Chapter 5 Policy approach and implementation

Abstract

The policy approach adopted by the State of Ceara relies basically on the fundamental evaluation revealed above that a major factor influencing poverty and inequality is the existence of a structural market failure in the process of economic development. This failure leads to a situation where structural changes in the economy, such as the diminution of the relative weight of agriculture, are not followed by appropriate adaptations of the society in terms of transition of the labor force to new types of employment, or in terms of urbanization and spatial restructuring. If this is actually a market failure, this implies that the “natural” free market action does not lead to an optimum in the state economy. The intervention of the State in this case is needed in order to achieve a better economic optimum. This means that the government policy that would lead to a reduction of poverty and of inequality would lead at the same time to a larger and more efficient macroeconomic growth.

Citation

Bar-El, R. (2008), "Chapter 5 Policy approach and implementation", Bar-El, R. (Ed.) Regional Development and Conflict Management: A Case for Brazil (Contributions to Conflict Management, Peace Economics and Development, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 69-78. https://doi.org/10.1016/S1572-8323(08)08005-3