It is widely believed by scholars that many of the varying levels of economic development between states are the direct result of a negative correlation between the aforementioned and the varying degrees of state intervention. In most cases it is evident that the more a state intervenes in its economy, the less the country will develop. While, at the same time, a country whose intervention exists at a minimal level will tend to have a stronger economy and a more rapid rate of development. However, it is also important to understand that as with many concepts there will always be extreme cases where the states may not strictly follow this model; in some cases they may even behave completely opposite. These extreme cases are often due to the idea that a state will either behave in a predatory or developmental manner.
In order to fully grasp the ideas of predatory and developmental states it is important to first understand that they are directly connected to the two polar views of market and government failure. An individual who is an advocate of the market failure would be likely to say that all markets will eventually fail unless the states intervene in attempts to correct or prevent this failure. While at the same time, a person who believes in government failure is likely to think that although a market may fail, that it is better for the market to correct itself compared to a government intervening. This idea roots from the belief that governments can also fail and that often times they may not be intervening in a way that promotes overall social good.
One major cause of market failure is often the inefficiency of a market to produce more or the same amount of goods while utilizing the same or fewer resources. If this we...
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... the revenues generated by exporting the country's impressive mineral wealth" (Bates 569). For this reason, although both states have a great degree of government intervention only Japan was able to economically advance due to the fact that its bureaucrats were chosen based on merit and a great deal of transformative government investment existed.
Overall, one could argue that it is not always true that a country with minimal government intervention will have the greatest economic growth as can be viewed in respects to both Japan and Korea. It is solely a issue of whether the state acts in a developmental or predatorial manner. Additionally, it is worth noting that although states such as Zaire and others in Africa didn't necessarily fail due to a extreme degree of government intervention but, because of the way many of the government's policies were implemented.
...conomically beneficial trade and technology development. In this regard the Epilogue uses sound logic to plausibly answer the wealth question. On the other hand, Mr. Diamond uses the same "national competition" thesis to purport that Asia's large, centralized governments were conspicuously growth-inhibitive. This argument would not seem to pass muster given what we have learned about the role of governments. Professor Wright's slides state that "Centralization may limit predation and even allow for growth" as "centralized predation = incentives to maximize the haul " This clearly refutes Mr. Diamond's argument that centralized, monopolistic Asian governments impaired societal advances. Thus, Guns, Germs, and Steel can scantly explain why China and the Middle East remain emerging markets while Western and Northern Europe enjoy significantly larger national wealth.
Japan was a country of contradictions in the early 1900's. Her growth in industry was a major factor for influencing her growth of power; whilst at the same time their structure was a very traditional political one. The Japanese Emperor Hirohito was right in the centre of the Japanese government. The emperor made Japan very militaristic and the military had a very strong influence in Japan. Japan's growth in industry had risen greatly since in the preceding 50 years and still it continued to grow.
This contrasted to the Ottoman Empire, which did not undergo such a revolution to become an industrialized society. In a state-guided industrialization program, Japan created modern infrastructure by creating railroads, postal systems, and national currency. Along with being a major exporter of textiles, munitions, industrial goods, newspapers, and electric lights were produced. The Ottomans were not able to create industrial economies to fend of European intrusion, and in turn, they depended on Europe. Japan was able to have a solid foundation for its industrial growth due to urban development that took place in the Tokugawa era. Different from the Ottoman Empire, Japan, in its time of peace, had become a fairly urbanized country with an educated population, leading into a burst of economic growth and commercialization. In contrast to the Ottoman Empire, Japan was able to experience industrialization due to the utilization of its own resources. The Ottomans, on the other hand, relied on foreign loans to support economic development. Unable to pay off these massive debts, Europe took control of its revenue-generating
...rnment created some programs, such as public education, by declaring that it must be done and leaving it to the villages to finance and arrange for its provision” (Watkins). In the nineteenth century, China and Japan were two excellent comparisons of how economies can shape a nation; China failed to succeed and Japan succeeded.
...that used latest of technology. They made Japan a major trade area so they could have access to other goods.
The current issues that have been created by the market have trapped our political system in a never-ending cycle that has no solution but remains salient. There is constant argument as to the right way to handle the market, the appropriate regulatory measures, and what steps should be taken to protect those that fail to be competitive in the market. As the ideological spectrum splits on the issue and refuses to come to a meaningful compromise, it gets trapped in the policy cycle and in turn traps the cycle. Other issues fail to be handled as officials drag the market into every issue area and forum as a tool to direct and control the discussion. Charles Lindblom sees this as an issue that any society that allows the market to control government will face from the outset of his work.
Firstly, there is a need to understand what is meant by development. It is defined as “the continuous and positive change in the economic, social, political and cultural dimensions of the human condition, guided by the principle of freedom of choice and the limited capacity of the environment to sustain such change.” (Sharpley, 2003: 8-7). Sharpley (2000) explains how theories of development have progressed; Firstly the ‘Modernisation Theory’ (1950s- 1960s), in which societies are seen to switch from traditional to modern only through economic growth. Next is the ‘Dependency Theory’ (late 1960s), this takes into account the historical and economic structures of developing countries, distribution of benefits, social players such as local elites, state interests and private companies, and situations in which an economy and development of a country can be conditioned by a more dominant country (Santos, 1970). The ‘Neo Classical Counter Revolution theory’ (1980s) was made to fit in with global events such as the economic depression, and development policies that build upon dependence on free market. Finally, ‘Sustainable development’ (late 1980s) is the theory that creates the encouragement for development of many developing countries. This theory aided by government policies of backings, tax breaks, and incentives. These theories have developed through growing knowledge of evolving processes, and dismissal of past theories (Sharpley, 2000).
When people such as writers, philosopher, and scientists of the past would imagine and predict what the world would be like in the twenty-first century, most thought of a glorious advanced human civilization. A civilization with a stable and unified global government and global economy that is beneficial to all. It seems that now, in year 2011, we are far from a stable international community. With a vast majority of people living without food, clean water, and basic political rights, the future envisioned 100 or 200 years ago is still far away. There are numerous nations with either weak or failed states. Since the people living in these states are usually suffering enormous hardships, something needs to be done. This leads to a few central questions like, how can a weak state be made stronger? What strategy is most likely to be effective? What would it take to turn a weak or failed state into one with sufficient strength to carry out the main functions of a state? All of these questions will be answered in order as this paper is read. Before diving into these questions, it is important to examine the key features/characteristics of a weak state.
All nations can get the benefits of free trade by being specialized in producing goods they have a comparative advantage and then trade them with goods produced by other nations in the world. This is evidenced by comparative advantage theory. Trade depends on many factors, country's history, institution, size and. geographical position and many more. Also, the countries put trade barriers for the exchange of their goods and services with other nations in order to protect their own company from foreign competition, or to protect consumers from undesirable products, or sometimes it may be inadvertent.
The government of Korea is not dispersing the money throughout the country. Instead, the money is utilized for unnecessary expenses in which the revenues go toward South Korea. It is a displacement of finances for a nation which can also be seen in the book’s chapter “Why Nations Fail Today: how to win the lottery in Zimbabwe.” In this chapter we discover that the president of Zimbabwe, Robert Mugabe, happened to have won the lottery. Acemoglu and Robinson argue that this was not just a coincidence. So with that being said, the real explanation for why some countries are poor and others are prosperous is because they are strategically constructed and organized differently. Rich countries have incentives such as more job availability, protection and monetary support from supporting countries. Poorer countries do not have these
The concept of perfect market allocation of resources was in W. Baumol's (1988,631), view largly theroretical. Baumol believed that economic models relied upon the concept of the invisible hand first discussed by Adam Smith. In these models, the perfectly competetive economy was able to allocate resources efficiently, without the need for market intervention by outside agents, including governments. However, there were significant weaknesses in these models particuarly in the area of ensuring equity of acess, social objectives and in the provision of public goods.
In analysis of market failure, a distinction should be drawn between partial and complete market failures. While the later implies a functional market with ineffective function the former describes a complete non-functional market with inability to supply the market with required goods o...
...high power status, Japan had to have a self-reliant industrial common ground and be able to move all human and material resources (S,195). Through the Shogun Revolution of 1868, the abolition of Feudalism in 1871, the activation of the national army in 1873, and the assembly of parliament in 1889, the political system of Japan became westernized (Q,3). Local Labor and commercial assistance from the United States and Europe allowed Japan’s industry to bloom into a developed, modern, industrial nation (Q,3). As a consequence production surplus, and food shortage followed (Q,3). Because of how much it relied on aid of western powers, Japan’s strategic position became especially weak. In an attempt to break off slightly from the aid of the west Japanese leaders believed that it would be essential for Japan to expand beyond its borders to obtain necessary raw materials.
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.
Japan has very significant characteristics in terms of their economic power either in the Asia- Pacific region or around the world. After World War II the Japanese economy was deeply affected by shortages, inflation, and currency devaluation means that Japanese economy was bankrupt position. Therefore, Japan passed under the control of US in the post- Second World War period. From this point, economic transformation or recovery or development has started in Japan with the impacts of US and Japanese governments. Besides this economic aid, US also guided Japan in democratization and demilitarization whereas Japanese government had direct role dealing with those developments different from what happened in Germany at that time. What it means that is Japanese government had played interventionist role into economy. On the other hand, one of the significant reasons of why US needed to help former enemy is the fact that after the WWII was the beginning of the Cold War and Russian presence was in the region. That’s why US made their contribution in order to revive Japan.