The role of wto in growth and economic development
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Although it has taken substantial advantages, the current wave of globalization has combined massively different economies at different stages of development. Developed and developing countries similarly, are hit with market failures. In many cases integration can lead to the globalization of market disaster – in other words, economic distortions (Gallagher, 2005). According to economic theory when the market claps, policy tools should be organized to correct the distortions shaped by private markets (Lipsey and Lancaster, 1956). According to Rodrik (2003), the economies of a market are based on a wide variety of non-market institution that regulates, legitimize and stabilizes the economy. Most of these non-market institutions include governmental and public institution. They serve like the backbone of the economy. A research conducted by Acemoglu (2000) concludes that the quality of the public institutions of any country determines its short term and long term development.
Institutional diversity has in fact a more important implication (Rodrik 2003). According to author, there is no single plotting between a good working market and the form of non – market institutions required to sustain it, as is clear from the wide variety of supervisory, steadying and legitimizing institutes in today’s progressive industrial cultures. Rodrik (2003) give the example of American style of capitalism and Japanese style. They both are different each other and also differ from the European style. And even within Europe, there are huge variations between the institutional arrangements like in Sweden and Germany. Over the long term, each of these systems has accomplished equally well (Rodrik, 2003).
Rodrik (2003) also raise the question that why were certain republics adjust their macroeconomic policis faster than other countries? According to him the real determinants of development performance after the 1970s are based on the capability of national institutions to be able to manage the distributional battles prompted by the external jolts of the period. Whether successful or not, the social clashes and their management plays an important role in spreading the effects of external economic performance shocks . Countries with poor establishments for conflict management are proved to be worse in managing shocks (Rodrik 1999).
Institutional diversity has in fact a more important implication (Rodrik 2003). According to author, there is no single plotting between a good working market and the form of non – market institutions required to sustain it, as is clear from the wide variety of supervisory, steadying and legitimizing institutes in today’s progressive industrial cultures. Rodrik (2003) give the example of American style of capitalism and Japanese style. They both are different each other and also differ from the European style. And even within Europe, there are huge variations between the institutional arrangements like in Sweden and Germany. Over the long term, each of these systems has accomplished equally well (Rodrik, 2003).
Rodrik (2003) also raise the question that why were certain republics adjust their macroeconomic policis faster than other countries? According to him the real determinants of development performance after the 1970s are based on the capability of national institutions to be able to manage the distributional battles prompted by the external jolts of the period. Whether successful or not, the social clashes and their management plays an important role in spreading the effects of external economic performance shocks . Countries with poor establishments for conflict management are proved to be worse in managing shocks (Rodrik 1999).
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It aims to liberalise international trade
Removing trade barrier helps in growth and economic and development
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