How does the dilemma development influence the economies of the different nations of the world?
Many economies of the world experience development dilemmas that have influenced their economic status. The first paragraphs describe the causes of development dilemmas in the various nations of the world according to the three different authors. The rest describes the factors that result in the development dilemma in a given situation and how nations put up initiatives to deal with the dilemmas.
Development dilemmas in many economies have been due to the local and global issues being experienced. The local issues according to Fisman and Miguel include corruption, poverty, violence, and the natural calamities. The global issues entail the global financial/economic crisis, global depression, capitalism, world wars, technological advancement, trade liberation, and capital market situations. The global issues have been much highlighted by Birdsall and Fukuyama. The economies of the developing nations have been negatively influenced by the culture of corruption thus limiting the achievement of development. The citizens of these countries are law abiding though corruption has taken over and has been considered as the norm. The governments of these nations must manage their citizen’s needs that are a challenge to development. Violence destroys development initiatives and thus for economic growth nations should embrace peace for their development and prosperity (Fisman and Miguel, pp. 76 – 81).
A global depression has negatively impacted on the world’s economy and politics. The Great Depression, for instance, paved the way for radicalization and anti-liberal movement over the world (Birdsall and Fukuyama, pp. 45). Capitalism, in essence, has been the main focus of most of the developing who have adopted the capitalist model. The risks associated with market-led economy globally have called for the adoption of a financial regulation to cushion against any risks associated. Nonetheless, the financial crisis has affected the economy and development of the states of the world. The countries try to cushion themselves by reducing their foreign finance market exposure. They do this by accumulating a large share of foreign currency reserves and regulating their banking sector. This insulates them from the volatility of the global economy and crisis that may occur (Barma and Vogel, pp 430 – 435).
The development agenda has a basis in the local governance systems, property rights, individual abilities and the relationship within and beyond. The social and cultural norms also play a part in the real world practices and the reform agenda. The dilemma in development thus revolves in organizing the above situations into effective and efficient adaptive frameworks. The advanced industrial nations have had contemporary debates on their deregulation and the transitional economies are being privatized. In essence liberalization of economies is being adopted by most of the developing nations. The development agenda is currently in a dilemma due to the revolutions in the information technology sectors and innovations. The globalization has also opened up opportunities with threats that have influenced economic development of nations.
The development of the nations who store their wealth in reserves thus is in a dilemma as the future is not certain and that the plans are not well implemented. The emerging global markets offers better opportunities for trade, and thus involvement in such ventures have better economic returns. This promotes development among nations that utilize their wealth well instead of holding them in reserves. Trade efficiency and flexibility through a more free market model have been promoted by the domestic policies that as a result have ensured a greater resilience at the wake of the pressure from competition and the economic trauma globally. More support to the domestic industries thus has to be enhanced while keeping at a minimum the social disruptions (Birdsall and Fukuyama, pp. 46).
The notion that the developing nations will benefit much from the great inflows of the foreign capital has been demystified since the finances were given out as loans that had to be paid back with interests. The developing nations hence created revenues to the financiers and dismantled their own exchange rate control. Full capital mobility is unclear hence the benefits from the global free trade are minimal. The free capital market ought to efficiently allocate their capital, but usually the financial institutions, unlike the manufacturing firms, take risks that impose heavy externalities on the economy. The open capital market is, however, a disaster and has been seen to cause the financial crisis in many nations. To be cautious it necessary to liberate the capital market while having a regulatory framework in place.
Social policy and wellbeing of the citizens has been a consequence of the developing countries. The activities of development are usually geared towards the social and political benefits of the people themselves. Economic efficiency was initially favored to the safety and social insurance of the citizens. This ensured discipline and social spending cuts. Capitalism has been seen as a faulty endeavor that results in threatened livelihoods and thus it is the sole duty of the government in place to provide social protection to her citizens. The struggle to maintain a social and political stability is among the country’s influence on the development agenda. Poverty situation has influenced the achievement of the sustainable economy as they poor would be inactive and to sustain them will be expensive. The management of health to ensure a healthy population also is part of the considerations in the developing countries. Natural disasters and calamities also contribute to the influx of the development dilemma. Good industrial policies are vital for the development. The industries contribute much in the development agenda, and their success determines the economic sustainability of a nation. Leaders have to come up with policies that promote the economy and ensure that the livelihoods of the population are well catered for. The creation of a public sector that is efficient and effective amid the bureaucracies is vital for any economic development (Birdsall and Fukuyama, pp. 48-50).
The future holds bright for the developing nations and is a roadway towards success resulting in multi-polar economies. The end of the economic dominance of a single nation, for instance, the United States of America dominating the global affairs is certain to happen with the increasing polarities. The entry of other players into the developed economies will help in providing significant economic resources and ideas to the developing nations. Development is now being shifted to the poor who struggle to achieve unlike in the era where the rich bestowed on the poor.
In conclusion, development dilemma is caused by the negative forces that affect the wellbeing of a nation. These dilemmas have a detrimental effect on the economic growth as development become stagnant or insignificant. To deal with the situation amicably, proper policies and strategies ought to be adopted by the leaders of the world. This will help in solving the dilemmas and thus promote economic development. Globalization offers greater opportunities and markets to the developing nations thus development dilemmas ought to be solved to benefit much from the global offers.
Birdsall N., and Fukuyama F., The Post-Washington Consensus, Development after the Crisis, Foreign Affairs, Volume 90 No. 2 March /April 2011
Fisman R., and Miguel E., Corruption, Violence, and the Powers of Nations, Economic Gangsters, Princeton University Press, 2008
Barma H. N. and Vogel S. K., Markets as Institutions, The Political Economy Reader,