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Macro and Micro Economics - Essay Example

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Topic: Assessing the Institutionalist Critique of ‘One-Size-Fits-All’ Policies Institution Affiliation: Date: Introduction The role of institutions in economic growth and development is evaluated and assessed based on diverse factors and concepts…
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Macro and Micro Economics
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Download file to see previous pages These three components account for the significant differences observed in the various economies in the world. Economic performance in the context of institutional effects on an economy consider expropriation of risks by governments, applicable laws, quality of bureaucratic procedures in the economy unethical practices like corruption, contracts repudiation by governments, trade operations and liberties that are civil in nature. In the view of these factors, the applicability of ‘One-Size-Fits-All’ policies in developing countries can be evaluated in the global context. The underlying interest is to determine the universality and global application of a ‘One-Size-Fits-All’ policy under the context of institutionalisms. The Assessment Liberalization policies in many developing economies are yet to receive full integration into the prevailing economic systems. Regulatory frameworks that are institutionally installed have been the primary pillars of market monitoring in these economies. Levels of development vary across developing economies, and so are the levels of development in developed economies (Roland, 2004, p.109-131). The role of deregulation practices in these economies is expected to take time before it is realized, even with the notion that ‘One-Size-Fits-All’ policies of liberalization are good for domestic and international business. Africa, Asia and Latin America economies for example shows that the characteristics of, and reasons for, liberalisation are to a large extent country and sector-specific (Greif, 2006, p.164). The general take that one is good for all fails to account for the individual characteristic of each economy, and therefore the intended economic impact of such a policy may not be realized. While liberalization of market and economies in the developed nations has been procedural over time, the developing nations’ case is characterized by hasty liberalization activities, backed up by policies that generalize the developing world’s scenario. Many and more important aspects of market and economy liberalization are overlooked in the process, resulting in inappropriate capacities of regulation and public apparatus that fail to account for specific economic conditions as need be. As a result, most institutions in these economies are strained to comply, even when they face significant challenges such as: information-sharing and enforcement problems, capture risk, difficulties in introducing competition and the manifold formation of universal service obligations which arguably acquire particular connotations in developing countries (Eicher and Schreiber, 2005, p.73). ‘One-Size-Fits-All’ policies are designed to apply and function universally, whether formulated ad implemented for developed or developing economies. The institutional critique of these policies in developed countries cites their uniformity in application and functionality. However, in developing countries, these policies are in a way adopted in a wholesale manner due to the fact that the institutions that advocate for them are economically influential to developing economies. In most cases therefore, the intended impact of the policies in the various economies that adopt them fail to be realized. Liberalization ‘One-Size-Fits-All’ policies for example are aimed at expanding deregulation of economies through the removal of market restrictions in terms of entry and exit, price reduction, ...Download file to see next pagesRead More
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