Pros & Cons of Market Oriented Approaches
- Market orientated approaches aim to reduce government intervention and free up private-sector economic activity so that national output (real GDP) increases
- As national output increases, the potential to break the poverty trap increases and this can lead to better economic development in a nation
Pros and Cons of Market-Orientated Approaches
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Exam Tip
You will notice a lot of similarities in the lists on this page with the pros and cons of supply-side policy, but there is one distinct difference. When evaluating supply-side policy, the focus is on increasing national output (real GDP). When evaluating pros and cons in the context of economic development, focus on how to market policies have the potential to improve lives and the standard of living.
One way to do this is to always link a policy to the poverty trap diagram - and then explain where the policy would intervene to break the poverty trap. Here is an example
More international trade increases national output → more workers are required to produce this output → employment increases → human capital increases as a result of employment → productivity increases → wages increase → health and education increase → leading to higher human development and a better standard of living
Pros & Cons of Government Intervention
- Government intervention can be vital to the development of its citizens
- Provision of services, merit goods, and public goods enhances the lives of a country's citizens
Pros and Cons of Government Intervention
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