Methodology Proposal about Government intervention in Global Economy Essay

Methodology Proposal about Government intervention in Global Economy - Essay Example This paper intends to study in detail the reasons why and effects of governments’ intervention in the world economy. Introduction We first study the methods that the governments have in the past intervened. Research studies indicate that governments adopt various methods to intervene in economic performance dictated by the nature of intervention. History shows that the interventions have been directed by the world economic forces such as the recessions, booms, debt crises among others. However, we shall note that the disparity also arises from the generational change. Most of the interventions methods that governments adopted in the early regimes after independence have changed as the economies mature. Moreover, a defense is noted in the economic intervention mechanisms by the governments in the developed economies as opposed to the mechanisms adopted by the third world economies. Research studies reveal that much of government intervention in the growing economies revolve aro und boosting the economies, while in the developed economies are mostly interested in stability as well as growth. Mechanisms adopted by governments are in essence directed to offering cover to their economies against economic forces from outside or well too to regulate the internal economic performances of their countries. ... Economic partnerships Normally, the government and the private sector run as distinct identities as regards the business environment. Moreover, different governments run distinctively in economic matters though at times circumstances require collective working in order to realize set goals. The government of a state may join hands in economic dealings through what is called partnership moreover; one government may enter into formal arrangement with other governments to serve together economically. These partnerships dictate the economic environment of a state or an economic block. Small economies such as are the African countries are the best examples of economic partnership. They form economic blocks such as the south-south through which they stand to negotiate their deals in the global economic front. However, such partnerships always face the challenge of specialization. However, it is a challenge because majority of young African economies over-specialize in their mode of product ion. Agriculture is the basic example in this (OECD, United Nations OSAA, 2011, 6 of 14). Diversification Governments have the sole mandate of dictating the means of production within a country. Specialization policies as against diversification policies dictate that an economy relies on specialized sector of production within an economy. On the other hand; diversification entails policies that encourage various modes of production as against only one. Through this therefore, a government is able tgo influence her economic performance as well as the performance of her trade partners even within the global market. The government intervenes into the economic performance of a country through such policies that encourage diversification as against specialization. Government spending The