On one side of the argument are those who believe markets should drive development. There should be free trade, stable inflation and minimal government intervention.
On the other side of the argument are those who say that LDC's have not got the capital needed to provide the infrastructure that markets need (roads, power, education and health services for example). Therefore governments must take the lead by providing this.
But a third position takes this argument further. LDC's don't have the experienced entrepreneurs and necessary business skills to allow markets to allow development at the desired rate. Further they argue that the distribution of income that markets would cause will be far too unequal and this also requires intervention. In short the view is that the government must be responsible for the development process and most parts of the economy.
India is a country that has largely taken the third view. Indian industries are heavily subsidised, measures to even out the distribution of income are significant and prices are controlled. This has worked quite well for India, although their advantage as English speakers cannot be understated.
However now the policy is reaching its limits. The widespread involvement of government has stifled private enterprise, prevented the development of some industries and led to a corruption that diverts well intended funds from worthwhile projects.
So the time has come to reform and 'get the prices right' to allow India to unlock its potential. It's not going to be easy.
Personally I think that the third view, that governments needs to be responsible for the development process is ideal. It can not be left to the people of the developing countries to increase the development of the country by themselves. I'm not suggesting the government completely take control of the situation, but i'm sure if the people of the developing countries could increase their countries development by themselves then they would have. It's up to the government to steer the economies in the right direction - if that means investing in infrastructure such as roads and bridges in order to allow markets to allow development, then so be it - there is no doubt that the cost of such investment will most likely be outweighed by the benefits received in return. And India is an excellent example, having managed to progress into a newly advanced economic development stage (a 'BRIC' economy) this view has certainly worked for them. As pointed out in the article, there are issues that arise when there is government intervention, such as the prevention of some industries developing and it must be said that the role of the government and the need for it will vary from country to country - as not one economy is the same. One plan can not be used for all countries and this means that the government influence should be regulated and re-adjusted depending on the country, if the government is causing issues in a country - then it's time to revise what exactly the government's role should be.
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