Group 10 Reporting

DEVELOPMENT
POLICIES AND
STRATEGIES
GROUP
INTRODUCTION TO POLICY FORMULATION
• Policy formulation involves developing

actionable strategies and detailed proposals to
address public issues.
• It is an essential step in the policy-making

process where solutions to societal problems
are identified and refined.
Goals of Development Policy
• Economic Growth:
Policies aimed at increasing GDP and national income,
creating more wealth within a country. Examples include
infrastructure development, industrial policies, and
investment in technology.
• Poverty Reduction:
Strategies are designed to alleviate poverty and improve
living standards. Examples include social safety nets,
microfinance, and education programs.
Goals of Development Policy
• Sustainable Development:
Policies that ensure environmental sustainability alongside
economic growth. Examples include renewable energy
projects, sustainable agriculture, and conservation
initiatives.
• Equity:
Promoting fair distribution of resources and opportunities,
reducing income inequality. Examples include progressive
taxation, welfare programs, and affirmative action policies.
Key Elements of Effective Policy Design
• Diagnosis:
-Understanding the root causes of problems through research
and analysis.
-Identifying the main factors behind high unemployment rates.
• Policy Instruments:
-Selecting appropriate tools like fiscal policy (taxation and
government spending), monetary policy (control of money
supply), and regulatory measures.
-Using tax incentives to stimulate investment in certain sectors.
Key Elements of Effective Policy Design
• Implementation:
-Ensuring policies are executed effectively with proper
planning and management
-Setting up monitoring systems to track the progress of
policy implementation.
• Evaluation:
-Continuously assessing the impact and effectiveness of
policies and making necessary adjustments.
-Evaluating the success of a poverty reduction program
through measurable outcomes.
Role of Economic Theories in Policy Formulation
• Classical and Neoclassical Theories:
Emphasize market efficiency, supply and demand equilibrium, and minimal
government intervention. Policies influenced by these theories focus on
deregulation and privatization.
• Keynesian Theory:
Advocates for active government intervention to manage economic cycles and
ensure full employment. Examples include stimulus packages and public works
projects during economic downturns.
• Structuralist Theory:
Focuses on structural changes needed to address economic inequalities and
development bottlenecks. Examples include land reforms, education
investments, and industrial policy.
A Case Study in Development Policy
South Korea’s Heavy and Chemical
Industry (HCI) Drive of 1972 to 1979,
which targeted development in steel,
nonferrous metal, electronics,
machinery, chemicals, and
shipbuilding. This push was
concentrated in nine southeastern
regions of the country, where the
Korean government built large HCI
complexes. Both studies estimate the
impacts of the HCI Drive by comparing
South Korea’s transformation from a
firms’ long-term growth in targeted
low-income to a high-income country
industry-region pairs with that in non-
through strategic industrial policies.
targeted industries or regions.
Challenges in Policy
Formulation
• Political Factors
• Economic Constraints
• Social Factors
• Institutional Limitations
IMPORT SUBSTITUTION
VS.
EXPORT LED GROWTH
IMPORT SUBSTITUTION
• It may also be referred to an inward-oriented

strategy.
• Import substitution is a trade policy aimed to

promote economic growth by restricting imports
that competed with domestic products in
developing countries.
• The import substitution approach substitutes externally produced goods and services
with locally produced ones.
UNDERSTANDING THE LOCAL ECONOMY
“leaky bucket”
• Moneymodel
circulates within the region when money that is earned locally is also spent locally.
This requires that some money exists in the bucket to begin with.
— one way this happens is when local goods and services are
purchased by consumers outside the region.
— Another source of inflow comes from businesses which

decide to set up shop locally and generate jobs that pay
local workers.
The "leak" in the bucket that allows money to escape from the community is created
when goods and services from outside the region are purchased with local money.
UNDERSTANDING THE LOCAL ECONOMY
Plugging the
• OneLeaks
way to prevent money from leaving the local economy is to connect local
demand for goods and services with the local suppliers of those goods and services.
• Many of the things that individuals or businesses need

can be found from suppliers within the area but, due to
lack of adequate information or convenience, those
things are often purchased from the outside. This
represents another flow of capital leaving the system.
• By substituting demand for externally produced things with locally produced

things, communities can retain capital for use within the community.
HISTORY OF IMPORT SUBSTITUTION
• The notion of import substitution was popularized in the 1950s and 1960s as a
strategy to promote economic independence and development in developing
countries.
• This initial effort failed due in large part to the relative inefficiency of 3rd world
production facilities and as a result their inability to compete in a globalizing
marketplace.
• Thus an export oriented approach has became the

norm.
• Promotion of Domestic Industry
OBJECTIVES OF
IMPORT • Employment Generation
SUBSTITUTION
• Promotion of Industrialization
• Production of consumer’s goods
• Improvement in Balance of Payment

ADVANTAGES
• Increase in domestic employment.
• Reduced dependence on labor non intensive industries
• Resilience in the face of global economic shock ( recessions &
depreciations)
• Less long distance transportation of goods
DISADVANTAGES
•The IS industries are inefficient as they are not exposed to internationally
competitive industries.
• Increase in unemployment internationally as world GDP decreases through
promotion of inefficiency
Export Led Growth
• An outward oriented growth strategy.
• It refers to the policy of the government

designed to encourage the exporters to
export more goods from the country than
before.
Export Led Growth
In order to achieve export led growth, it is assumed the country will

need to adopt certain policies. These include:
• Liberalized
Trade
• Liberalized Capital
Flows
• A Floating Exchange Rates
• Infrastructure
• Deregulation & Minimal Government Intervention

Primary
Products
• Export promotion of primary products.
• Trade policies relating to the export promotion of primary

product are called Primary Outward Looking Policies.
Manufacturing Exports
• Export of manufactured products.
• Trade policies relating to the export promotion of manufacturrd

product are called Secondary Outward Looking Policies.
ADVANTAGES OF EXPORT LED GROWTH
— Increasing sells and profits. — Generate technological progress

in response to consumption abroad
— Reducing risk balancing growth
— Help to reduce poverty

— Increased employment in labor
surplus developing countries like
— Promotes effective external
Bangladesh, India, Thailand
trade in developing countries
— Gain new knowledge and experience — The production of export is a

necessary precondition for
— Enlarged size of the market increase in import
CONSTRAINTS FOR INCREASING EXPORT
— Can lead to a neglect of the domestic market and a lack of diversification
—Can result in a reliance on a few export products, which can be vulnerable to

external shocks
— Can lead to income inequality and social unrest if the benefits of export
growth are not distributed evenly
— Can result in environmental degradation due to increased production and

exports
which one is the
best option?
• concept developed by a French philosopher, Michel
Foucault
• term combined the words “government” and
“rationality”
• It refers to the art of governing beyond traditional
political structures, encompassing a wide range of
control mechanisms aimed at managing populations
and individual behavior.
1 Biopolitics
2 Disciplinary Power
3 Liberal Governmentality
4 Neoliberal Governmentality
It involves the regulation and management of
populations through various policies and interventions
aimed at optimizing the health, productivity, and overall
well-being of citizens.
It refers to the ways in which institutions such as schools,
prisons, hospitals, and military organizations enforce
norms and shape individual behavior.
It involves creating conditions that allow individuals to
exercise their freedoms within the framework of laws and
regulations.
individuals are encouraged to view themselves as
entrepreneurs of their own lives, responsible for their own
success and well-being.
management of public health crises, such as
Biopolitics
the COVID-19 pandemic
Disciplinary Power Education System
Welfare programs in liberal democracies, such

Liberal Government
as unemployment benefits or social security
the privatization of public services, such as

Neoliberal Government
healthcare and education
Governmentality in economic development involves using
various strategies and policies to manage the economy,
promote growth, and ensure stability. This includes
setting regulations, incentivizing investments, developing
infrastructure, and supporting human capital.

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DEVELOPMENT

• Policy formulation involves developing

• It is an essential step in the policy-making

• It may also be referred to an inward-oriented

• Import substitution is a trade policy aimed to

— Another source of inflow comes from businesses which

• Many of the things that individuals or businesses need

• By substituting demand for externally produced things with locally produced

• Thus an export oriented approach has became the

• Production of consumer’s goods

• Improvement in Balance of Payment

• An outward oriented growth strategy.

• It refers to the policy of the government

In order to achieve export led growth, it is assumed the country will

• Deregulation & Minimal Government Intervention

• Trade policies relating to the export promotion of primary

• Export of manufactured products.

• Trade policies relating to the export promotion of manufacturrd

— Increasing sells and profits. — Generate technological progress

— Help to reduce poverty

— Gain new knowledge and experience — The production of export is a

— Can lead to a neglect of the domestic market and a lack of diversification

—Can result in a reliance on a few export products, which can be vulnerable to

— Can result in environmental degradation due to increased production and

Disciplinary Power Education System

Welfare programs in liberal democracies, such

the privatization of public services, such as

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