International Institutions Influencing Economic Development of Developing Nations - Case Study Example

International Institutions Influencing Economic Development of Developing Nations Name Institution Introduction All of the known prominent economies of the world have had their governments implementing policies that monitor the economy during development, growth as well as during the fall downs. The necessity of the government’s involvement is employed to develop an approach of studying the status of the economy. For instance, when the economy of America has fall downs, the government predominantly relies on the concept of self-correction. This is a concept which implies that irrespective of whatever the governments does, mistakes a company makes or what happens to an economy, no action is taken and default situations take course. According to Booner’s(2012) view, any society that relies on self-correction is basically pessimistic and has no definite countermeasures to economical breakdowns. America poses as a perfect study are on matters of economy. A different interpretation of economy is on the various studies and researches indicating that the global populace continues to grow and, as expected, it will continue to put greater pressure on the planet’s limited natural resources. International relations and universal institutions, therefore, suggest that the industries influencing various economies must invest wisely. This is the point of interest, as it highlight the fact that international institutions and organizations have influence on economies, especially those of developing nations. Now, the idea is to establish if these influences are actually hindrances or enhancements to economic development of the said nations.Theories postulate that the direct aspects relating to the impacts of international institutions include the role of these institutions in urban growth and evaluation of economic standards. It is achieved by a comparison of a past time and the current situation. These would provide a methodologyapt for addressing the self-correction practice as well as the democratic deficit argument. Institutional Influences To start by looking at the positive side of this, the essay choses to consider UNICEF as an international organization with influences on economies. The organization is currently winding up a branding campaign with the plan of regaining global loyalty. Even donors are vital because they define the lifeline of the organization, the public and clients are as important as well. Thus, its influences are best described by the objectives. The main objective of UNICEF is to help improve the lives of children and their mothers in poor countries. However, it has the general millennium goal and objectives as; Educating girls advances development for all Engaging in outreach and advocacy Accompanying" countries in policymaking and implementation Promoting early child-care and development to ensure a ‘right start’ to education Intensifying partnerships for girls’ education Helping schools provide supplies, safe water and sanitation Safeguarding the right to education in emergencies The essence of this in this essay is to present the idea that the objectives and goals that UNICEF desires to achieve, collectively have a common outcome. According to the observation here, the result of these is a nation that has been empowered to sustain its own systems. Interestingly, this self-sustenance is only practical with a developed economy (Maria & Cecilia, 2005). A good look at the objectives show that they are meant for a developing nation and thus the organization targets enhancing economic development in developing nation. Interestingly, UNICEF may rely on the United Nations budget to realize these objectives, but it also targets both national and multinational corporations to solicit funds and in-kind donations. These national and multinational corporations are the international institutions that are, in this scenario, indirectly empowering, and thus, improving economies (Heskett, 2012). This gives the corporations a way for them to realize the corporate social responsibilities. UNICEF will then use its international place to take advantage of this. Most corporation will opt for this way of CSR because they get global recognition in return. Debt Cycles and Heavy Loaning Institutions Putting that aside, there is the issue of a continued debt cycle whereby developing countries continuously rely heavily on debts to other nations or international institutions. Some of these institutions take advantage of the heavily indebted nations to pursue their goals. In most cases, the pursuance of these institutions to achieve their goals ends up undermining the economic development of a nation (Williamson, 2012). This is the manner of loan which initially had low interest rates, have come to accrue greater interest rates, some of which are near impossible levels. Generally, all of these have exuberate to points where there are more pronounced economic challenges for these developing nations. Obviously, the question of loans results into deficits in the government (Bartlett, 2012) budgets has extended effects that most conservatives believe not to have serious crippling effects on the economy. They, the conservatives and other victims, fall the misconception that reducing government budget deficits yield no gains to the economy, yet overspending forms part of the true burdens of the government. However, evident results prove otherwise. There is more cost incurred in the deficits in form of interests, than the burden from a tax structure. Globalization and the free market economy This is another platform on which the impacts of international institutions on developing economies can be seen. The process of globalization has had significant changes in the manner in which nations trade goods and services with each other. International institutions have established a free market system (Doole& Lowe, 2008). The downside of this system is that developed countries are the ones that benefit the most from the free market system while economies of the developing nations suffer as much. For example, where a tariffs or any other form of taxation is levied on a product, the price of that product will be higher in the receiving country. This is a particularly sad story considering that most of the importing countries are the poor ones with developing economies. One can easily perceive this as a political action that has impacts on the economy of the misfortunate (Ellis &Singh, 2010). These tariffs hinder economic development in developing nations that import products and services. This is majorly because the tariffs are designed to protect the local produces but they go against the principles of the free market economy, thus harmful to young economies. This can be particularly blamed on the World Trade Organization (WTO), and other free trade bodies, for letting the unwanted unfairness to go on, yet they have the power and ability of eliminating the tariffs entirely.This is a highlight of democratic deficit when such organizations fail to fulfil their responsibilities. Free trade principles were formulated with a positive vision (Goddard, 2006), but the misconduct has led to adverse effect on millions of poor people around the world by giving rise to transnational institutions that outsource labour from nations where workers are exploited. Corruption in Institutions and Democratic Deficit Without a doubt, growth in economic in economic development proves as the most viable path to be followed with efforts of raising people’s earnings and decreasing poverty in the developing countries. Ideally, this is because economic growthgenerates jobs and opportunities for poor people to support themselves and their families, and the nation at large. However, this hardly sees the light of day, especially in a country where the leaders and democratic institutions put their own interests first. Corruption and fraud has eaten into the government systems of most poor countries and thus democratic institutions fail to fulfil the principles of democracy itself (Meny, 2003). These democratic deficit may be a result of negligence and incompetence, or just lack of mandate or jurisdiction of certain issues. For instance, there have been arguments that the United Nations has been experiencing a democratic deficit because it is without directly elected representatives. Corruption and democratic deficits, especially those driven by selfishness and negligence, have undesirable outcomes. Particular of such is that many people are deprive of formal rights to even own land they live and work on. Conclusion As mentioned above, all of the policies, strategies, systems and public initiatives formulated by government are with the aim of enhancing economic growth of its nation and peoples. This is because development in the economy has almost all of the answers to the problems that a nation may face naturally. Subsequently, international institutions have established and they have had impacts on the economies of nations as detailed above. Some of these impacts are positive while other are predominantly a hindrance to economic growth, especially in developing nations. As the paper details, these impacts are manifested through the relative approaches to economy, debt cycles and heavy loaning institutionsglobalization and the free market economycorruption in institutions and democratic deficit. Reference Bartlett, B. (2012). The True Burden of the Government.” Business Day 18 December. Booner, B. (2012). This Is Why America Is Broke, Magazine Week 19 December 2012. Doole, I. & Lowe, R. (Ed.). (2008). International marketing strategy: analysis, development and implementation. Stamford: Cengage. Ellis, K. and Singh, R. (2010). Political Economy Factors affecting efficient functioning of Markets. Trade Hot topics, 1(73). Goddard, G. J., and Ajami, R. A. (2006). International business: theory and practice, New York: M.E. Sharpe Heskett, J. (2012). Are Factory Jobs Important for the Economy? Harvard Business School, 28 March. 2012. Maria, S. A. and Cecilia, A. H. (2005). Hindered growth: The ideology and implications of population assistance. International Journal of Social Economics, Vol. 25, no. 9, pp. 783 – 812. Meny, Yves (2003). De La Democratie En Europe: Old Concepts and New Challenges. Journal of Common Market Studies, Vol.41, no. 1, pp. 1-13. DOI:10.1111/1468-5965.T01-1-00408 Williamson, C. (2012). Back to the Basics: Business 101, Washington: CreateSpace. Read More