POL 2104 Chapter Notes - Chapter 10: Byrsonima Crassifolia, Reverse Engineering, Sanjaya Lall
20 Aug 2016
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Document Summary
Much of the debate on industrial policy has revived around the experiences of newly industrializing economies (korea, taiwan, singapore and hong kong) Dominance of neoclassical development stems from the pervasive idea that markets are ef cient and governments are not. Best development strategy is to let the market do it"s thing without intervention. This view sparks concerns about underlying assumptions of market ef ciency. East asian success happened at the same time as neoliberalism in uk and us and combined into a case for market-driven, non-interventionist policies in developing countries. People believed markets in developing countries were prone to more failures. Severe informational, institutional and entrepreneurial gaps necessitated comprehensive planning. Critical role of the state in guiding and coordinating industrial activity. By ignoring limited investment and human resources available to operate these industries ef ciently, developing countries spread their resources too thinly. Often gave wrong signals for resource allocation and did not tae advantage of bene cial externalities.
