By Boris Pleskovic, Michael Bruno
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Additional resources for Annual World Bank Conference on Development Economics 1996
Participants' affiliations identified in this volume are as of the time of the conference, April 2526, 1996. The findings, interpretations, and conclusions expressed in this volume are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address in the copyright notice above.
Provided adequate competition policies are put in place, market competition is more Page 18 effective in providing incentives than is ersatz public competition. The question is whether, and how, the public sector can put in place an effective set of incentives. We must also recognize that the role of government is not static. Changes in the economic environment fundamentally alter what the government can and should do. In a world with limited international trade, for example, it might have made sense for countries to worry about material balances, and there might have been some rationale for the kinds of planning exercises that once dominated development thinking.
Second, in the transition economies large firms traditionally provided much of the social safety net (such as pensions and health care). The transformation of these economies is being accompanied by the shedding of these social responsibilities by corporations facing new competitive pressures. The government is the only backstop. Special Role of Government in Developing Economies Government needs to function in the six capacities I have delineated in all types of economies. 4 Assessing the appropriate role of government requires recognition of both the need for and the limitations of government action.
Annual World Bank Conference on Development Economics 1996 by Boris Pleskovic, Michael Bruno