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While the notion of austerity has recently become the subject of intense debate among academics and in policy circles in the industrialized countries, it is rarely if ever discussed in the so-called developing countries where policymakers faithfully implement its dogmatic principles; often with the tacit support of the intelligentsia and under the overt pressure of international financial institutions which make their lending explicitly conditional on the implementation of strict austerity measures; as exemplified in the 1990s by the Washington Consensus. In this chapter, we argue that austerity policies are inspired by the colonial rule and, therefore, have a long history in the developing world. By focusing on the post-independence era, particularly since the 1970s, the study shows that austerity measures have been designed and implemented with the clear aim of aborting any developmental strategy, and that the results have been as expected in most countries – economic stagnation, precarious employment, and a rise in poverty. Interestingly, the notable few exceptions happened in countries where official policymaking relied on the government as a major player stimulating growth and generating prosperity through massive public spending in a clear breakaway from the free-market ideology.
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