By Jiang Qizhou, Gan Shunli & Wang Yingying, Research Team on “Methodology of Reform”, Research Department of Macro-Economy of DRC

Research Report [Special Issue No.52 (Total 1455), 2015] 2015-12-25

Abstract: After the Second World War, the UK suffered from severe stagflation for about 30 years, causing a series of social problems. In order to combat economic recession, Mrs. Margaret Thatcher, after becoming the prime minister in 1979, launched a series of radical reforms which met with a mixed reception. In view of the reform methodology, Mrs. Thatcher successfully rebalanced the relationship between government and market, government and people, central and local government as well as democracy and the rule of law. The major measures include: clearly define the boundary of power and responsibility of the government and unleash market vitality; downplay the role of government and promote individual responsibility; establish the authority of central government and demote local autonomy; and achieve legalization of reform by means of democratic mechanism. However, there are both successful experience and painful failures in Mrs. Thatcher’s reforms, including clear reform targets with inadequate design of the reform package; firm determination for reform with lack of efforts in achieving consensus on reform goals; and reducing stakeholders’ interests with lack of concern for vulnerable social groups.

Key words: Thatcher’s reform, privatization, methodology