Topic > State intervention and the economy - 1252

It is widely believed among scholars that many of the different levels of economic development between states are the direct result of a negative correlation between them and the different degrees of state intervention. In most cases it is clear 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 faster rate of development. However, it is also important to understand that, as with many concepts, there will always be extreme cases where states may not strictly follow this model; in some cases they might even behave in a completely opposite way. These extreme cases are often due to the idea that a state will behave in a predatory or evolutionary manner. 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 views. of market and government failure. An individual who is a believer in market failure would probably say that all markets will fail sooner or later unless states intervene in an attempt to correct or prevent this failure. At the same time, a person who believes in government failure probably thinks that, although a market may fail, it is better for the market to correct itself than for government intervention. This idea arises from the belief that governments can also fail and may often fail to intervene in ways that promote the overall social good. A major cause of market failure is often the inability of a market to produce more or the same amount of goods using the same or fewer resources. If this were… half the paper… the revenue generated by the export of the country's impressive mineral wealth" (Bates 569). For this reason, although both states have a high degree of government intervention, only Japan it was able to advance economically due to the fact that its bureaucrats were chosen on merit and that there were many transformative public investments. Overall, it could be argued that it is not always true that a country with the least public intervention will have the most economic advantage growth as can be seen compared to both Japan and Korea. It is solely a question of whether the state is acting in an evolutionary or predatory manner. Furthermore, it is worth noting that although states like Zaire and others in Africa do not necessarily have this failed due to an extreme degree of government intervention, but also due to the way in which many of the government's policies have been implemented.