Chapter 5: States and Markets
Chapter Learning Objectives
After reading the chapter, you ought to understand and be able to explain:
- The strengths of a market economy and the market failure problems that may justify various government interventions in a mixed economy.
- Why market-supporting institutions are important.
- Why strong government controls were so appealing to nearly all LDCs in the decades after World War II.
- Why, more recently, many developing countries have been shedding controls in favor of harnessing market forces.
- The substance of a typical stabilization program.
- The main features of structural adjustment reforms.
- The importance of property rights that are well defined, exclusive, transferable, and enforceable.
- Why market-oriented reforms often spawn strong resistance.
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NOTE TO INSTRUCTORS: the answers to the Exercises are found on the Norton Resource Library, not the Gradebook. To access that go to www.wwnorton.com/nrl.