The Political Economy of Macroeconomic Management: The Case of Bangladesh

Abstract

South Asia remains a slow growing region in Asia and has largely been left out of Asian economic dynamism (Rana 1997). Since the early 1970s the debate on economic development in this region has been whether industrial, trade, and investment policies which have created an elaborate control system has stifled economic growth. India has been the focus of this debate. Bhagwati (1993), Dubey (1994) and others have strongly argued that India’s slow economic growth since independence has been the result of its flawed development strategy. Hughes (1994) points out that, despite the introduction of various poverty-reducing direct measures, it is slow economic growth that has failed India in its efforts to reduce massive poverty. Like India, Bangladesh, Pakistan and Sri Lanka also adopted public sector-led dirigistic development strategy to promote economic growth and have been unsuccessful in reducing poverty substantially (A. Hossain and Rashid 1996).