The Economic Growth And Development Of A Country

1504 Words May 4th, 2016 7 Pages
Over the years, there has been much debate over whether the state plays a role in the economic growth and development of a country. Some believe that the state is essential, arguing that its intervention promotes investment, mobilizes industry and capital, and creates jobs. Some view it as an obstacle, claiming that its role should be deregulated and reduced because its involvement can lead to market distortions and corruption. Some do not like either argument, declaring that the state is less important compared to other factors in determining the development trajectory of a country. These factors include geography, ethnic diversity, conflict, and political institution. I believe that the last position is the strongest; while the state does play an important role in growth, it is not the most important. I believe that the political institution a country operates under is more significant to dissecting this relationship than the intervention of the state. First off, what are the arguments in favor of the correlation between the state and economic development? One argument is that the state provides structure and order, which in turn reassures domestic and foreign investors, giving them an incentive to invest. A state provides order by controlling violence, as told by Robert Bates in “The Formation of States.” Bates describes how the rise in prosperity in 14th and 15th century Europe led to an increase in violence and conflict. As the value of agricultural land and its…
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