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THE ROLE OF THE STATE IN THE PROCESS OF ECONOMIC DEVELOPMENT: A CRITICAL REVIEW
By Victor K. Bolodeoku, Department of Economics, University of Lagos
ABSTRACT
The role of the state in the economic development process has come into focus, especially in the less developed countries, which are characterized by inadequacies, and distortions like externalities, public goods, incomplete or missing markets, prohibitive transaction costs, inequality of income distribution and imperfectly competitive markets. The benign theory of the state views the state as basically concerned with society’s welfare, and so the state has a role to play to correct all the imperfections and distortions to enable it experience meaningful economic development.
Alternatively, the state has also been viewed as malevolent, being a hindrance to economic development, especially when it allies itself with small special interest groups to form an urban biased industrial ruling coalition in its decision-making process, which aims to reward its supporters and maintain itself in power against the large, rural agricultural sector. It is, however, argued that the influence of the government and such small interest groups have to be curtailed for economic development to proceed.
From the developmental state perspective the state has to foster development and institutional changes, the state has to be autonomous and ‘hard’, not necessarily through exogenous factors, but through endogenous forces as illustrated by the success stories of agricultural and industrial revolutions in some South East Asian countries like Taiwan, South Korea and Japan. The state should set policy and standards of performance for each sector of the economy and be ready to back up such standards with credible threats of punishments rewards and where necessary. The state should not be pocketed by small interest groups. The influence of such groups should be whittled down.
The importance of the development of large market size and growing agricultural productivity are very essential and the state industrial policy is seen to be directly linked to the size of the domestic market for manufactured goods.
PRIORITIES IN THE DEVELOPMENT OF A FEDERAL SYSTEM OF GOVERNMENT
By F.E. Ogbimi, Technology Planning and Development Unit(TPDU), Obafemi Awolowo University
Ile-Ife, Nigeria.
ABSTRACT
Many authors in political science have tried for decades to create the impression that great federal political systems like the United States, Canada, Germany and India, are products of “federal constitutions.” To these authors, the federal constitutions of the great federations were created overnight by the exceptional constitution-writing skills of their patriotic citizens.
This work examines the experiences of federal political systems and the logic of sustainable economic growth, with a view to understanding the process of federalism. This analysis is an attempt to match historical and logical perspectives in theorizing.
Our analysis showed that the existing great federal systems achieved their enviable status through slow learning over centuries, during which time they produced the constitutions that truly reflected their experiences and aspirations. Thus, though working federal systems possess true federal constitutions, mere federal constitutions cannot and do not produce working federal systems.
Federalism, our analysis showed, is the process in which many different people come together, usually accidentally, to learn, acquire knowledge and skills, become employed in productive activities and become members of various knowledge-based institutions which regulate the behaviour of people in the system. Because rapid development is an intensive learning process, one characterized by high level of employment and institution-building, rapid development is the critical (or linchpin) factor in promoting federalism.
Trio-Imperatives for Nigeria’s Participation in Globalization
By M. A. Adawo, Department of Economics, University of Uyo, Uyo – Nigeria
ABSTRACT
There are many conditions Nigeria must meet to beneficially participate in the current globalization. This paper has mentioned a number of such conditions, but discusses three it considers most important. They are elimination or reduction of corruption, sound and qualitative education and training, and acquisition of meaningful technological capabilities. This is necessary because Nigeria cannot operate Robinson Crusoe’s type of economy in the 21st century.
GLOBALIZATION AND ECONOMIC DEVELOPMENT: THE NIGERIAN EXPERIENCE AND PROSPECTS
By Mrs M.A. Loto, Department of Economics, University of Lagos
ABSTRACT
This paper investigates the impacts of globalization on Nigeria’s economic growth. It adopts the Mundel-fleming model of open macroeconomics based on the notion of one price. Trade, according to economic literature, may influence growth via catch-up, in addition to other causal links. The openness model that provides for some impetus for financial integration was estimated using Nigerian data and OLS regression analysis was also used.
The regression results show that the inflation rate is negative, exchange rate is negative, and also is openness indicator. Violation of the a priori expectation of these variables may not be far from their levels. For example, the openness indicator which was calculated as total volume of trade divided by the GDP. If, for example, the level of the numerator is low, the regression outcome could violate the a priori expectation. It has been established that the level of trade in Nigeria is low. The signs of the coefficient of the openness variable (for example) violated the a priori expectation. This was because, the level of trade in Nigeria fell short of the minimum level needed for the coefficient to be positive. Nigeria needs to improve on her trade with the rest of the world for the country to benefit from globalization. Also a sound macroeconomic policies are needed to reinforce the globalization exercise for a better result. Fiscal discipline coupled with good functioning financial framework. Nigeria could also look beyond oil. Nigeria needs to get out of the mono-product type of business and research into other types of product that could be effectively and competitively sold in the international market.
EXPANDING NIGERIAN EXPORT TRADE THROUGH GLOBALIZATION: IS IT FEASIBLE?
By Rosemary N. Okoh, Department of Economics, Delta State University, Abraka
ABSTRACT
Goods and financial markets in the world are becoming integrated, such that the business cycle around the world has become an increasingly shared phenomenon. This study evaluates the responsiveness of Nigerian exports to a probable increase in demand from the world market as a result of globalization. Data for 1970-1999, which were obtained from several secondary sources, were used. A vector error correction model (VECM) using Johansen’s two-step error correction methodology was estimated for the study. The results showed that in the long run, world demand for Nigerian export is price inelastic but fairly income elastic. The implication is that in the long run Nigeria may be able to expand her export if there is an increase in global income. In the short run however, the cointegrating vector for total export showed that openness, world income, structural adjustment and relative prices were not significant determinants of contemporaneous changes in total export.
The last period’s value of total export, gross domestic product (GDP), capital goods imports and the world trade organization were significant in explaining contemporaneous changes in total export. These results suggest that Nigerian export trade could be expanded in the short run by participating in the global market through the purchase of new and more efficient technology from the global market at the risk of compounding the already perilous import dependency syndrome. Also, the adjustment coefficient and persistence profile show that it would take four years for the Nigerian economy to adjust back to its equilibrium state once shocked. Policy measures would therefore take a long time to work themselves out. The study concludes that if Nigeria must gain from the growing spate of globalization in the long run, there is a need to intensify her export drive and reorder her import priorities in favour of capital goods. Policy emphasis should be on expanding domestic capacity (human capital and technology) to produce both capital and consumer goods.
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