Sunday, October 08, 2006

How Important is a Government?

The role of the Japanese government in shaping the country’s economy and ensuring a high level of development throughout the regions has been immense. I think Japan has been pretty fortunate in terms of its leadership and government, particularly after the II World War. In this sense, some countries are just luckier than others. I don’t mean to ignore other factors that contribute to a country’s well-being, such as the geopolitical situation, world economy, and culture. However, the quality of a government, almost always, makes the most significant difference.

In my opinion, the centralized Japanese government system works well because the central government has successfully maintained its authority, and has responsibly done its work. These, in turn, led to political stability that earned people’s trust and support. This allowed the central government to design, import, adjust, modify, implement various types of policies to secure both economic and social development of the country over the years. Why aren’t the Japanese questioning and debating their government’s policies very much? My guess is, perhaps, because their government has rarely let them down, and their trust has not been undermined. In my own experience, Japanese public officials that I’ve met have inspired trust. Not all of them can give you the ‘big picture’, but I always feel that they are very good at whatever their specific job is.

Moldova is the reverse of Japan. Almost nobody trusts or respects the government, which is totally understandable given its low performance, responsibility and accountability levels. Even now, when a certain level of political stability has been achieved, the political agenda of the Moldovan government is still rather vague. People are either indifferent towards, or afraid of government. None of these attitudes is very productive. In my view, the Moldovan government needs to earn people’s trust and support by being more transparent and result-oriented. People’s support of governmental policies might make running this country a more productive endeavor.

Comments:

Tom , October 08, 2006  

I subscribe to the economic theory that the most fundamental things government can do to build a foundation for a strong economy is to enforce efficient and transparent rule of law with property rights and lack of corruption. The conditions for government corruption are officials with low pay, high authority, and little oversight. So to reduce corruption, officials should be well paid and accountable for their actions.

Anonymous , October 10, 2006  

The coruption is more about culture and society's values. If the main value is money and power, then values as prosperity of the nation and rule of law are always somewhere in the backstage.
There should pass 2-3 generations to change coruption situation in Moldova.
It is not only the economy, it is mainly about attitude and mentality of the nation.

Lucia , October 10, 2006  

I believe that corruption is not the main factor that hinders development in Moldova. I see lack of incentives as the major barrier to development. People (just like water and electricity) take the path of least resistance. Why would someone bother to work hard and be honest if there is no reward? Likewise, why would someone stop his 'negative' behaviour, if he is not punished for it? I see the job of any government as creating such incentives, and enforcing the rule of law.

Lucia , October 10, 2006  

Here is the link to E. Lucas' insightful article about the differences between Western European and CEE politics "Is CEE different" http://edwardlucas.blogspot.com/

Edward's point is that post-communist countries simply cannot afford a lousy government because there is nobody else available to do the job. Therefore, waiting for 2-3 generations might not be the best option.

Anonymous , October 10, 2006  

I agree with you, Lucia. A great Chinese philosopher once said that if we establish severe punishments for small wrongdoings, then big wrongdoing s will not appear. Therefore, if we establish a good rule of law and the state takes care of citizens' well being, then we can eradicate this problem.

Anonymous , October 10, 2006  

The Moldovan Government face a number of exciting challanges in the coming decades in every area and level of government.
It requires a 'first things first' approach.
Its fixation with Transnistria is stunting its ecomonic growth and coupled with the side issue of the wine crisis with Russia a byproduct of that same issue the prospect is currently bleak.
However there is an exampl of hope!.
In the eight years after the Republic of Ireland surrendered its claim on Northern Ireland in 1998 property prices increased six fold. A €60,000 home in 1998 is now €360,000 just eight years later.
Unemployment has dropped to 3%. Learn from the Irish is Modova's best hope.
Moldova's success lies in a peaceful environment with good neighbourly relations. The frozen conflict needs a speedy rsolution.
97% of Transnistrians do not want to be part of Moldova. Let them go.
Then, like Ireland sell the world the new found peace and stability.
The past is the past and the past is lost.
The future lies within recognising reality and moving on. Perhaps this economic growth could encourage some sort of unification but regardless its the only way forward.
Mark

Tom , October 11, 2006  

Marco, you may be confusing causation with correlation. Ireland’s economy could have improved for any number of unrelated factors such as its liberalization of business regulations and lowering tax rates in the late 90s as well as (specific to your numbers) the overall global real estate boom of the past 10 years.

You could just as easily find any number of examples of countries with yet disputed territorial claims with booming economies. From 2000 to 2005, China (claiming Taiwan) grew its per capita GDP at PPP from $3,980 to $6,800 and India (claiming Kashmir) its from $2,360 to $3,300.

The United Kingdom’s total GDP was 230 billion pounds in 1980; in 1982 it went to war with Argentina to reclaim the disputed Falkland Islands; in 1985 its GPD was 354 billion pounds and it is now over 2 trillion pounds. So obviously resolving a territorial dispute through military force did not hurt the UK economy.