Role of The State
The large-scale programme of industrialization advocated by this model requires huge investments which are beyond the means of the private sector. The investment in infrastructure and basic industries (like power, transport and communications) is 'lumpy' and has long gestation periods. The role of the state in this theory is therefore critical for investment in social overhead capital. Even if the private sector had the requisite resources to invest in such a programme, it would not do so since it is driven by profit motives. Many investments are profitable in terms of social marginal net product but not in terms of private marginal net product. Due to this there is no incentive for individual entrepreneurs to invest and take advantage of external economies.
Read more about this topic: Big Push Model
Famous quotes containing the words role of the, role of, role and/or state:
“But however the forms of family life have changed and the number expanded, the role of the family has remained constant and it continues to be the major institution through which children pass en route to adulthood.”
—Bernice Weissbourd (20th century)
“Such is the role of poetry. It unveils, in the strict sense of the word. It lays bare, under a light which shakes off torpor, the surprising things which surround us and which our senses record mechanically.”
—Jean Cocteau (1889–1963)
“Women’s battle for financial equality has barely been joined, much less won. Society still traditionally assigns to woman the role of money-handler rather than money-maker, and our assigned specialty is far more likely to be home economics than financial economics.”
—Paula Nelson (b. 1945)
“A set of ideas, a point of view, a frame of reference is in space only an intersection, the state of affairs at some given moment in the consciousness of one man or many men, but in time it has evolving form, virtually organic extension. In time ideas can be thought of as sprouting, growing, maturing, bringing forth seed and dying like plants.”
—John Dos Passos (1896–1970)