain goods or a minimum wage. There are two primary forms of price control, a price ceiling, the maximum price that can be charged, and a price floor, the minimum price that can be charged.

Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements.

Although price controls are sometimes used by governments, economists usually agree that price controls don't accomplish what they are intended to do and are generally to be avoided. For example, nearly three-quarters of economists surveyed disagreed with the statement, "Wage-price controls are a useful policy option in the control of inflation."

Telecommunications in Pakistan

Telecommunications in Pakistan describes the overall environment for the growing mobile telecommunications, telephone, and Internet markets in Pakistan.

In 2008 Pakistan was the world's third-fastest growing telecommunications market. Pakistan's telecom infrastructure is improving dramatically with foreign and domestic investments into fixed-line and mobile networks; fiber systems are being constructed throughout the country to aid in network growth.. The major growth in mobile telephony was triggered by two steps taken by Prof. Atta-ur-Rahman FRS when he was Federal Minister of Science & technology. These were to introduce a "Calling Party Pays" (CPP) regime under which no charges are paid by the call receiving party on mobile phone calls. The second was the launching of UFone as a government owned mobile phone company that competitive call rates that led to strong market competition. The impact of these two measures has been the expansion of mobile telephony form 0.3 million mobile phones in 2001 to 160 million mobile phones by 2018

Telecommunications in Syria

The Syrian Ministry of Communications retains governmental authority over the internet in Syria. Prior to the Syrian civil war, telecommunications in Syria were slowly moving towards liberalization, with a number of licenses awarded and services launched in the Internet service provision market. The initiative reflected the government's change in attitude towards liberalization, following its promise to the European Union to liberalize markets by 2010. All other forms of fixed-line communications are provided by the state owned operator, Syrian Telecom (STE).

Telecommunications in Taiwan

Telecommunications in Taiwan comprise the following communication media, deployed in the Taiwan Area of the Republic of China and regulated by the National Communications Commission of the Executive Yuan.

Since the mid-1970s there has been an accelerating shift from traditional personal services (small shops and restaurants) to modern personal services (department stores and hotels) and modern commercial services (finance and communications).

Domestic television has long carried many foreign programs, and liberalization of import restrictions in the 1980s brought more.

There are about 30 daily newspapers and thousands of periodicals, many of the latter house organs of various political and non-political organizations. The government sets general guidelines for the political and cultural content of newspapers and periodicals. There are three television stations and about 30 radio broadcasting companies with more than 180 stations.

Three Links

The Three Links or Three Linkages (Chinese: 三通; pinyin: sān tōng) was a 1979 proposal from the National People's Congress of the People's Republic of China (PRC) to open up postal (simplified Chinese: 通邮; traditional Chinese: 通郵; pinyin: tōng yóu), transportation (especially airline) (通航; tōng háng), and trade (通商; tōng shāng) links between China and Taiwan, with the goal of unifying Mainland China and Taiwan.Before the establishment of the "Three Links", communication between the two sides were routed through intermediate destinations, primarily Hong Kong; Macau; Jeju, South Korea and Ishigaki, Okinawa Prefecture, Japan. The "Three Links" were officially established on 15 December 2008, with the commencement of direct flights, shipping and post.

Transition economy

A transition economy or transitional economy is an economy which is changing from a centrally planned economy to a market economy. Transition economies undergo a set of structural transformations intended to develop market-based institutions. These include economic liberalization, where prices are set by market forces rather than by a central planning organization. In addition to this trade barriers are removed, there is a push to privatize state-owned enterprises and resources, state and collectively run enterprises are restructured as businesses, and a financial sector is created to facilitate macroeconomic stabilization and the movement of private capital. The process has been applied in China, the former Soviet Union and Eastern bloc countries of Europe and some Third world countries, and detailed work has been undertaken on its economic and social effects.

The transition process is usually characterized by the changing and creating of institutions, particularly private enterprises; changes in the role of the state, thereby, the creation of fundamentally different governmental institutions and the promotion of private-owned enterprises, markets and independent financial institutions. In essence, one transition mode is the functional restructuring of state institutions from being a provider of growth to an enabler, with the private sector its engine. Another transition mode is change the way that economy grows and practice mode. The relationships between these two transition modes are micro and macro, partial and whole. The truly transition economics should include both the micro transition and macro transition. Due to the different initial conditions during the emerging process of the transition from planned economics to market economics, countries uses different transition model. Countries like P.R.China and Vietnam adopted a gradual transition mode, however Russia and some other East-European countries, such as the former Socialist Republic of Yugoslavia, used a more aggressive and quicker paced model of transition.The term "transition period" is often used to describe the process of transition from capitalism to socialism, preceding the establishment of fully developed socialism.

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