Problems of Policy Reform in the Haitian Economy

Abstract

The traditional ‘interventionist’ view of economic policy builds on two implicit assumptions: that the government is willing to act for the benefit of the population and that policy implementation is costless.¹ Both of these assumptions, however, may be violated in practice. All real economies, not least those of the Third World, know full well that policy intervention is not costless. First of all, information is costly, which means that, however well-intentioned, policy measures may be mistaken simply because the factual and analytical base on which they rest is erroneous. Second, all implementation requires a bureaucracy. The level of competence of this bureaucracy may not necessarily match the complexity of the tasks it faces, and the bureaucracy may itself have implicit goals which differ radically from the official goals and, therefore, bias the outcome of the policy. Third, economic policy is largely a question of coordination, and coordination entails costs. Fourth, all policy measures alter the existing distribution of income and thereby set in motion countervailing forces fomented by the losers to neutralize the effects of redistribution.²