Proper roles and limitations of government

Solution Preview

Role of government in economic development
Discuss the proper roles and limitations of government and public policy in facilitating growth and development as practiced in developing nations.

What are the potential problems of economic transition from a planned economy to a competitive free-market economy.

Please discuss in details

For this I will take Singapore as benchmark economy. Developing countries can learn from these countries. Singapore now possesses a diversified economy with worldwide markets, geared to secondary and tertiary production. Scientific and technological methods are implemented in its industries on a large scale. They have gained self-esteem by their own successful efforts and through government guidance. Following steps have been taken by the government:

First, it had to bring about industrial stability by dismantling the communist party and fostering discipline in employer-employee relations.

Secondly, as they lacked the necessary economic know-how for speedy industrialization, it had to attract Multinationals which were seeking new sites for sub-factories.

Thirdly, it embraced the free enterprise system as the framework for industrialization. Free enterprise has always been supported by them. The quickest way to develop expertise, technology, and skills was by inviting multinationals and learning from them. The free enterprise system enabled them to operate as a global city in world wide markets and to attract capital

Fourthly, To maximize the potential of its people so they can contribute the most to themselves and the country. Education has been the key factor in this policy.

Fifth, The availability of administrative- and political capabilities especially in ...