The balance between markets and intervention 4.8

IB Syllabus Requirements:

Strengths and weaknesses of market-oriented policies

Strengths

• Discuss the positive outcomes of market-oriented policies (such as liberalized trade and capital flows, privatization and deregulation), including a more efficient allocation of resources and economic growth.

Weaknesses

• Discuss the negative outcomes of market-oriented strategies, including market failure, the development of a dual economy and income inequalities.

Strengths and weaknesses of interventionist policies

• Discuss the strengths of interventionist policies, including the provision of infrastructure, investment in human capital, the provision of a stable macroeconomic economy and the provision of a social safety net.

Weaknesses

• Discuss the limitations of interventionist policies, including excessive bureaucracy, poor planning and corruption.

Market with government intervention

• Explain the importance of good governance in the development process.

• Discuss the view that economic development may best be achieved through a complementary approach, involving a balance of market oriented policies and government intervention.

Theory of knowledge: potential connections

What criteria can economists use to decide on the balance between markets and intervention?

Is development economics dependent upon external normative notions such as what constitutes a good or fulfilled life?

Enduring Understandings:

Historically LDCs have tried both Markets & Intervention, with varying success. Today most development economists advise a mix.

Essential Questions:

What are the strengths and weaknesses of market-led and interventionist strategies in LDCs?

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“4.8 – The Balance Between Markets and Intervention”

4.8 - Markets vs. Intervention.pptx

Development and the Role of Markets:

Development and the Role of Government:

Aid for Africa? No Thanks!

Should governments make it easier for companies to do business? Does it help the people of a country when MNC's come there if those companies are tax exempt?

TEST – Opinion Report on Roles in Development

Presentations next class!

Work on the following task (Glossary of terms)

Important Terms: Development

Practice Exam: Development (Note: we've already done this exam, but now you have more knowledge about development to help with your response)

Exam: Development- P3 (With Mark-scheme)