Lecture-7-Failed-State-and-Underdevelopment-Government-and-Market黄琪轩-国际与公共事务学院.pptx
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1、Lecture 7:Failed State and UnderdevelopmentGovernment and Market黄琪轩 国际与公共事务学院Reading for This WeekRobert Bates,“Governments and Agricultural Markets in Africa,”in Development and Underdevelopment.Edt by Seligson and Pass-Smith,Lynne Rienner Publishers,1998,pp.353-366.Outline1.Normative Theories of t
2、he State2.The Growth of Government and Government Failure3,Beyond the Washington Consensus?4,What is Failed State?5,Causes of Civil Conflict 1.Normative theories of the StateThe theory of Market failure;government intervention is needed when markets are not“Pareto Optimal”.Non-competitive marketsPub
3、lic goodsExternalitiesIncomplete MarketsSo far so good;some economists add the following:Merit GoodsMacro-Economic equilibria(central Banks)Certain economic goals,like eliminating poverty and inequality,or promoting economic growth2.The growth of government and Government FailureAfter WWII,growth of
4、 state was rapid:broader set of activities/objectives than western governments had in earlier era(in particular transfers and social policy).public role in production(to grasp the commanding heights),with growth of parastatalssize and growth of state was limited by fiscal means;even so,one consequen
5、ce of the growth of government in 1950s and 1960s,was fiscal crisis in 1980s.2.The growth of government and Government Failure ContdKruegers arguments:Governments try to do too much;Unintended consequences of government action;Government policy actually regressive(failure of targeting)Why?Officials
6、are not disinterestedPolicy creates rents,rent seeking3,Beyond the Washington Consensus?(Enormous gulf between policy and academic world);in the former,WC not a term of insult.Backlash since early 1990s:Substantial social cost of crisis particularly in latin America;“Heartless”Market fundamentalism
7、lost the public relations battles.3,Beyond the Washington Consensus?ContdBy the mid 1990s(under Wolfensohn)the WB started a big focus on social sectors and anti-poverty work,mostly through public action.Washington institutions overreached,notably on privatization and capital market liberalization,so
8、 that members of the consensus like joe Stiglitz became openly critical.3,Beyond the Washington Consensus?ContdThe“problem”of the Low income countries is not really too much state,it is“not enough state”;Poorest states are unable to perform basic tasks;Government Employment,early 1990s(as%of Populat
9、ion)General GovernmentCentralLocalEducation and HealthAfrica(20)2.00.90.30.8Asia(11)2.60.90.71.0E.Europe&ex-USSR(17)6.91.00.85.1Latin America&Caribbean(9)3.01.20.71.1Middle east and N.Africa(8)3.91.40.91.6OECD(21)7.71.82.53.4Global Average4.71.21.12.4Stylized facts about these low income sta
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