This essay discusses variation in economic development. It addresses the literature by seeking what various theories argue is beneficial for a developing state and how this has this changed over time. It analyzes specific cases to provide practical examples to the theories addressed. Further, it highlights the Middle East to determine whether or not these theories can apply to the region. It then discusses what explains the Middle East's lack of economic development.© BrainMass Inc. brainmass.com October 17, 2018, 2:15 am ad1c9bdddf
Initial scholarship on state development was steeped in Behavioralist and Marxists thinking which focused on society rather than the state. Major theories of the time consisted of Modernization, Dependency, and World System Theory (Lipset 1957, O'Donnell 1979). Studies which did include a role for the state typically assumed the state had a strictly distributional capacity instead of its own agency and resources (Krasner 1984). Further, scholarship that incorporated the state tended to paint it in a very negative light; highlighting state economic involvement as deleterious to development. For example, Olsen (1982) argues that states whose economies prospered following World War II were those that had abolished trade unions and other distributional groups that were in collusion with the government -- West Germany, France, and Japan - whereas states whose interest groups and trade unions remained entrenched did not advance as rapidly post World War II. Olsen is not merely arguing against the state's role in the economy but also against a democratic state's involvement in the economy.
However, studies of non-democratic, under-developed states also came to the same conclusion about the state's role in the economy. Based on his study of Africa, Bates (1981) advocates limiting the state's role in economics because politicians will make policy choices that are politically useful rather than economically so. First, it is important to note that Bates' study does not grant the state its own agenda but is reduced to the goals of political figures. Second, Bates understands the state as being distributional; understanding the states' interests, which are in effect societies' interests, as oppose to a market economy. Bates argues that in under-developed countries political leaders make a decision to de-invest in market forces for the sake of political forces.
This approach along with the findings of Olsen and other scholarship at this time gave rise to the Washington Consensus. They are the policy-makers and political pundits working for the World Bank, IMF, etc. who encouraged and ...
Trade in International Business - Mr. Swanson and Content Cow Dairy
Details: Mr. Swanson and Content Cow Dairy employees need a crash course on doing business in the Middle East to prepare for the cultural differences in exporting to the area. One of the differences that have major legal implications for Content Cow Dairy is bribery. In the Middle East, it is the custom, and perfectly legal, to offer money or gifts to expedite a transaction. Prepare a briefing for Mr. Swanson on when and how the U.S.'s Foreign Corrupt Practices Act and a companion agreement with the Organization for Economic Cooperation and Development (OECD) would affect your client's behavior in doing business in Egypt. Would it be acceptable under U.S. law for Content Cow Dairy to offer baksheesh (a gratuity) to an Egyptian customs official to expedite the inspection of Content Cow's products? (A briefing involves a verbal presentation of the key points of a topic to bring the recipient up to speed quickly.) Your response of 1250 to 1500 words must include the following:
a brief discussion on Foreign Corrupt Practices Act (2007) and how it prohibits payments to obtain favorable business results
research and discussion of the implications of payments to third parties that could be used to obtain favorable business results
discussion on facilitating payments that are permissible under the Act
Content Cow Dairy, Inc. began as a small, family-run dairy farm in Wisconsin in the 19th century, established by a Swedish immigrant, John Swanson. Over the years, the firm has acquired more land and now runs a herd of roughly 1,000 milk-producing cows. The firm is now incorporated for reasons of liability although the Swanson family retains control. The dairy has greatly expanded its production of milk and milk products to the point that Content Cow Dairy has sufficient cash flow to weather most fluctuations in dairy prices. The national Got Milk? campaign run by the industry helped keep consumption of milk products up in the U.S. for a number of years despite popular concerns about cholesterol and saturated fats and competition from other beverages. To maintain the company's growth and decrease its reliance on the mature American market, Karl Swanson, the President and CEO of Content Cow Dairy (and the great-grandson of its founder) is seeking new markets overseas for the company's products, particularly shelf-stable milk beverages and cheeses. Egypt is at the top of the list as a prime market and a focus of Content Cow's future plans.
Currently, no one in the firm has any experience with overseas markets or how to export products. Karl has the idea that countries without the natural endowments needed for raising dairy cattle (ample water and grazing land) might be good markets for dairy products. He is also aware that his family firm is competing for foreign markets with other U.S. firms and firms from leading dairy countries such as New Zealand and Denmark. For these reasons and on the advice of his state's department of commerce, Karl has decided to seek the assistance of a trade consulting firm, Alexander and Kravis (A&K).
A&K, Inc. is an international trade consulting service that has been in operation for the past 15 years. The principals in the firm include attorneys specializing in international trade law, economists, former members of the U.S. Foreign Service, former U.S. customs officials, logistics specialists, and customs brokers. The firm advises its clients on both importing to the U.S. and exporting from the U.S. to various foreign countries.
The firm is especially knowledgeable about business conditions in Latin America, the Middle East, and North Africa although it has access to consultants for other geographic areas. The firm is able to assist its clients in identifying potential markets for its products, developing relationships with foreign distributors, navigating U.S. export and foreign import laws, understanding foreign business practices and customs, and developing a long-term strategy for expansion of the client's business overseas. It provides specialists who can prepare the necessary export and import documents and arrange for transportation and shipping of the exports. Translation services are also available. A&K has a number of large corporations as clients but has identified a niche in serving small to midsize, family-owned firms.
As A&K's account manager for Content Cow Dairy, you are tasked with explaining various aspects of the international business environment and the export process to Mr. Swanson. You will be preparing a series of briefings, memos, and reports to help him understand.View Full Posting Details