Article Information

Journal: Business and Economics Research Journal

Title of Article: Role of the State in Developing Countries: Public Choice versus Schumpeterian Approach

Author(s): Dilek Demirbas, Safa Demirbas

Volume: 2

Number: 1

Year: 2011

Page: 15-30

ISSN: 1309-2448


It is obvious that even though modern public choice theories, which were first developed for Western pluralistic societies (society-centred), might have highlighted many hidden subjects in developing countries such as rent-seeking, corruption, strong state tradition, undemocratic decision mechanisms, etc, however, they still cannot hold and explain all the dynamics of these countries since they need to adopt a state-centre approach. In that sense, we propose that the Schumpeterian approach can help us in understanding the dynamics of developing countries even better. Therefore, our main objective in this paper is to provide a synthesis of public choice approach and the Schumpeterian approach to understand the role of the state in developing countries. We know the fact that this study still remains incomplete and not enough to cover all the needs of the subject, but at least it highlights some hidden issues for developing countries and starts a new discussion on this path.

Keywords: Public Choice, Schumpeterin approach, Developing countries, The role of the state

JEL Classification: NO1, O5, P0