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THE STATE AND THE ECONOMY - Coggle Diagram
THE STATE AND THE ECONOMY
STATE PARTICIPATION IN THE ECONOMY
1
20th century
NEOLIBERALISM
Market forces that run the economy without state intervention.
It caused capital concentration in few hands and increase poverty.
Elimination of controls consequences:
Corruption
Administrative mismanagement
Disorganization of the economy
Large financial losses
STATE & CRISIS
When a CRISIS occurs?
There are:
Fewer jobs: unemployment.
No money for education.
No money for health.
No money for housing.
The State does not have money to pay its employees.
1999 CRISIS
It demonstrated the importance of the State promoting investment to generate development, jobs, strengthen production.
NEOLIBERALISM
What?
An economic trend based on free-market forces.
No state intervention
How?
Implement policies like:
Economic adjustment
Reduction of public employees
Privatization of state-owned enterprises
Elimination of subsidies
Who?
IMF & other agencies
Encourage neoliberal policies
IMF:
The International Monetary Fund: 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Ecuadorian State Interventionism
Since the 1960s, Ecuador has managed huge oil resources invested in the construction of roads, telecommunications, education and health.
1999 problems:
Corruption
Bureaucracy growth
Neoliberal governments
Beginning 21st century
There was a recovery in the economy but there is always a risk of bureaucratic growth.
STATE ACCOUNTS
ECUADOR has financed its works from three main sources:
1
Oil and fuel sales
3
Income tax
2
Value Added Tax (VAT-IVA)
The external or internal debt is made when this income is not enough.
