4. Market Mechanism Allocative and productive efficiency is achieved through the assumptions of perfect competition, as purported by Adam Smith- laissez-faire approach :

13. Externalities Externality: A third party (spill-over) effect arising from the production and/or consumption of goods and services for which no appropriate compensation is paid.

19. Government Intervention Market failure presents a rationale for government intervention in markets – the pursuit of individual self interest rarely results in maximum social welfare.

28. Public Enterprises One way in which government seeks to correct market failure and provide public goods is through public enterprises

29. Public Enterprise A goal oriented and revenue generating entity owned or controlled by the government. Its objective is to act as an instrument of growth, development and redistribution in society. It may be an autonomous/semi-autonomous commercial organisation in the public sector

31. Public Enterprise Classification Promotive (BIDC) Regulatory Replacive (Insurance)

32. Public Enterprise Structure: -Board of Management -CEO -Middle Management -Staff

34. Government Failure These problems resulted in government failure (see Downes, Margetts)

35. Regulatory Management One of the interfaces between the private and public sectors is through regulation (see introduction)

36. Regulatory Management -Is seen as an important instrument to public sector entities to enforce compliance with nationally established development objectives

37. Regulatory Management This has a positive and negative aspect. The regulatory function involves the executive, legislative and judicial powers Executive-Formulate policies Legislative- make laws and provide for sanctions Judiciary-applies, interpret and enforces

38. Regulatory management-Issues Management Staff/Infrastructural Support Outdated legislation Lack Teeth (toothless tiger) Small Societies Economic Power Standardisation Unequal relations

39. Neo-liberalism A response to government failure. It purports that underdevelopment results from poor resource allocation, incorrect pricing policies and too much state intervention

40. Neo-liberalism Developing countries are underdeveloped, not because of predatory actions of TNCs and international agencies, but due to the “heavy hand of the state”, corruption, inefficiency and lack of economic incentives

41. Neoliberalism There is no need for international economic reform or increases in foreign aid. It is the government interference and resulting distortions in product and financial markets that reduce efficiency.

42. Neoliberalism Government must allow the magic of the marketplace and the invisible hand of market prices to guide resource allocation and stimulate economic development (Adam Smith?)

44. Neo-liberalism Public Choice Theory:Government can do nothing right. Politicians and bureaucrats are only concerned with self-interest (rent seeking behaviour) They use government resources to consolidate and maintain position of power and authority

46. Neoliberalism The International Monetary Fund and World Bank are advocates of the neoliberal thinking, as manifested through structural adjustment programmes.

47. Based on Caribbean examples, what is a SAP and what impact has there been on economic growth and development?

48. Public Enterprises One way in which government seeks to correct market failure and provide public goods is through public enterprises

49. Public Enterprise A goal oriented and revenue generating entity owned or controlled by the government. It s objective is to act as an instrument of growth, development and redistribution in society. It may be an autonomous/semi-autonomous commercial organisation in the public sector

52. Regulatory Management One of the interfaces between the private and public sectors is through regulation (see introduction)

53. Regulatory Management -Is seen as an important instrument to public sector entities to enforce compliance with nationally established development objectives

54. Regulatory Management This has a positive and negative aspect. The regulatory function involves the executive, legislative and judicial powers Executive-Formulate policies Legislative- make laws and provide for sanctions Judiciary-applies, interpret and enforces

56. Neo-liberalism A response to government failure. It purports that underdevelopment results from poor resource allocation,incorrect pricing policies and too much state intervention

57. Neoliberalism Government must allow the magic of the marketplace and the invisible hand of market prices to guide resource allocation and stimulate economic development

59. Neo-liberalism Public Choice Theory: Government can do nothing right. Politicians and bureaucrats are only concerned with self-interest (rent seeking behaviour) They use government resources to consolidate and maintain position of power and authority

61. Neoliberalism The International Monetary Fund and World Bank are advocates of the neoliberal thinking, as manifested through structural adjustment programmes.