|
Market Players
Market participation enables people to specialize and work together, and to
apply their skills and resources in the best way possible, as the price
mechanism provides information to coordinate (see box 3.1,
and chapter 7). But the
institutional framework must ensure that markets function and deliver their
expected benefits. Where formal institutions are weak, activity will locate in
the informal sector-in many developing countries the share of workers in the
informal sector is more than 60 percent.4
This means that a substantial proportion of economic activity is deprived of
potential productivity-enhancing support, and may also escape guidance from
institutions that manage environmental and social aspects.5
But market power can also give large domestic firms or multinational
corporations potential coercive powers akin to the government's in terms of
serving narrow rather then broad interests. Thus, a major challenge for
government and formal institutions is to be more welcoming and supportive of
private actors with appropriate safeguards to ensure the public interest is not
compromised.
|
