solutions to resolve development and indebtedness

Question 1

indebtedness and solutions

Answer 1

-persistent current account deficit and 3rd world debt crisis
solutions: debt relief, reschedule debts, debt swaps (UNICEF debt for child relief), cancel debts

Question 2

market based policies and development

Answer 2

-examples: promote FDI, privatisation, deregulation, trade lib
-benefits: more efficient resource allocation, incentives from comp, encourage FDI
-infrastructre( at same level of public sector), markets unlikely to efficiently certain goods and services , market failures (environemnt), income inequality, protectionism in advanced

Question 3

interventionist policies and development

Answer 3

examples: import sub, protectionism, exchange rate intervention, regulation
-benefits: infrastructure development, government major employer and investor in human capital, stable macro, welfare state
-bureaucracy: corruption and inefficiency, nationalised industries inefficient, rise in gov spending