Alexander Salter 0 Economic efficiency is one of the most important concepts economists use to classify and understand the social world. Unfortunately, it is also one of the most misused. There are two aspects of economic efficiency, the positive and the normative, both of which must be understood in order to apply the concept fruitfully.
Potential benefits[ edit ] The service sector is probably the most liberalized of the sectors. Liberalization offers the opportunity for the sector to compete internationally, contributing to GDP growth and generating foreign exchange. As such, service exports are an important part of many developing countries' growth strategies.
India's IT services have become globally competitive as many companies have outsourced certain administrative functions to countries where costs are lower. Furthermore, if service providers in some developing economies are not competitive enough to succeed on world markets, overseas companies will be attracted to invest, bringing with them international best practices and better skills and technologies.
Some argue foreign providers crowd out domestic providers and instead of leading to investment and the transfer of skills, it allows foreign providers and shareholders "to capture the profits for themselves, taking the money out of the country".
This is also supported by the anthropologist Trouillot who argues that the current market system is not a free market at all, but instead a privatized market IE, markets can be 'bought'.
Other potential risks resulting from liberalisation, include: Risks of financial sector instability resulting from global contagion  Risk of environmental degradation  Risk of a debt spiral due to decreased tax revenue among other economic problems oftentimes linked to IMF restructuring though the state government in Kansas is currently encountering this issue.
For example, according to the anthropologist Lilu Abu-Lughod we see increased gender inequality in new markets as women lose labor opportunities that existed prior to market liberalization. However, researchers at thinks tanks such as the Overseas Development Institute argue the risks are outweighed by the benefits and that what is needed is careful regulation.
Yet such concerns could be addressed through regulation and by a universal service obligations in contracts, or in the licensing, to prevent such a situation from occurring. Of course, this bears the risk that this barrier to entry will dissuade international competitors from entering the market see Deregulation.
Examples of such an approach include South Africa's Financial Sector Charter or Indian nurses who promoted the nursing profession within India itself, which has resulted in a rapid growth in demand for nursing education and a related supply response.Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship.
The two are not mutually exclusive. In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. In some economies the development of transportation, power, and other utilities has been.
There are two main strains of thought on economic efficiency, which respectively emphasize the distortions created by governments (and reduced by decreasing government involvement) and the distortions created by markets (and reduced by increasing government involvement).
The point to be emphasized in this paper is that if one starts with a different view of efficiency and market optimality, an entirely different set of conclusions relative to government intervention The Austrian Theory of Efficiency and the Role of Government | Mises Institute.
Economic efficiency is one of the most important concepts economists use to classify and understand the social world. Unfortunately, it is also one of the most misused.
There are two aspects of economic efficiency, the positive and the normative, both of which must be understood in order to apply. Jan 01, · The Role of the Energy Sector in Job Creation.
Maximizing the Economic Benefit from Traditional Energy. Economic Benefits of Renewables. Thus at Venice the College, even in the absence of the Doge, is called "Most Serene Prince." The Palatine of Posen, father of the King of Poland, Duke of Lorraine.