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Who Is The Master? Who Is The Servant? Market Or Government? An Alternative Approach: Towards A Coordination System

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  • S.M. SHAFAEDDIN

Abstract

The main purpose of this paper is to discuss the limitations of the market and the risks of government failure, and to present an alternative approach on coordination of economic activities by introducing the concept of “coordination system”. In such a system, economic activities are coordinated by market, firms and government requiring the availability of “non-price factors” such as infrastructure, institutions and organizations. This approach is practical, country specific and dynamic. It is practical because it is based on the realities of the world economy and the situations of developing countries. It is country specific because the relative role of each coordination mechanism – market, government and enterprises – changes from one country to another, depending on their level of development and other socio-economic characteristics. It is dynamic because in each country the relative role of each mechanism changes over time during the course of economic development of the country.

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  • S.M. Shafaeddin, 2004. "Who Is The Master? Who Is The Servant? Market Or Government? An Alternative Approach: Towards A Coordination System," UNCTAD Discussion Papers 175, United Nations Conference on Trade and Development.
    • Handle: RePEc:unc:dispap:175
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    2. Shafaeddin, Mehdi, 2006. "Is The Industrial Policy Relevant In The 21st Century?," MPRA Paper 6643, University Library of Munich, Germany.

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