Interventionist-oriented strategies in developing growth and development

interventionist-oriented strategies

gov seeks to directly influence economy

development of human capital, protectionism, managed exchanged rate, infrastructure development, joint ventures, buffer stock schemes

What are different kinds of interventionist oriented strategies?

private sector only invests in this if profitable, so responsibility falls on gov

Why is it important for the gov to intervene to develop human capital?

depends on availablity of resources and the efficiency of the project as the private sector may do a better job

AO4: development of human capital

protectionism

supports development of domestic industries and protects them from international competition, e.g. tarrifs, quotas

joint ventures with global companies

FDI and partnerships with international companies supports economic development via…

• capital inflows creating jobs and higher national output

• transfer of human capital

buffer stock schemes

aims to protect buyers and sellers through max and min prices

• developing countries are often reliant on the export of primary products(commodities) whose prices can be volatile leading to uncertainty of income in many industries

During a surplus the gov stockpiles the extra supply(Buffer stock)

During a shortage the gov releases this buffer stock to increase supply and keep stable prices for consumers