Recent events in the Jamaican economy have brought to the fore, the need for a serious and nuanced discussion on what the Government, as one of the actors in the national economy, should be doing in order to facilitate economic growth and development.
The Government's decision to: withdraw its original plan to build the infrastructure for the LNG plant, sell the Government's share in the loss-making Clarendon Aluminum Partners (CAP), approve the merger between Digicel and Claro, have sparked debate.
The discourses however, suffer from a major shortcoming which is a clear philosophical understanding of the role of government.
The role of government in an economy is a long-standing debate that can be traced back to Adam Smith's 1776 classic, The Wealth of Nations. Since then, it is clear we have not settled in our minds the real function of government as one of the main actors in the economy. There are still schools of thought as to what a government ought to be doing in an economy. The schools of thought have varied from the left which posits that government should do everything in an economy. Put differently, government should be the sole arbiter in the distribution of the scarce resources. On the other hand, the views on the right postulate that the government should merely play a facilitatory role, that is, setting the frameworks so markets can work efficiently. In essence, government should get out of the way of the market and leave it to distribute the scarce resources in the economy. This way, the resources can generate optimum returns and make citizens happy. Put differently, the right is of the view that the freer the market the more efficient will be the allocation of resources. Persons on the right generally point to the United States (US) as the example of little government intervention and economic prosperity while those on the left like to point to places like France as exemplar of a country where government intervention is strong and the economy is doing well. Despite these examples, intellectually and empirically, we have not settled on what governments should be doing in an economy.