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Genre = Economic Development
Intriguing Connections: Capitalism, Socialism, their Alternatives and Critiques
Governments have always been tinkering with economic regulations. For some institutions, like property rights, government is usually the institution that can enforce its various aspects. This book is about how, what we call developed countries, impose regulation and institution sets on the developing countries while forgetting that when the developed countries were developing, they used different policies.
Government have the ability to impact economic living standards of their citizens. Much like in Smith's Wealth of Nations, government have the duty to provide infrastructure and other public works that the market may not be able to fund. Some protectionist schemes are seen as positive, such as paying for risk taking behavior in the infant-industry discussion. Others, the author does not make clear how they help the country, such as reducing international competition by putting up tariffs, a process that increase the price of the goods in the country which hurts the citizens.
Some institutions, like democracy, are very expense - especially if it is do be done right with as little corruption as possible. The developed countries, which tend to be more democratic, impose their political schemes on countries that cannot yet pay for the particular institution. Government have to be able to see which institutions and policy would help them, rather than just obey those of the other countries that have already developed. To grow, government can look at which policies work and do not work in other countries that have developed and select those that can help its own economy rather than just accepting a bundle of policies that may not work.
The book has various laws with the biggest being selection bias. The countries chosen for study were those that were helped by government involvement. Few words were given to the countries that tried policies and failed. No mention of countries that have a huge government aspect of the economy and still do not grow. Overall, the book has a good reading flow to it.
Pages to read: 141
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