DEVS 100 Study Guide - Neoliberalism, Import Substitution Industrialization, International Monetary Fund
8 Dec 2012
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Small role to regulate, equalizing, only there to equalize the playing field. Products are made at the lowest opportunity cost for this economy. Why is it significant to development: benefit trade between economies. A is good at producing lumber, b is good a milling it. A is going to distribute lumber to b to turn it into product. B is specializing in the manufacturing; a is specializing in the production. Therefore eliminating market inefficiencies: helps developing countries enter into the market competitively. Can produce coffee beans at the lowest. Criticisms possible cost: specializing in similar product across different countries, driving prices down, exploitation of cheap labour (children, women, etc, sing-product economies, making them reliable on the global north, drives currency prices down, therefore drives costs down. Privatization: sale of state owned entities to private corporations. Private companies are profit driven, less wasteful, therefore are more efficient at delivering their services. Private firms are free from government regulation.
