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Why are state approaches occasionally considered as unsuitable for promoting development?
Liberal economists’ argument government intervention really thwarts development.
Government decides or affects through subsidies and tariffs what how and for whom to make. But it includes:
• Making a group of planners who may create key economic decision but frequently have incomplete information or lack of experience which resulting into: Wrong selection of investment projects:
a. Ineffective implementation and management of such projects
b. Unsuitable pricing and costing of output thereby distorting markets
c. Institutional weaknesses; inadequate and unreliable data
• Planning may be influenced by privileged and powerful groups which act into their own sectional interests
• Extensive regulations make opportunities for corruption and bribes.
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Consider the economy (above) again where the following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4) for the prices (p 1 , p 2 , p 3 )=(1, 1, 1).
“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.
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