How State Interventions Impact Free Markets Essay

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DevelopmentalismDevelopmentalism is a policy approach that emphasizes the role of the state in promoting economic growth and improving living standards by way of supporting a strong internal domestic market and using tariffs to keep imports from upsetting or undermining that internal strength. It emerged predominantly in the 1940s and 1950s in response to the Great Depression and World War II, and was widely adopted by developing countries during the post-war period. Developmentalism typically involves state intervention in key sectors of the economy, such as infrastructure and manufacturing, in order to promote industrialization and economic development (Klein, 2007). While developmentalism has come under criticism in recent years for its sometimes negative social and environmental impacts, it remains an influential approach to economic policymaking, particularly in the Third World.Developmentalism is best understood as a political-economic doctrine that emphasizes the industrialization of developing countries. The goal of developmentalism is to promote economic growth and modernization by encouraging import substitution, state-owned enterprises, and investments in infrastructure, through formal structures in which diverse populations are obliged to use the same language and concepts (Smith, 1985).

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While developmentalism has led to some impressive economic achievements, it has also been criticized for its reliance on state planning and its failure to take into…

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…ultimately damage the economy. Yet, that is what developmentalism risks allowing to happen.One of the main strengths of developmentalism in the Third World is that it emphasizes investment in human capital. This includes investment in education and health care, which can lead to a more productive workforce. In addition, developmentalism stresses the importance of infrastructure development. This can create jobs and spur economic growth. Also, developmentalism can promote industrialization and technology transfer, which can help Third World countries to become more competitive in the global economy (Yu et al., 1996). While there are criticisms of developmentalism, it remains an important theory that has had a….....

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