Perspectives

Abstract

The major issue of relative roles of market institutions, state control and regulatory institutions remains unresolved even after many years of experience in various countries. This is because there are only a few common prescriptions that fit every economy and institutional configuration; differentiated policies are necessary for diverse settings. A classic observation on a proposal by some stakeholders for almost complete reliance on market forces and corresponding market institutions, with limited (if any) nonmarket institutional interventions may be quoted here. Decades ago, Karl Polanyi (1944, p. 57) stated:

“Ultimately....the control of an economic system by the market is of overwhelming consequence to the whole organization of society: it means no less than the running of society as an adjunct to the market. Instead of economy being embedded in social relations, social relations are embedded in the economic system.”