World Bank suggests some structural reform policies for the poor-00780
This subjective question is related to the book/course
vu cs504 Software Engineering - I.
It can also be found in
vu cs504 Mid Term Solved Past Paper No. 3.
World Bank has suggested following policies for the poor countries to grow,
1. Governance and administrative reforms: To reduce over employment in public sector, reduce wastes and to improve the quality and reliability of public services. To strengthen the administration of taxes, to eliminate the corruption. To decentralize the control of fiscal policy making. To enrich the legal and regulator framework.
2. Privatization of state-owned enterprises: Abbreviated as SOEs. These are influenced by political interference and it is one of the reasons SOEs are considered inefficient. SOEs are also suffering form lack of competition, cost awareness and fear of bankruptcy.
3. Financial liberalization: It involves ending of financial repression policies including artificially low interest rates, credit rationing, restrictions on banking competition and government involvement in investment allocation
4. Liberalization of prices, removal of subsidies
5. Deregulation involving dismantling of licensing systems and red-tape
6. Trade liberalization: including tariffication of non-tariff-barriers, harmonization of tariffs and an eventual reduction thereof
7. FDI liberalization: To create a transparent, predictable environment for foreign investors to operate in.
8. Capital account liberalization: To remove controls on capital flows
These policies are suggested by world bank and the successful implementation of these policies depend on the political and economic system of poor countries. In general these policies are expected to provide the poor nation with better understanding and help them to raise their growth.
