Just a Thought off-the-cough.

Development progresses favorably when development economics is set right.  It is necessary to delve more vigorously probing into the structure of the economy for balancing the investment with informed decisions.

The world economic environment has always been changing and in a changing environment no one can afford to remain independent or do it other way round from what the rests are doing.  The winners are those who focused on their own nature as every nation has its own geographic advantage, endowment of resources, culture, heritage and history.  Capitalizing on one’s own nature, the prosperity has been realized with right policies particularly on having institutional sufficiency and ensuring their competence and resilience. 

One way to approach development is to appreciate as why certain societies prosper with certain institutional structure, while others are not.  It sounds like an anthropological question but it matters.  The bonds between policy and prosperity, and transformation and transparency needs to be understood and it needs to affirm what is being done is right and seen right. 

The institutional sufficiency determines the performance of the economy but what determines the efficiency of the institutions is a central question which many would like to answer.  The institutional innovation and dynamism, besides others, has always demonstrated the ability to ensure sustainable development progress in a changing environment.  The enabling institutions are able to foresee the changing situation and adapt before the impact is experienced.  It is indeed the gap between what is to be done and being done has universally determined the economic prosperity.

Looking at the history, it is evident that different developed nations have developed differently.  The differences have been determined by the situation and circumstances, inherent potential and advantages to which they have capitalized.  But their focus on institution has been universally specific.

The development economics is more than just growth theory.  It is a path of balanced growth, changing the structure of the economy where it has remained unchanged.  It is inclusive and it is morphological.  It is about prosperity and happiness for all.  It is incredible. 

What is important in the developing economies is the composition of the economic activities with varying weightage on output, employment and factor use.  The successful economies have always focused on output and employment.  Those who focused on results have succeeded while those focused on processes lost on the process itself. 

Growth is the surest way of alleviating poverty but poverty can rebound with its vitality if institutional and organization development is not well attended.  The most vetted strategy for poverty alleviation has always been the human capital development and the endeavor to accomplish transcends the entire machineries of development.

It cannot be denied that world economy is in the era of export led growth moving from market economy to free market economy.  In such a situation and circumstance, a reflexive policy would justify every developing nation having an economic model apt for safeguarding its producers and consumers through appropriate checks and balances with tariffs and subsidies.  Investment on such checks and balances should be accounted as investment for sustainable growth and security for no one has left free space for free market. 

In dealing with tariffs and subsidies the bigger picture must not be overlooked.  For instance, it is well known that the insecticide-treated bed nets (ITNs) are extremely effective in controlling Malaria cases.  The question is whether or not it should be subsidized or given free.  The provision of INTs with or without subsidies or given free, needs to be weighed against the bigger picture that Malaria cases have been reduced and several lives saved. 

What is needed is a conclusive convergence of macro and micro economics.  Neither should overshadow the other, nor looked differently and treated separately.  A new thinking on economic growth and development is being offered by Harvard Kennedy School.  But it too cannot be a panacea for all.  The ideological approach to policy making is good but pragmatic approach is relevant.