Glavan, Bogdan (2007): Coordination Failures, Poverty Traps, "Big Push" Policy and Entrepreneurship: A Critical View.
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Poverty traps occurs when agents fail to coordinate their actions to achieve the optimal allocation of resources. It is argued that this phenomenon makes economic convergence impossible and keeps agents in a poverty trap from which they cannot escape unless a massive and coordinated industrial policy is implemented. This analysis shows that the literature on coordination failures has overemphasized the significance of market failure. It argues that coordination is possible and profitable in a free market system. State intervention is responsible for the systematic misallocation of resources (discoordination), in general, and for poverty traps in particular.
|Item Type:||MPRA Paper|
|Original Title:||Coordination Failures, Poverty Traps, "Big Push" Policy and Entrepreneurship: A Critical View|
|Keywords:||coordination failure, poverty trap, industrial policy, market system|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development
P - Economic Systems > P5 - Comparative Economic Systems
F - International Economics > F5 - International Relations and International Political Economy
|Depositing User:||Bogdan Glavan|
|Date Deposited:||14. Nov 2007 15:12|
|Last Modified:||11. Feb 2013 23:28|
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