What is the primary composition/ownership pattern of the private sector in most developing countries? Is the existing ownership pattern a major constraint towards building appropriate institutions for market efficiency? Why or why not?
Governments, both in the developed and developing countries, should create policies that support institutions that foster the efficiency and stability of their market. All countries should focus on creating standards that protect citizens and prevent the introduction of harmful products that affect human health. In Tanzania, for instance, institutions are expected to have a quality inspection at a fee (Tanzi, 2011). In the agricultural sector, all imports and expert are registered by the Tanzania Food and Drug Authority. Tanzanian Atomic Energy Commission conducts the final inspection before the products are released to the people. It is also the responsibility of the government to train and educate its citizens in order to make them understand the market and their roles in improving the efficiency of the market. Liquidity problems are faced by most developing countries due to limited budget allocation by serving governments. In order to create efficient markets and institutions, governments are expected to secure financial viability.
The private sectors, in most developing countries, consist, of partnerships that involve large organizations. This form of ownership has steered development in poverty-stricken countries because it creates funds for institutions. When partners in an institution or a well-known company implement this, it is easily accepted by the local community. Such companies also help the institutions to raise funds so that they can attain a large number of people. Due to the fact that most companies seek to improve public relations, there are more opportunities for institutions to partner with such companies in order to achieve mutual benefit.
In the textbook of Todaro and Smith (2012), it is noted that the burden of corruption falls disproportionately on the poor. Therefore, combatting corruption could be one of the development strategies for reducing poverty. To what extent does this strategy appropriate in reducing poverty in a developing country? Provide examples in your response.
Combating corruption helps in reducing poverty in developing countries. Corruption affects all government sectors because it heavily relies on a country’s leadership (Spector, 2005). Nigeria is one of the developing countries that suffer from poverty because of corruption. Other developing countries that were at the same level as Nigeria such as Rwanda, have now improved their economy due to new incorruptible leaders. Currently, Rwanda is trying to use its resources to connect to all African countries and do business with them. As a result, it has its own airline that connects to most African countries. However, it takes longer to register a company in Nigeria than in Rwanda because one is expected to pay bribes to the registrar before completing the registration. This hinders foreign investments hence the country cannot easily improve its economy. A country’s resources are equally distributed in a corruption-free environment hence the gap between the poor and the rich becomes small (Spector, 2005). By fighting corruption, a government can create room for foreign investors who work with government institutions to create market efficiency.
As an agent of economic development, in what areas do NGOs have a comparative advantage, compared to governments or markets? Provide examples of success stories of NGOs in some of those areas of advantage.
As an agent of economic development, NGOs have taken advantages of partnership benefits to provide their services to both accessible and inaccessible population (Brinkerhoff, 2002). Business Alliance for Food fortification has strengthened food fortification in poor countries through funds from partners. The NGO is jointly funded by an institute in the World Bank and Global Alliance for Improved Nutrition (GAIN). Coca-Cola, Unilever, and Danone also co-chaired the partnership deal (Elyachar, 2005).
Autopistas del Sol faced opposition from the communities in Argentina with a bid to rebuild roads in the country. It later formed a partnership with Alberto Croce who was the leader of a grass-root cooperative. The partnership allowed him to first conduct community service in order to involve the people affected by the new highway layout. The project later became successful.
Finally, the world’s most used footwear, NIKE, donated money to support a micro-enterprise program conducted in China by China Foundation for Poverty Alleviation. The donation was worth $275, 000 and the program became successful due to the partnership. The institution was able to raise enough funds and its operations were monitored by NIKE to ensure that China benefited from the donation.
Discuss the BRAC model and evaluate its performance in achieving the goals of economic development that was originally founded in Bangladesh during the famine of the 1970s? Can this model be replicated in other countries? Why or why not?
BRAC is a non-governmental institution founded in Bangladesh. Since its establishment in the year 1992, the development organizational model has focused on alleviating poverty hence changing the lives of the people of Bangladesh. It helped the country to realize its development plans by providing chances for the young generation to stimulate sustainable growth in the economy (Smillie, 2009). The model lays emphasis on the most important areas that hinder growth and development.
BRACE saw the need to assist a country that was faced with famine in the 1970s. The model assisted the country to establish mechanisms of food production so as to alleviate reliance on foreign aid during a crisis such as famine. Its wok resulted in the improvement of health and education in the country. In 1970, the birth rates in Bangladesh were 6.3 percent. This, however, improved with the help of BRAC to 2.3 percent in 2011. Due to such good work, the BRAC founder received ‘the award’ (entrepreneur of the world award). Although its affiliate offices are in U.S.A and U.K, the model also operates in Liberia, Tanzania, and Uganda. It can be implicated in developing countries because it helps solve issues that are consistent in those countries such as poverty and poor education.
References
Brinkerhoff, J. M. (2002). Partnership for international development: Rhetoric or results?. Boulder, Co: Lynne Rienner Publishers.
Elyachar, J. (2005). Markets of dispossession: NGOs, economic development, and the state in Cairo. Durham: Duke University Press.
Smillie, I. (2009). Freedom from want: The remarkable success story of BRAC, the global grassroots organization that’s winning the fight against poverty. Sterling, VA: Kumarian Press.
Spector, B. I. (2005). Fighting corruption in developing countries: Strategies and analysis. Bloomfield, CT: Kumarian Press.
Tanzi, V. (2011). Government versus markets: The changing economic role of the state. New York, NY: Cambridge University Press.