>Dear colleagues,
>
>The debates between Stiglitz and Bhagwati remind me of the old
>definition
>of an economist. An economist is a person who having observed a bumble
>bee
>flying, sets out to prove why it is not possible.
>
>If you believe that context matters, then the idea that competition
>would
>work differently and have different effects in markets with clearly
>developed property rights and other social/economic/legal supports
>should
>not be hard to imagine. Add to that mix, the problems of the
>liabilities
>of newness and smallness, then one can start to appreciate the
>difficulties
>of economic development in under development economies. Based upon
>this, I
>have developed a middle ground model. I will call it (tongue firmly in
>cheek) Boal's soccer model of economic development.
>
>Those of you who have children who played competitive sports, like
>soccer,
>when they were little should have no problem understanding this model or
>its underlying logic.
>
>Basically, the model states that you gradually open up firms to
>competition
>based upon the level at which they can compete. Thus, as in socccer,
>4-5
>year olds compete against other 4-5 year olds. As they mature, we move
>them up to playing against 6-7 year olds. At some point, usually in
>their
>teen years, the best progress to competing against any and all
>competition,
>the others, not having the ability to compete at this level, drop out.
>Following this model, new and embryonic firms/industries would only have
>to
>compete against other domestic firms/industries. As they mature, and
>the
>weak dropout, remaining firms would be required to increasing compete
>against outside (foreign) firms who would gradually have any
>restrictions
>originally placed upon them decrease until such a point that their would
>be
>no advantage given to either domestic or foreign producers.
>
>This would allow, domestic firms/industry time to develop the core
>competencies needed to compete in the global market place, but at the
>same
>time not guarantee that weak firms would be guaranteed that they would
>survive.
>
>Requiring a 4-5 year old to compete against a 9-10 year old, in a
>contest
>to the death, guarantees the extinction of the 4-5 year old. The same
>is
>probably true of new and small firms/industries in less developed
>countries. Wasn't one of the reasons for American companies to expand
>globally is that they could leverage their core competencies against
>weak
>foreign domestic competition.
>
>See you at the soccer field.
>
>Kim Boal
--------------------------------
Kim Boal
College of Business Administration
Texas Tech University
Lubbock, TX 79409
(806) 742-2150
KimBoal@ttu.edu