"national objectives are being pursued by our government in order to achieve the social and economic uplift of our people"justify the statement
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Answer:
Explanation:
The Concept of National Economic Strategy
Bruce R. Scott
Harvard Business School
National economic strategy, as used in this paper, comprises a vision of a desired future state of the economy, a time frame within which that state is to be achieved, and a set of policies and institutions for influencing the mobilization and allocation of resources and for promoting their efficient utilization. As with firm strategy, the vision provides the frame of reference for establishing priorities for the mobilization of resources as well as the fractions to be allocated across various product markets. Also like firm strategy, national economic strategies are articulated and implemented through institutions. The structure and culture of these institutions determine in considerable measure how the strategy will be implemented as well as its potential effectiveness.
Economic strategies can influence economic performance by influencing the volume and structure of resources (supply), the volume and structure of demand, and/or the distribution of incomes. With governments around the world consuming from 10 to 30 percent of gross domestic product (GDP), and spending additional amounts as transfer payments, it is hard to imagine a circumstance in which governments do not have an important influence on the mobilization of resources. Recognizing that this involvement is inevitable, a baseline strategy might be one in which government aimed to raise and spend those funds so as to have the minimum impact on private decisions, whether on resource mobilization or allocation. This would mean, for example, that there would be no ''targeted" tax breaks for any industries or groups of people. The economic rationale for this strategy would be that the market knows best. If, on the other hand, one recognizes that markets are imperfect, an economic strategy can conceivably enhance economic performance by promoting
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Suggested Citation:"The Concept of National Economic Strategy." National Research Council. 1997. International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings. Washington, DC: The National Academies Press. doi: 10.17226/5902.×
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more (or less) resource mobilization,
more effective allocation of those resources across sectors of the economy and among economic actors, and/or
more efficient utilization of resources by the various economic actors.
A vision helps establish goals that in turn animate an economic strategy. A vision of achieving economic and/or political equality with other nations is fundamentally different from one of achieving maximum consumer purchasing power today, let alone increased equality or increased security of incomes. The former is likely to justify "exceptional" levels of resource mobilization and personal responsibility, whereas the latter typically would not. Government intervention to promote increased security of incomes is apt to involve transfers that promote consumption while at the same time relieving individuals of a measure of responsibility for their own welfare. Thus, economic strategies are based on differing roles and responsibilities for the economic actors as well as differing notions of resource mobilization and allocation.
Economic strategies can employ more or less direct means to influence the mobilization and disposition of resources and the incomes they generate. Within a given economic structure the efficiency of resource utilization seems best promoted indirectly, as suggested long ago by Adam Smith and others, by ensuring that markets work effectively. High levels of resource mobilization, in contrast, typically require more direct government intervention, such as "forced" saving or higher standards of admission for university entrance, a point that is central to the analysis of the producer orientation described below. High levels of resource mobilization can achieve increased growth rates, but often because seemingly high levels of labor productivity are offset by low level of return to capital. High-growth, based at least in part on high total factor productivity, seems to require shifting the structure of an economy from current advantages and opportunities toward those of the future, for nations as it does for firms. It is no accident that the high-performing Asian countries