The dominant ideas in development economics have changed considerably over the four decades of its existence. Similarly, the influence of theory on policymaking has also changed, not only with new ideas, but more importantly, with the ideological preferences of those with power and influence, especially at the international level. During the eighties, development economics-which has emphasised market failures and other welfare reasons for judicious state intervention to ensure greater equity and efficiency-was under siege from the intellectual assault of market neo-conservatives in control of the major international economic institutions such· as the World Bank and International Monetary Fund, and supported by the dominant ideologies of Thatcherism and Reaganomics at the global level. Political economy, rejected in the seventies as an unsophisticated nineteenth century approach appropriated by the political Left, re-emerged in the hands of the Right as the main weapon in this assault. The collapse of the Soviet Union and allied East European regimes and the marketisation of the remaining economies still claiming to be in the socialist camp only seemed to prove the worst claims of the generally politically conservative economic liberals of the late twentieth century.