Page 46 - UDYAMA FINAL final for web

need for policies, not only for oped countries are able to apply ribed as ‘active’ and ‘passive’
sector under consideration but capital intensive technology whi- (Jenkins and Henry, 1982). Pas-
also for the many political impli- le developing countries apply lab- sive involvement is necessary
cations of that throughout all our intensive method as they face general arrangements and not sp-
areas. As stated earlier, policy lack of capital. Public policy ecially intended to influence sect-
objectives must be related to nati- should aim at maximise economic oral development. For examples,
onal development objectives. Wi- benefits such as full employment, infrastructure development of the
thout state intervention, develop- price stability, and a more even country needs essential attention.
ment will likely lack the cohesion distribution of income and wealth Hence the government needs to
and direction necessary to sustain (Seder and Harrison, 1994). Mor- ensure normal routine for local
itself in the long term. Thus, eover, it aims at the contribution and international activities. Mor-
government involvement is often to the balance of payment by eover, establishing government
desirable for setting and carrying increasing diversification of exp- agencies and lower level bodies
out that policy. orts and foreign currency earn- like departments, authorities, bo-
ings. Therefore, a policy is need- ards, etc. may be other passive
First, a policy should be made to ed to maximise the benefits to involvement of the government.
determine the type of product, economic development in terms
which can be supplied efficiently. of foreign exchange earnings,
This is because the relative impor- government revenue, employ-
tance of the alternative types of ment, income and regional devel-
products and their size and physi- opment. Government involve-
cal diversity. For example, tea can ment in policy formulation is
be supplied efficiently in Sri Lan- necessary to balance social cost
ka while wheat can be efficiently and benefits.
supplied in USA. Second, the go-
vernment needs to develop a Role of Government in policy
policy for determining the type of
product which should be supplied formulation “
or what to produce as there are A policy is needed to
barriers in developing certain According to the researchers, maximise the
types of products in a country policy should be determined pri-
since authoritative decision-mak- marily by considering the nation- benefits to economic
ers are bounded by economic, al economic policy and therefore development in
socio-cultural and environmental the government is responsible for
conditions. For example, some formulating general policy obje- terms of foreign
Islamic countries such as Pakistan ctives and developing national exchange earnings,
and Indonesia do not encourage planning strategies. The intensity
government
gambling. Some countries have of the role of government, how-
restricted any type of develop- ever, depends on the political revenue,
ment in certain areas for conser- economic system. In centrally pl-
vation or cultural reasons. Third, anned economies, governments employment, income
there should be a distribution are involved heavily in tourism and regional
policy or whom to produce, for activities whereas in mixed mar-
various reasons. Since many ket economies, the government development
involvement may be minimal. In
countries have inequality among government has commonly acce- ”
people, limited products should spite of great political diversity,
be made available to different
income level groups. A policy is pted some tourism roles.
needed to determine which type
of technology might be attracted Nature of government
to production process. The type of
technology is determined by sev- Involvement
eral factors such as resources
available, and the diffusion of The nature of government inv-
innovations. For example, devel- olvement can be usefully desc-

44 January 2021