Developing Nations

DEVELOPING NATIONS 1

DevelopingNations

UniversityAffiliation

Phase B (Limited Access Order) and Phase C (Open Access Order) havevarious differences. For example, OAOs grow at a lower rate but moreconsistently, have more periods of growth but with lower averagegrowth during those periods. Also, OAOs have fewer and shorterperiods of no or negative growth, less shrinking of GDP when don’tgrow.

On the other hand, LAOs grow quickly when they do grow, but theseperiods of growth are shorter than in OAOs, and have more and longerperiods of no or negative growth, and more shrinking, more loss ofwealth when negative. Besides, LAOs limit access to political andeconomic organizations and to third party enforcement (non-neutralityof law).

The collective action problem highlights the difficulty of movingfrom phase B to phase C. In this regard, there would be a dilemma asto whether to favor individual interests or group interest. Phase Bpolicies become winners when organizations facilitate the ability ofgroups of people to work together for common purposes. This isbecause the ability to form these organizations depends on thirdparty enforcement of the state. OAOs have open access to politicaland economic organizations and provide neutral third partyenforcement.