State Intervention Advantages And Disadvantages

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INTRODUCTION A number of scholars, social scientists including economists, have battled with explaining the role played by the government or state intervention. State intervention is the bedrock of the country to try to amend and help in the economic activities and society. To help keep prices of goods, rents and wages at an appropriate level without being too expensive or too cheap with the help of parastatals in the country. According to Mostert (1996), state intervention is established through taxes and investments. The state intervention is influenced by the theory of developmental state (Hope & Somolekae, 1998). To give a broader understanding of state intervention this essay will discuss in the context of Botswana the advantages and disadvantages…show more content…
Botswana has promoted rapid economic growth without abandoning democratic norms and practices, its state in the political elite stand has achieved economic growth within the context of democratic rule (Hope & Somolekae, 1998).To achieve the Botswana state objectives Hope and Somolekae explain how a series of laws were enacted to concentrate ‘sufficient power and autonomy’ at the center, in the form of inter alia, the District Council’s Act, Matimela (stray cattle) Act, Chieftainship Act, Mineral Rights Act and others. All these acts were then removed and their powers were vested either with the central government or local government authorities (Hope & Somolekae, 1998). In this process of centralization of political power and decision making Botswana created a reasonably honest and competent bureaucracy, which currently is enjoying their ability to formulate and efficiently execute national development projects well in time (Hope & Somolekae, 1998). This shows how the state abiding by the law and promoting a powerful bureaucracy has helped stimulate the rapid economic growth. To add on Leicht and Jenkins (2009), states that Botswana is amongst the countries that have impressively gained economic growth, and says how this was made possible by the state intervention, as such making the neo-liberal perspective weak on such…show more content…
In addition Bruton, Banerji, and Hill (1996) explains how Botswana has avoided market failure, example in the health sector the government identified equity as the market failure. According to Rabin (2003), market failure examines the operation of the economy and prescribes government intervention when markets “fail” on the grounds of either economic efficiency or equity. The government believed that if health care was left to the market, it would be much better in urban areas than for the rural areas and for very poor Batswana everywhere (Bruton, Banerji, & Hill, 1996). So the government intervened and insisted that basic health care should be available to everyone and that no one should have superior care, at least within the borders of the country (Bruton, Banerji, & Hill, 1996). To continue Bruton, Banerji, and Hill (1996), explain that the state intervention in the market has corrected market failure, which shows how the private sectors being the market would not have been able to meet the health care objectives, the private sectors could not have turned out sufficient nurses without the help of government support. This clearly shows how the state intervention has helped in the social equity of the economy and
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