1. "Both the Market Friendly Approach and the Government Planning System Have Been Debatable Issues."
Introduction
While most economists would agree that the government can play a significant role in promoting economic development, there are fewer assents regarding the specific nature of the government Intervention. Opinions on this issue tend to be polarized in two highly contrasting approaches but well-established views: the government planning and the laissez-faire views. The economists who support government planning view argues that an active government involvement in mobilizing and allocating financial resources, including through government ownership of financial institutions, is needed to broaden access to credit, as private markets fail to expand access .Government planning system was one of the approaches that took place in the world economies in the 60’s where its principles are undertaken from the Keynesian economics. Where it lead to the success of the economies of many countries however it also pushed back thrones. Planned economies exist in very few countries such as Cuba, Libya, North Korea, Saudi Arabia, Belarus, and Myanmar. In the contrary, the economists who support laissez-faire view argues that governments can do more harm than good by intervening directly in the market system and argues that government efforts should instead focus on improving the enabling environment .this approach states that government generally should not interfere with decisions made in an open competitive market. These decisions include policies such as setting prices and wages. According to laissez-faire, workers are most productive and a nation’s economy functions most efficiently when people can pursue their own economic interest freely. The economy of the United States is close to being a laissez-faire system. Due to the contradiction and the differences in the points of view, a third view appeared which is emerging in the middle ground, favoring direct government interventions in non-traditional ways. This view, which we denominate market friendly approach,
While most economists would agree that the government can play a significant role in promoting economic development, there are fewer assents regarding the specific nature of the government Intervention. Opinions on this issue tend to be polarized in two highly contrasting approaches but well-established views: the government planning and the laissez-faire views. The economists who support government planning view argues that an active government involvement in mobilizing and allocating financial resources, including through government ownership of financial institutions, is needed to broaden access to credit, as private markets fail to expand access .Government planning system was one of the approaches that took place in the world economies in the 60’s where its principles are undertaken from the Keynesian economics. Where it lead to the success of the economies of many countries however it also pushed back thrones. Planned economies exist in very few countries such as Cuba, Libya, North Korea, Saudi Arabia, Belarus, and Myanmar. In the contrary, the economists who support laissez-faire view argues that governments can do more harm than good by intervening directly in the market system and argues that government efforts should instead focus on improving the enabling environment .this approach states that government generally should not interfere with decisions made in an open competitive market. These decisions include policies such as setting prices and wages. According to laissez-faire, workers are most productive and a nation’s economy functions most efficiently when people can pursue their own economic interest freely. The economy of the United States is close to being a laissez-faire system. Due to the contradiction and the differences in the points of view, a third view appeared which is emerging in the middle ground, favoring direct government interventions in non-traditional ways. This view, which we denominate market friendly approach,