1 / 10

INDUSTRIAL ECONOMICS II

INDUSTRIAL ECONOMICS II. Lecture 4: Policy Problems of the Industrial Organisation. Topics to be discussed. General and Specific Objectives of Public Policy – The Implementation of the Objectives of Public Policy Exemptions of Special Case Standard Regulation – Implementation.

claire
Download Presentation

INDUSTRIAL ECONOMICS II

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. INDUSTRIAL ECONOMICS II Lecture 4: Policy Problems of the Industrial Organisation

  2. Topics to be discussed • General and Specific Objectives of Public Policy – • The Implementation of the Objectives of Public Policy • Exemptions of Special Case • Standard Regulation – Implementation

  3. 1.1: General and Specific Objectives of Public Policy • Economist often argue that governments should intervene in industry when markets fail to provide efficient utilization of resources. • But in real situation government often intervene for reasons that (at best) when the there is a hazy connection with market failure.

  4. The case for industry policy; • It must be carefully made: • How? • Objectives must be clearly specified • Theoretical justification must be spelled out • Resource implications must be carefully analyzed

  5. Example of the Policy Objectives of LDC: • General policy objectives – Government would normally reflect the development objectives it wishes to pursue plus the constraints (political, institutional, administrative, etc) that need to be considered. Efficiency-related objectives – the objectives are concerned with maximizing , over time, the total welfare accruing to the economy as a whole from the efficient use of scares resources which is at its disposal. Distribution-related objectives – concerned with achieving the most satisfactory distribution of the total welfare between the inhabitants of the economy.

  6. Specific Policy Objectives: • To Promote more competitive environment (competition policy). • To achieve maximum attainable economic welfare (policy towards monopoly) • To discourage mergers leading to monopoly positions (policy towards mergers)

  7. Specific Policy Objectives (contd.): • Discourage restrictive practices or agreements between firms that will reduce competition (policy towards restrictive and anti-competitive practices) • To discourage barriers to entry that will effect competition (Policy towards entry barriers). • To see to the success of the competition policy based on the theoretical stance adopted (Evaluation of the competition policy)

  8. Specific Policy Objectives (contd.): • To direct the spatial location of industry (regional policy. • To encourage innovation to enhance economic welfare (innovation policy). • Trade to achieve industrial objectives (trade policy). • Ect.

  9. The extent and form of government intervention in the industrial sector • Is likely to be influenced by 3 sets of factors: • The development objectives it pursues; • The conditions it faces • Its political commitment to, and administrative capability for market intervention.

  10. References: • Ferguson, Paul R. and Glenys J. Ferguson (1994) Industrial Economics: Issues and perspectives, The MacMillan Press Ltd., Britain • Kirkpatrick, C.H., N.Lee and E.I. Nixson (1985) Industrial Structure and Policy in Less Developed Countries, George Allen & Unwin (Publishers) Ltd. ; Britain.

More Related