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Liberalization or liberalisation (
British English British English (BrE, en-GB, or BE) is, according to Oxford Dictionaries, "English as used in Great Britain, as distinct from that used elsewhere". More narrowly, it can refer specifically to the English language in England, or, more broadl ...
) is a broad term that refers to the practice of making laws, systems, or opinions less severe, usually in the sense of eliminating certain government regulations or restrictions. The term is used most often in relation to
economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics anal ...
, where it refers to economic liberalization, the removal or reduction of restrictions placed upon (a particular sphere of) economic activity. However, liberalization can also be used as a synonym for decriminalization or legalization (the act of making something legal after it used to be illegal), for example when describing drug liberalization.


In economy and trade

The
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
of 1929 made nations throughout the world realize that the wide gap between the economic theory and practice in determination of internal trade policy was the major cause of worldwide economic disaster. Therefore, a need for reviving the classical theory of trade by adhering to free trade policy was felt. The Bretton Woods Conference of 1944, which recommended the establishment of International Monetary Fund (IMF) ''and the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
'', had also recommended the establishment of an International Trade Organization (ITO). Although, the IMF and the World Bank were established in 1946, the proposal for ITO did not materialize. Instead, the General Agreement on Tariff and Trade ''(GATT)'', a less ambitious institution, was formed in 1948. The primary objective of GATT is to expand
international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy) In most countries, such trade represents a significa ...
by liberalizing trade so as to bring about all round economic prosperity. GATT was signed in 1947, came into effect in 1948 and lasted until 1994. It was replaced by the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...
in 1995. The original GATT text (GATT 1947) is still in effect under the WTO framework. Thus liberalization was born. Economic liberalization refers to the reduction or elimination of government regulations or restrictions on private business and trade. It is usually promoted by advocates of
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
s and
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 econ ...
, whose ideology is also called
economic liberalism Economic liberalism is a political and economic ideology that supports a market economy based on individualism and private property in the means of production. Adam Smith is considered one of the primary initial writers on economic libera ...
. Economic liberalization also often involves reductions of taxes, social security, and unemployment benefits. Economic liberalization is often associated with
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
, which is the process of transferring ownership or outsourcing of a business, enterprise, agency,
public In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociology, sociological concept of the ''Öf ...
service or public property from the public sector to the private sector. For example, the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
has liberalized gas and electricity markets, instituting a competitive system. Some leading European energy companies such as France's
EDF EDF may refer to: Organisations * Eclaireurs de France, a French Scouting association * Education for Development Foundation, a Thai charity * Électricité de France, a French energy company ** EDF Energy, their British subsidiary ** EDF Luminus ...
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. 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.Marcella Vigneri and Paulo Santos (2007)
Ghana and the cocoa marketing dilemma: What has liberalization without price competition achieved?
, Overseas Development Institute
The term liberalization has its origin in the political ideology
liberalism Liberalism is a Political philosophy, political and moral philosophy based on the Individual rights, rights of the individual, liberty, consent of the governed, political equality and equality before the law."political rationalism, hostilit ...
, which took form by the early 19th century.


In social policy and government

In social policy, liberalization may refer to a relaxation of laws restricting certain practices or activities, such as
divorce Divorce (also known as dissolution of marriage) is the process of terminating a marriage or marital union. Divorce usually entails the canceling or reorganizing of the legal duties and responsibilities of marriage, thus dissolving th ...
,
abortion Abortion is the termination of a pregnancy by removal or expulsion of an embryo or fetus. An abortion that occurs without intervention is known as a miscarriage or "spontaneous abortion"; these occur in approximately 30% to 40% of pre ...
, or psychoactive drugs. Regarding
civil rights Civil and political rights are a class of rights that protect individuals' freedom from infringement by governments, social organizations, and private individuals. They ensure one's entitlement to participate in the civil and political life ...
, 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. 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

* Artistic freedom * Civil libertarianism * Cultural liberalism *
Decriminalization of sex work The decriminalization of sex work is the removal of criminal penalties for sex work (specifically, prostitution). Sex work, the consensual provision of sexual services for money or goods, is criminalized in most countries. Decriminalization is di ...
* Deregulation * Emancipation *
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 econ ...
* Freedom of speech *
Freedom of thought Freedom of thought (also called freedom of conscience) is the freedom of an individual to hold or consider a fact, viewpoint, or thought, independent of others' viewpoints. Overview Every person attempts to have a cognitive proficiency ...
* German reunification * Libertarianism *
Liberty Liberty is the ability to do as one pleases, or a right or immunity enjoyed by prescription or by grant (i.e. privilege). It is a synonym for the word freedom. In modern politics, liberty is understood as the state of being free within society fr ...
* Marketization * Oligopoly * Sex-positive movement * Sexual revolution *
Social liberalism Social liberalism (german: Sozialliberalismus, es, socioliberalismo, nl, Sociaalliberalisme), also known as new liberalism in the United Kingdom, modern liberalism, or simply liberalism in the contemporary United States, left-liberalism ...


Specific

* Drug liberalization * Energy liberalisation * Liberalisation features


References

Market structure Economics of regulation Law reform {{Gov-stub