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Small Firms and Infrastructure
Hirschman's categories of infrastructure first and infrastructure following (industries), and the historical experiences of the recently industrialising countries would be useful starting points in understanding the issue of infrastructure in relation to small firms. Many of the sectors of infr...
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| Format: | Article |
| Language: | English |
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2000
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| Summary: | Hirschman's categories of infrastructure first and infrastructure following (industries), and the historical experiences of the recently industrialising countries would be useful starting points in understanding the issue of infrastructure in relation to small firms. Many of the sectors of infrastructure, being characterised by low appropriability and high positive externalities, are not easily provided by the private sector, especially in a transforming economy. Typically, governments have had the major role. The long gestation periods, and long life of assets, lend an additional dimension that impedes their provisioning by the private sector. This is because long term capital markets, for periods exceeding the working life of the assets, typically do not exist. The infrastructure first is a possible approach, which would place a considerable responsibility on government, both in efficient provisioning and in ensuring a sustainable and high rate of expansion, through taxes and budgetary arrangements. Such an approach, if wisely and effectively pursued, can contribute greatly to competitiveness of industry. In India too, the Plans, and the large role assigned for the public... |
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