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Essay / State Intervention and Economics - 1252
It is widely accepted among scholars that many of the different levels of economic development between states are the direct result of a negative correlation between the above and the different degrees of state intervention. In most cases, it is obvious that the more a state intervenes in its economy, the less the country develops. At the same time, a country whose intervention exists at a minimal level will tend to have a stronger economy and a faster pace of development. However, it is also important to understand that, as with many concepts, there will always be extreme cases where states do not strictly follow this model; in some cases, they can even behave in completely opposite ways. These extreme cases are often due to the idea that a state will behave either in a predatory or developmental manner. In order to fully understand the ideas of predatory and developmental states, it is important to first understand that they are directly linked to the two polar visions. of market and government failure. A proponent of market failure would be likely to say that all markets will eventually fail unless states intervene to try to correct or prevent that failure. At the same time, a person who believes in government failure is likely to think that although a market may fail, it is better for the market to correct itself than to be intervened by government. This idea stems from the belief that governments can also fail and often fail to intervene in ways that promote the overall social good. One of the main causes of market failure is often the inefficiency of a market in producing more or the same quantity of goods. goods while using the same or fewer resources. If this we...... middle of paper...... the revenues generated by the export of the country's impressive mineral wealth" (Bates 569). For this reason, although the two states have a degree high level of government intervention, only Japan was able to progress economically because its bureaucrats were chosen on the basis of merit and there were many transformative government investments Overall, it could be argued that it did not. It is not always true that a country with minimal government intervention will have the greatest economic potential as can be seen in the case of Japan and Korea. It is only a question of whether the state acts in a developmental manner. or predatory Additionally, it is worth noting that while states like Zaire and others in Africa did not necessarily fail due to an extreme degree of government intervention but, due to the. how many government policies have been implemented.