Joseph E. Stiglitz, José Antonio Ocampo, Shari Spiegel, Ricardo Ffrench-Davis, and Deepak Nayyar
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199288144
- eISBN:
- 9780191603884
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199288143.003.0003
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Despite progress in economic science, important disagreements remain about the conduct of macroeconomic policy. This chapter identifies three broad policy positions (‘conservative’ or ‘neoclassical’, ...
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Despite progress in economic science, important disagreements remain about the conduct of macroeconomic policy. This chapter identifies three broad policy positions (‘conservative’ or ‘neoclassical’, ‘standard Keynesian’, and ‘heterodox’) and looks at the theory and evidence behind each. The approaches differ not only on what they focus, but also in their assumptions concerning the structure and behavior of the economy and the behavior of government. The conservative approach focuses on inflation and deficits, which it attempts to address through tight monetary and restrictive fiscal policy. The standard Keynesian approach is more concerned with unemployment and stagnation, which it attempts to address through expansionary monetary and fiscal policy. The heterodox approach looks for non-standard ways (including the use of microeconomic interventions) to stabilize the economy, stimulate growth and employment, and contain inflation.Less
Despite progress in economic science, important disagreements remain about the conduct of macroeconomic policy. This chapter identifies three broad policy positions (‘conservative’ or ‘neoclassical’, ‘standard Keynesian’, and ‘heterodox’) and looks at the theory and evidence behind each. The approaches differ not only on what they focus, but also in their assumptions concerning the structure and behavior of the economy and the behavior of government. The conservative approach focuses on inflation and deficits, which it attempts to address through tight monetary and restrictive fiscal policy. The standard Keynesian approach is more concerned with unemployment and stagnation, which it attempts to address through expansionary monetary and fiscal policy. The heterodox approach looks for non-standard ways (including the use of microeconomic interventions) to stabilize the economy, stimulate growth and employment, and contain inflation.
Young‐Iob Chung
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780195178302
- eISBN:
- 9780199783557
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0195178300.003.0006
- Subject:
- Economics and Finance, South and East Asia
This chapter investigates how the colonial government promoted capital formation through fiscal and financial policies, by providing financial incentives and creating a favorable economic environment ...
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This chapter investigates how the colonial government promoted capital formation through fiscal and financial policies, by providing financial incentives and creating a favorable economic environment to invest in newly-produced capital assets. The fiscal policies examined are the taxation and subsidy measures that enhanced business opportunities for profit, especially in the targeted industries. The financial policies examined are those that established various financial institutions to mobilize savings — both from domestic and foreign sources — and allocate loans with subsidized interest for investment in the targeted industries through public financial institutions. The means through which savings were mobilized are examined, including deposits in financial institutions, which were loaned out for investment; Japanese government grants, foreign borrowings, and “forced savings” through currency issues to supplement inadequate owners equity. Since the government's excessive intervention through preferential schemes, such as directed credits, subsidies, and tax exemptions carried a considerable economic burden, its negative impact is also evaluated.Less
This chapter investigates how the colonial government promoted capital formation through fiscal and financial policies, by providing financial incentives and creating a favorable economic environment to invest in newly-produced capital assets. The fiscal policies examined are the taxation and subsidy measures that enhanced business opportunities for profit, especially in the targeted industries. The financial policies examined are those that established various financial institutions to mobilize savings — both from domestic and foreign sources — and allocate loans with subsidized interest for investment in the targeted industries through public financial institutions. The means through which savings were mobilized are examined, including deposits in financial institutions, which were loaned out for investment; Japanese government grants, foreign borrowings, and “forced savings” through currency issues to supplement inadequate owners equity. Since the government's excessive intervention through preferential schemes, such as directed credits, subsidies, and tax exemptions carried a considerable economic burden, its negative impact is also evaluated.
Richard Coopey
- Published in print:
- 2004
- Published Online:
- September 2007
- ISBN:
- 9780199241057
- eISBN:
- 9780191714290
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199241057.003.0006
- Subject:
- Business and Management, Information Technology
This chapter explores the decline of the IT sectors in Britain and France, showing how the foundations and structure of the industry there experienced long-term inertia and contained fault-lines ...
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This chapter explores the decline of the IT sectors in Britain and France, showing how the foundations and structure of the industry there experienced long-term inertia and contained fault-lines within it, but was also subject to short-term strategic mistakes which hastened its eventual relative demise. It is shown that the computer industry, certainly in its formative phase, was internally connected to the government — both in Britain and France. The chapter focuses on development in the 1960s when a sense of crisis pervaded both countries, and the fate of both economies was deemed to hinge on their ability to maintain or regain a position of global competitiveness in high-technology industry. The IT sector was singled out as the primary focus of this process.Less
This chapter explores the decline of the IT sectors in Britain and France, showing how the foundations and structure of the industry there experienced long-term inertia and contained fault-lines within it, but was also subject to short-term strategic mistakes which hastened its eventual relative demise. It is shown that the computer industry, certainly in its formative phase, was internally connected to the government — both in Britain and France. The chapter focuses on development in the 1960s when a sense of crisis pervaded both countries, and the fate of both economies was deemed to hinge on their ability to maintain or regain a position of global competitiveness in high-technology industry. The IT sector was singled out as the primary focus of this process.
Jan W. Van Deth
- Published in print:
- 1998
- Published Online:
- November 2003
- ISBN:
- 9780198294757
- eISBN:
- 9780191599040
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198294751.003.0003
- Subject:
- Political Science, Comparative Politics
The main element of a macro setting for micro politics in advanced industrial societies is the effect of increasing economic development on increasing levels of government activity. The chapter ...
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The main element of a macro setting for micro politics in advanced industrial societies is the effect of increasing economic development on increasing levels of government activity. The chapter provides a brief overview of these twin processes, looking first at several aspects of economic development over recent decades and its correlates in terms of rising levels of education, increasing mobility and communication, and the position of women in society, and then at corresponding growth and shifts in government intervention over the same period. The final part of the chapter looks at the characteristics of the political processes in Western Europe in terms of involvement and protest.Less
The main element of a macro setting for micro politics in advanced industrial societies is the effect of increasing economic development on increasing levels of government activity. The chapter provides a brief overview of these twin processes, looking first at several aspects of economic development over recent decades and its correlates in terms of rising levels of education, increasing mobility and communication, and the position of women in society, and then at corresponding growth and shifts in government intervention over the same period. The final part of the chapter looks at the characteristics of the political processes in Western Europe in terms of involvement and protest.
Joseph E. Stiglitz, José Antonio Ocampo, Shari Spiegel, Ricardo Ffrench-Davis, and Deepak Nayyar
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199288144
- eISBN:
- 9780191603884
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199288143.003.0011
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Underlying the failure of CML was an overly simple model that assumed efficient and complete markets. There are, however, problems with externalities and weak or absent insurance markets, especially ...
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Underlying the failure of CML was an overly simple model that assumed efficient and complete markets. There are, however, problems with externalities and weak or absent insurance markets, especially in developing countries, that these models did not consider. This chapter focuses on major categories of ‘market failures’. It examines the direct externalities associated with capital flows, and looks at how capital market liberalization can exacerbate the problems posed by coordination failures and broader macroeconomic failures. It also looks at the effect of imperfect information on investor behavior and the market failures associated with capital markets. It concludes with a discussion of the major objectives of government intervention.Less
Underlying the failure of CML was an overly simple model that assumed efficient and complete markets. There are, however, problems with externalities and weak or absent insurance markets, especially in developing countries, that these models did not consider. This chapter focuses on major categories of ‘market failures’. It examines the direct externalities associated with capital flows, and looks at how capital market liberalization can exacerbate the problems posed by coordination failures and broader macroeconomic failures. It also looks at the effect of imperfect information on investor behavior and the market failures associated with capital markets. It concludes with a discussion of the major objectives of government intervention.
W.A. Bogart
- Published in print:
- 2010
- Published Online:
- January 2011
- ISBN:
- 9780195379877
- eISBN:
- 9780199869060
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195379877.003.0002
- Subject:
- Law, Legal Profession and Ethics
When governments decide to address a myriad of issues with some kind of a legal response, there is a wide range of options that are available. But how do they determine which ones to use? How do they ...
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When governments decide to address a myriad of issues with some kind of a legal response, there is a wide range of options that are available. But how do they determine which ones to use? How do they know what their effects will be on the underlying problem they seek to address? This chapter analyzes legal intervention and the difficulties of achieving intended outcomes when such strategies are invoked. It begins with a brief survey of legal intervention in general as the larger context in which any decision to regulate any area of human activity is made. The second section considers “tools” and the “new” governance. Next, it looks at important issues regarding the impact of law.Less
When governments decide to address a myriad of issues with some kind of a legal response, there is a wide range of options that are available. But how do they determine which ones to use? How do they know what their effects will be on the underlying problem they seek to address? This chapter analyzes legal intervention and the difficulties of achieving intended outcomes when such strategies are invoked. It begins with a brief survey of legal intervention in general as the larger context in which any decision to regulate any area of human activity is made. The second section considers “tools” and the “new” governance. Next, it looks at important issues regarding the impact of law.
John H. Dunning
- Published in print:
- 1999
- Published Online:
- November 2003
- ISBN:
- 9780198296058
- eISBN:
- 9780191596209
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198296053.003.0002
- Subject:
- Economics and Finance, International
This chapter has two main tasks. The first is to trace the lineage of academic writings since the time of Adam Smith on the respective roles of markets, hierarchies, inter‐firm alliances, and ...
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This chapter has two main tasks. The first is to trace the lineage of academic writings since the time of Adam Smith on the respective roles of markets, hierarchies, inter‐firm alliances, and governments as modes of organizing economic activity in a capitalist economy, and also to analyse why, and in what ways, economists, political scientists, and organizational theorists have differed in their interpretation of the optimal role of governments. The second is to examine the implications of the internationalization, and more recently, the globalization of economic activity for the governance of resource creation and deployment, and the extent to which national administrations and supra‐national regimes need to modify their agendas and policy prescriptions in the light of the growing mobility of many tangible and intangible assets. The chapter further argues that changing patterns of demand and technological advances—especially as they have impacted on the coordinating and transaction costs of value‐added activity, and on the institutions and cultural infrastructure underpinning such activity —have critically affected the merits of alternative modes of economic organization, and that, over the years, the optimal combination of these modes has undergone a marked change. The four main sections of the chapter examine the main historical thrust of thinking about the economic legitimacy of democratically elected governments over the past 200 years; analyse some of the main justifications for government intervention set out in the literature, and then evaluate these justifications; and lastly, analyse the implications of the spatial widening of value‐added activity, suggesting that such widening, and, in particular, the emergence of the globalizing economy is significantly affecting ’best‐practice’ organizational arrangements for both the creation and the deployment of domestic resources.Less
This chapter has two main tasks. The first is to trace the lineage of academic writings since the time of Adam Smith on the respective roles of markets, hierarchies, inter‐firm alliances, and governments as modes of organizing economic activity in a capitalist economy, and also to analyse why, and in what ways, economists, political scientists, and organizational theorists have differed in their interpretation of the optimal role of governments. The second is to examine the implications of the internationalization, and more recently, the globalization of economic activity for the governance of resource creation and deployment, and the extent to which national administrations and supra‐national regimes need to modify their agendas and policy prescriptions in the light of the growing mobility of many tangible and intangible assets. The chapter further argues that changing patterns of demand and technological advances—especially as they have impacted on the coordinating and transaction costs of value‐added activity, and on the institutions and cultural infrastructure underpinning such activity —have critically affected the merits of alternative modes of economic organization, and that, over the years, the optimal combination of these modes has undergone a marked change. The four main sections of the chapter examine the main historical thrust of thinking about the economic legitimacy of democratically elected governments over the past 200 years; analyse some of the main justifications for government intervention set out in the literature, and then evaluate these justifications; and lastly, analyse the implications of the spatial widening of value‐added activity, suggesting that such widening, and, in particular, the emergence of the globalizing economy is significantly affecting ’best‐practice’ organizational arrangements for both the creation and the deployment of domestic resources.
Mario Mazzocchi, W. Bruce Traill, and Jason F. Shogren
- Published in print:
- 2009
- Published Online:
- October 2011
- ISBN:
- 9780199213856
- eISBN:
- 9780191695902
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199213856.001.0001
- Subject:
- Economics and Finance, Public and Welfare
The obesity epidemic and the growing debate about what, if any, public health policy should be adopted is the subject of endless debates within the media and in governments around the world. Whilst ...
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The obesity epidemic and the growing debate about what, if any, public health policy should be adopted is the subject of endless debates within the media and in governments around the world. Whilst much has been written on the subject, this book takes a unique approach by looking at the obesity epidemic from an economic perspective. Written in a language accessible to non-specialists, the authors provide a timely discussion of evolving nutrition policies in both the developing and developed world, discuss the factors influencing supply and demand of food supply, and review the evidence for various factors which may explain recent trends in diets, weight, and health. The traditional economic model assumes people choose to be overweight as part of a utility maximisation process that involves choices about what to eat and drink, how much time to spend on leisure, food preparation, and exercise, and choices about appearance and health. Market and behavioural failures, however, such as time available to a person, education, costs imposed on the health system and economic productivity provide the economic rationale for government intervention. The authors explore various policy measures designed to deal with the epidemic and examine their effectiveness within a cost-benefit analysis framework. While providing a sound economic basis for analysing policy decisions, the book also aims to show the underlying limits of the economic framework in quantifying changes in public well-being.Less
The obesity epidemic and the growing debate about what, if any, public health policy should be adopted is the subject of endless debates within the media and in governments around the world. Whilst much has been written on the subject, this book takes a unique approach by looking at the obesity epidemic from an economic perspective. Written in a language accessible to non-specialists, the authors provide a timely discussion of evolving nutrition policies in both the developing and developed world, discuss the factors influencing supply and demand of food supply, and review the evidence for various factors which may explain recent trends in diets, weight, and health. The traditional economic model assumes people choose to be overweight as part of a utility maximisation process that involves choices about what to eat and drink, how much time to spend on leisure, food preparation, and exercise, and choices about appearance and health. Market and behavioural failures, however, such as time available to a person, education, costs imposed on the health system and economic productivity provide the economic rationale for government intervention. The authors explore various policy measures designed to deal with the epidemic and examine their effectiveness within a cost-benefit analysis framework. While providing a sound economic basis for analysing policy decisions, the book also aims to show the underlying limits of the economic framework in quantifying changes in public well-being.
Sudhir Anand and S. M. Ravi Kanbur
- Published in print:
- 1991
- Published Online:
- January 2008
- ISBN:
- 9780198286370
- eISBN:
- 9780191718441
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198286370.003.0003
- Subject:
- Economics and Finance, Development, Growth, and Environmental
A substantial part of Sri Lanka's achievements in certain areas of basic needs provision such as health and education standards, has been due to the country's intrinsic and directed public policies. ...
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A substantial part of Sri Lanka's achievements in certain areas of basic needs provision such as health and education standards, has been due to the country's intrinsic and directed public policies. This chapter's econometric analysis, based on time series data, reconfirms that income growth alone would not have achieved that enviable basic needs record — the role of direct intervention has been significant. The expansion of health services has been more effective than food subsidies in mortality decline. There is a need to shift the focus from scrutinizing the effectiveness of intervention to looking at the best patterns and combinations of social welfare expenditure that can achieve the maximum impact on basic needs.Less
A substantial part of Sri Lanka's achievements in certain areas of basic needs provision such as health and education standards, has been due to the country's intrinsic and directed public policies. This chapter's econometric analysis, based on time series data, reconfirms that income growth alone would not have achieved that enviable basic needs record — the role of direct intervention has been significant. The expansion of health services has been more effective than food subsidies in mortality decline. There is a need to shift the focus from scrutinizing the effectiveness of intervention to looking at the best patterns and combinations of social welfare expenditure that can achieve the maximum impact on basic needs.
Timothy Besley
- Published in print:
- 2007
- Published Online:
- October 2011
- ISBN:
- 9780199283910
- eISBN:
- 9780191700279
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199283910.003.0002
- Subject:
- Economics and Finance, Public and Welfare
This chapter focuses on government failure. Most economists now agree that the idea of government failure needs to be placed alongside the idea of market failure in discussions of government ...
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This chapter focuses on government failure. Most economists now agree that the idea of government failure needs to be placed alongside the idea of market failure in discussions of government intervention. However, unlike market failure, there is no agreed upon definition of government failure. The economics literature is also obscure on which aspects of government failure are intrinsic to the fact that government has a monopoly of coercive power and which aspects are consequences of democratic political competition. The chapter provides an overview of these ideas and develops some simple economic examples to illustrate the main ideas.Less
This chapter focuses on government failure. Most economists now agree that the idea of government failure needs to be placed alongside the idea of market failure in discussions of government intervention. However, unlike market failure, there is no agreed upon definition of government failure. The economics literature is also obscure on which aspects of government failure are intrinsic to the fact that government has a monopoly of coercive power and which aspects are consequences of democratic political competition. The chapter provides an overview of these ideas and develops some simple economic examples to illustrate the main ideas.
Ahmed Galal (ed.)
- Published in print:
- 2008
- Published Online:
- September 2011
- ISBN:
- 9789774160509
- eISBN:
- 9781617970290
- Item type:
- book
- Publisher:
- American University in Cairo Press
- DOI:
- 10.5743/cairo/9789774160509.001.0001
- Subject:
- Political Science, International Relations and Politics
Most governments in the Middle East and North Africa (MENA) region use trade policy to protect certain industries, provide tax incentives to promote a particular type of investment, and make ...
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Most governments in the Middle East and North Africa (MENA) region use trade policy to protect certain industries, provide tax incentives to promote a particular type of investment, and make subsidized credit available to firms of a certain size. Such government intervention, known as industrial policy, is the topic of this book. The aim is to assess whether state intervention leads to net benefits to society, why policymakers intervene, and how to bring about a healthier balance between states and markets. Answers to these questions are given in six chapters based on research papers that were presented at a conference held in Cairo in November 2005, and include case studies on Egypt, Morocco, Turkey, and Jordan.Less
Most governments in the Middle East and North Africa (MENA) region use trade policy to protect certain industries, provide tax incentives to promote a particular type of investment, and make subsidized credit available to firms of a certain size. Such government intervention, known as industrial policy, is the topic of this book. The aim is to assess whether state intervention leads to net benefits to society, why policymakers intervene, and how to bring about a healthier balance between states and markets. Answers to these questions are given in six chapters based on research papers that were presented at a conference held in Cairo in November 2005, and include case studies on Egypt, Morocco, Turkey, and Jordan.
Emily Zackin
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691155777
- eISBN:
- 9781400846276
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691155777.003.0003
- Subject:
- Political Science, Public Policy
This chapter provides a definition of rights and describes the distinction between the categories of positive and negative rights. It first examines the rights movements' campaigns to add education, ...
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This chapter provides a definition of rights and describes the distinction between the categories of positive and negative rights. It first examines the rights movements' campaigns to add education, labor, and environmental rights to state constitutions before discussing the controversy surrounding the positive–negative distinction. It defines positive rights as those that require government intervention in order to protect people from threats that are not directly or solely governmental. In contrast, negative rights are those that require government to restrain itself in order to protect people from threats that stem directly from an overbearing and intrusive state. The chapter suggests that state constitutions and the politics that have surrounded them demonstrate the importance of positive rights as an enduring feature of the U.S. constitutional tradition.Less
This chapter provides a definition of rights and describes the distinction between the categories of positive and negative rights. It first examines the rights movements' campaigns to add education, labor, and environmental rights to state constitutions before discussing the controversy surrounding the positive–negative distinction. It defines positive rights as those that require government intervention in order to protect people from threats that are not directly or solely governmental. In contrast, negative rights are those that require government to restrain itself in order to protect people from threats that stem directly from an overbearing and intrusive state. The chapter suggests that state constitutions and the politics that have surrounded them demonstrate the importance of positive rights as an enduring feature of the U.S. constitutional tradition.
Gilles Saint-Paul
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691128177
- eISBN:
- 9781400838899
- Item type:
- book
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691128177.001.0001
- Subject:
- Economics and Finance, History of Economic Thought
The general assumption that social policy should be utilitarian—that society should be organized to yield the greatest level of welfare—leads inexorably to increased government interventions. ...
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The general assumption that social policy should be utilitarian—that society should be organized to yield the greatest level of welfare—leads inexorably to increased government interventions. Historically, however, the science of economics has advocated limits to these interventions for utilitarian reasons and because of the assumption that people know what is best for themselves. But more recently, behavioral economics has focused on biases and inconsistencies in individual behavior. Based on these developments, governments now prescribe the foods we eat, the apartments we rent, and the composition of our financial portfolios. This book takes on this rise of paternalism and its dangers for individual freedoms, and examines how developments in economics and the social sciences are leading to greater government intrusion in our private lives. The book posits that the utilitarian foundations of individual freedom promoted by traditional economics are fundamentally flawed. When combined with developments in social science that view the individual as incapable of making rational and responsible choices, utilitarianism seems to logically call for greater governmental intervention in our lives. Arguing that this cannot be defended on purely instrumental grounds, the book calls for individual liberty to be restored as a central value in our society. Exploring how behavioral economics is contributing to the excessive rise of paternalistic interventions, this book presents a controversial challenge to the prevailing currents in economic and political discourse.Less
The general assumption that social policy should be utilitarian—that society should be organized to yield the greatest level of welfare—leads inexorably to increased government interventions. Historically, however, the science of economics has advocated limits to these interventions for utilitarian reasons and because of the assumption that people know what is best for themselves. But more recently, behavioral economics has focused on biases and inconsistencies in individual behavior. Based on these developments, governments now prescribe the foods we eat, the apartments we rent, and the composition of our financial portfolios. This book takes on this rise of paternalism and its dangers for individual freedoms, and examines how developments in economics and the social sciences are leading to greater government intrusion in our private lives. The book posits that the utilitarian foundations of individual freedom promoted by traditional economics are fundamentally flawed. When combined with developments in social science that view the individual as incapable of making rational and responsible choices, utilitarianism seems to logically call for greater governmental intervention in our lives. Arguing that this cannot be defended on purely instrumental grounds, the book calls for individual liberty to be restored as a central value in our society. Exploring how behavioral economics is contributing to the excessive rise of paternalistic interventions, this book presents a controversial challenge to the prevailing currents in economic and political discourse.
JAMES E. VESTAL
- Published in print:
- 1995
- Published Online:
- October 2011
- ISBN:
- 9780198290278
- eISBN:
- 9780191684814
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198290278.003.0004
- Subject:
- Business and Management, International Business, Political Economy
This chapter correlates policy measures with the economic criteria which must have been fulfilled in order for industrial policy to have positively affected Japan's economic recovery and growth. If ...
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This chapter correlates policy measures with the economic criteria which must have been fulfilled in order for industrial policy to have positively affected Japan's economic recovery and growth. If Japanese industrial policy is to be considered to have helped foster successful economic development, it must satisfy two necessary conditions. First, industrial policy must be rational. It must serve an economic purpose which in the absence of policy would be unfulfilled. Otherwise, government intervention can only lower the growth potential of an economy. The usual competitive economic paradigm is of little use in analysing this issue, since the assumption of perfectly competitive markets is equivalent to asserting that industrial policy cannot be important in economic development. It has been observed here that if industrial policy matched market failures and externalities, it was rational and possibly served a useful function.Less
This chapter correlates policy measures with the economic criteria which must have been fulfilled in order for industrial policy to have positively affected Japan's economic recovery and growth. If Japanese industrial policy is to be considered to have helped foster successful economic development, it must satisfy two necessary conditions. First, industrial policy must be rational. It must serve an economic purpose which in the absence of policy would be unfulfilled. Otherwise, government intervention can only lower the growth potential of an economy. The usual competitive economic paradigm is of little use in analysing this issue, since the assumption of perfectly competitive markets is equivalent to asserting that industrial policy cannot be important in economic development. It has been observed here that if industrial policy matched market failures and externalities, it was rational and possibly served a useful function.
Marcela Miozzo and Vivien Walsh
- Published in print:
- 2006
- Published Online:
- May 2007
- ISBN:
- 9780199259236
- eISBN:
- 9780191717901
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199259236.003.0005
- Subject:
- Economics and Finance, Economic Systems
This chapter examines how East Asian countries became industrialized, and explores the contrast between industrialization in East Asia and Latin America since the 1970s. The chapter is organized as ...
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This chapter examines how East Asian countries became industrialized, and explores the contrast between industrialization in East Asia and Latin America since the 1970s. The chapter is organized as follows. The first section examines the debates on industrialization in the 19th century and draws lessons for industrialization in the 20th century. The second section addresses how East Asian countries caught up with the more advanced countries. The third section compares organizations and technology in Latin America and East Asia which are responsible for Latin American countries falling behind. The conclusion draws lessons for the understanding of the relation between organizations, technology, and less developed countries.Less
This chapter examines how East Asian countries became industrialized, and explores the contrast between industrialization in East Asia and Latin America since the 1970s. The chapter is organized as follows. The first section examines the debates on industrialization in the 19th century and draws lessons for industrialization in the 20th century. The second section addresses how East Asian countries caught up with the more advanced countries. The third section compares organizations and technology in Latin America and East Asia which are responsible for Latin American countries falling behind. The conclusion draws lessons for the understanding of the relation between organizations, technology, and less developed countries.
Hassan Malik
- Published in print:
- 2018
- Published Online:
- May 2019
- ISBN:
- 9780691170169
- eISBN:
- 9780691185002
- Item type:
- book
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691170169.001.0001
- Subject:
- Economics and Finance, Economic History
Following an unprecedented economic boom fed by foreign investment, the Russian Revolution triggered the worst sovereign default in history. This book tells the dramatic story of this boom and bust, ...
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Following an unprecedented economic boom fed by foreign investment, the Russian Revolution triggered the worst sovereign default in history. This book tells the dramatic story of this boom and bust, chronicling the forgotten experiences of leading financiers of the age. Shedding critical new light on the decision making of the powerful personalities who acted as the gatekeepers of international finance, the book explains how they channeled foreign capital into Russia in the late nineteenth and early twentieth centuries. While economists have long relied on quantitative analysis to grapple with questions relating to the drivers of cross-border capital flows, this book adopts an historical approach, drawing on banking and government archives in four countries. It provides rare insights into the thinking of influential figures in world finance as they sought to navigate one of the most challenging and lucrative markets of the first modern age of globalization. The book reveals how a complex web of factors—from government interventions to competitive dynamics and cultural influences—drove a large inflow of capital during this tumultuous period in world history. The book demonstrates how the realms of finance and politics—of bankers and Bolsheviks—grew increasingly intertwined, and how investing in Russia became a political act with unforeseen repercussions.Less
Following an unprecedented economic boom fed by foreign investment, the Russian Revolution triggered the worst sovereign default in history. This book tells the dramatic story of this boom and bust, chronicling the forgotten experiences of leading financiers of the age. Shedding critical new light on the decision making of the powerful personalities who acted as the gatekeepers of international finance, the book explains how they channeled foreign capital into Russia in the late nineteenth and early twentieth centuries. While economists have long relied on quantitative analysis to grapple with questions relating to the drivers of cross-border capital flows, this book adopts an historical approach, drawing on banking and government archives in four countries. It provides rare insights into the thinking of influential figures in world finance as they sought to navigate one of the most challenging and lucrative markets of the first modern age of globalization. The book reveals how a complex web of factors—from government interventions to competitive dynamics and cultural influences—drove a large inflow of capital during this tumultuous period in world history. The book demonstrates how the realms of finance and politics—of bankers and Bolsheviks—grew increasingly intertwined, and how investing in Russia became a political act with unforeseen repercussions.
Grzegorz W. Kolodko
- Published in print:
- 2000
- Published Online:
- October 2011
- ISBN:
- 9780198297437
- eISBN:
- 9780191685354
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198297437.003.0012
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Policies referring to the transition from government intervention to a free market system and from stabilisation to sustained growth can never come into being without the help of adequate state ...
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Policies referring to the transition from government intervention to a free market system and from stabilisation to sustained growth can never come into being without the help of adequate state involvement. Although markets have the natural capacity to move toward equilibrium, some imperfections and crisis tend to be unmanageable. Due to this, the importance of government interference is reviewed in this chapter, including its equity, growth potential, and capacity. However, there are two concerns that must be addressed about the government's further engagement in the economy. First, the chapter looks at the dependable approach to maintain long-term development with the occurrence of trivial external shocks. And second, if crisis happen due to externalities, then an automatic mechanism that brings distortions into their normal set-ups must be employed.Less
Policies referring to the transition from government intervention to a free market system and from stabilisation to sustained growth can never come into being without the help of adequate state involvement. Although markets have the natural capacity to move toward equilibrium, some imperfections and crisis tend to be unmanageable. Due to this, the importance of government interference is reviewed in this chapter, including its equity, growth potential, and capacity. However, there are two concerns that must be addressed about the government's further engagement in the economy. First, the chapter looks at the dependable approach to maintain long-term development with the occurrence of trivial external shocks. And second, if crisis happen due to externalities, then an automatic mechanism that brings distortions into their normal set-ups must be employed.
Won-Am Park
- Published in print:
- 2001
- Published Online:
- October 2011
- ISBN:
- 9780198296867
- eISBN:
- 9780191685286
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296867.003.0004
- Subject:
- Economics and Finance, Development, Growth, and Environmental, Macro- and Monetary Economics
Although Korea is believed to have attained economic growth through utilizing the export-oriented growth strategy, examining the country’s development processes reveal that such strategies are not ...
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Although Korea is believed to have attained economic growth through utilizing the export-oriented growth strategy, examining the country’s development processes reveal that such strategies are not without import substitution and a certain degree of government intervention. The role of the government in facilitating industrial development was made evident particularly during the Big Push which occurred over the period between 1974 and 1979. Like the overcapacity experienced by the petrochemical industry and other such industries, the Big Push brought about a wide variety of distortions to the economy that threatened Korea’s potential for experiencing growth. Despite such events, Korean policy makers were able to learn from the mistakes of this period that furthered interventionist and export-oriented policies. Through examining various economic reforms and identifying macroeconomic issues and policy responses, this chapter attempts to study how Korea managed capital inflows during the 1990s.Less
Although Korea is believed to have attained economic growth through utilizing the export-oriented growth strategy, examining the country’s development processes reveal that such strategies are not without import substitution and a certain degree of government intervention. The role of the government in facilitating industrial development was made evident particularly during the Big Push which occurred over the period between 1974 and 1979. Like the overcapacity experienced by the petrochemical industry and other such industries, the Big Push brought about a wide variety of distortions to the economy that threatened Korea’s potential for experiencing growth. Despite such events, Korean policy makers were able to learn from the mistakes of this period that furthered interventionist and export-oriented policies. Through examining various economic reforms and identifying macroeconomic issues and policy responses, this chapter attempts to study how Korea managed capital inflows during the 1990s.
Alice H. Amsden
- Published in print:
- 2001
- Published Online:
- November 2003
- ISBN:
- 9780195139693
- eISBN:
- 9780199832897
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0195139690.003.0010
- Subject:
- Economics and Finance, Economic History, International
One of the most controversial aspects of the rise of the successful late industrializing countries (the rest) was the role played by the government. As seen in this book, governments in the rest all ...
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One of the most controversial aspects of the rise of the successful late industrializing countries (the rest) was the role played by the government. As seen in this book, governments in the rest all intervened in markets in a deliberate and deep way because their economies had too few knowledge‐based assets to compete at world market prices even in modern labour‐intensive industries. But government failures were institutionally bounded: the set of institutions that framed the whole process of late industrialization was specifically designed to minimize the ill effects of interventionist policies. In this chapter the controversy over the role of the state is connected with the rise of the rest: first, a look is taken at Alexander Gerschenkron's theory on the process of catching up; then the underlying assumptions of the ‘assets approach’ taken are stated; next, a summary is made of what it means for market theory and its policy prescription of laissez‐faire to drop the assumption of perfect knowledge; and, finally, a few remarks are made about countries that have stumbled back and those that are (possibly) at the forefront in ‘the remainder’ (countries that have so far failed to industrialize).Less
One of the most controversial aspects of the rise of the successful late industrializing countries (the rest) was the role played by the government. As seen in this book, governments in the rest all intervened in markets in a deliberate and deep way because their economies had too few knowledge‐based assets to compete at world market prices even in modern labour‐intensive industries. But government failures were institutionally bounded: the set of institutions that framed the whole process of late industrialization was specifically designed to minimize the ill effects of interventionist policies. In this chapter the controversy over the role of the state is connected with the rise of the rest: first, a look is taken at Alexander Gerschenkron's theory on the process of catching up; then the underlying assumptions of the ‘assets approach’ taken are stated; next, a summary is made of what it means for market theory and its policy prescription of laissez‐faire to drop the assumption of perfect knowledge; and, finally, a few remarks are made about countries that have stumbled back and those that are (possibly) at the forefront in ‘the remainder’ (countries that have so far failed to industrialize).
Oliver Falck, Christian Gollier, and Ludger Woessmann (eds)
- Published in print:
- 2011
- Published Online:
- August 2013
- ISBN:
- 9780262016018
- eISBN:
- 9780262298650
- Item type:
- book
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262016018.001.0001
- Subject:
- Political Science, Political Economy
Governments around the world are deeply divided over the proper role of industrial policy, with some politicians arguing for hands-off governance and others supporting government intervention to ...
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Governments around the world are deeply divided over the proper role of industrial policy, with some politicians arguing for hands-off governance and others supporting government intervention to promote “national champions”—firms that receive government support for both political and economic reasons. This book gathers together economists who present the pros and cons of government support for national champions. The contributors test industrial policy for national champions by using the rigor of economic models, offering a quantitative perspective that complements and extends existing qualitative studies, and focus on issues emerging from the European Union’s substantial degree of market integration. In this book, many arguments in favor of or against policies promoting national champions are made; in a dynamic context, the book presents chapters that take a dynamic economy view, chapters that examine the political economy of the decision-making process, and chapters that offer “classical” models of market imperfections in static equilibrium. The different models provide a deeper understanding of industrial policy than a single stand-alone model could have done. What becomes clear from these different perspectives is that it is difficult to make a general case in favor of policies promoting national champions on purely economic grounds, and that these policies are best understood in political terms.Less
Governments around the world are deeply divided over the proper role of industrial policy, with some politicians arguing for hands-off governance and others supporting government intervention to promote “national champions”—firms that receive government support for both political and economic reasons. This book gathers together economists who present the pros and cons of government support for national champions. The contributors test industrial policy for national champions by using the rigor of economic models, offering a quantitative perspective that complements and extends existing qualitative studies, and focus on issues emerging from the European Union’s substantial degree of market integration. In this book, many arguments in favor of or against policies promoting national champions are made; in a dynamic context, the book presents chapters that take a dynamic economy view, chapters that examine the political economy of the decision-making process, and chapters that offer “classical” models of market imperfections in static equilibrium. The different models provide a deeper understanding of industrial policy than a single stand-alone model could have done. What becomes clear from these different perspectives is that it is difficult to make a general case in favor of policies promoting national champions on purely economic grounds, and that these policies are best understood in political terms.
