market vs intervention Flashcards
historic problems for LEDCs getting development
infrastructure trade liberalization (MEDC protectionism)
Asia succeeds because did intervene
free market argument
growth in LT, but high ST costs to poor (unemployment, essential goods, public services)
increases rural-urban divide (development focused on urban)
if not stable enough, will not attract FDI
market based mistakes
public sectors too big (non-sustainable, over-staffed, inefficient)
nationalized inefficient
excessive gov spending (budget deficits, borrowing, increase money supply, inflation)
conditions for development in developing countries
trade justice
debt relief
Free domestic markets, if at competitive size + sufficient infra)
political stability, minimized corruption
effective, targeted aid
Market based policies
Free trade Floating xchange rates LMR Deregulation, privatisation Liberalised flow of capital
Interventionist policies
Provision of infra
State provided/ subsidised edu
Welfare
Demand-side policies for stability
