Neoliberalism policy is famous for Margaret Thatcher and her economic policies. The impetus for the policy was rooted from a desire to avoid the drawbacks created by ‘developmental state’. More specifically, the policy aims at liberating private enterprise or "free" enterprise from all bonds that the government may impose to reduce economic gains.
Despite the growth pattern unambiguity, developing nations, in particular, have witnessed a sharp decline in economic growth in the neoliberal era in comparison to the developmental state period. Economic growth measured per capita or the average rise in GDP in comparison to the growth in the population has been evident in developmental state period. This is probably due to the collective government policies that target economic growth in developmental state period.
Neoliberalism policies fails promote distribution of income since there is free movement of factors of production and government allows forces of demand and supply. This was not the case during developmental state period established comprehensive programs direct all economic activity thus impacting on income distribution.
Developmental state policies help reduce poverty since poverty relates to both income distribution and economic growth in the long run. Unlike in neoliberalism regime, developmental state policies have consequences of reducing poverty since the state has more political power, autonomous as well as extra control over the economy that aims at elevating