Question

1. Discuss the roles of the state and the market in economic development. Compare India and South Korea in this context

Answer 1

The main objective of development models is to develop any country. Be it in the capitalist way, communist way, or mixed way, but they all have the same objective.

According to the capitalist model, the responsibility of development rests with the private sector, that is, the private sector has the right over resources and capital technology etc.

Under this, goods and services are produced on the basis of market demand and supply.

According to the socialist model, the work of production is done through the companies established by the government, and the government itself is doing production while doing public welfare.The supply and price of goods and services are determined by the government. Ie. Market is not valued.

In your mixed economy, these two have a mixed form.India's adoption of a mixed economy after the new independence maintained its leanedness like socialism but during the reform of LPG after 1990, they also tended to like capitalism under mixed economy.In India, after LPG, where it adopted its approach like capitalism, but still in India, to a large extent the government dominates the economy. That is, the market economy is not given that much freedom. As much as countries like South Korea, America etc. are given.

Whereas South Korea has adopted the capitalist model from the beginning.India is still a developing country and South Korea is a developed country.Whose role of government in developmental activities is very low, ie market based economy. South Korea is a more competitive country than India because the market control here is more than that of the government.