Volume XXI — Number I
Hugh Schwartz
Abstract:
The article explores how bottlenecks occur within an economy and discusses how the state and private sector must work together in order to improve market and industrial efficiency. Bottlenecks occur when a state intervenes in the economy in order to stimulate effort or output of a sector of the economy through a corrective response. This response(s) inhibits the economic growth or sector or group of activities. Increased output is dependent on the efficiency of the given industry. Bottlenecks vary in importance depending on the country and industry. Their causes include, but are not limited to, economic infrastructure restraints, restraints to competition, financing difficulties, and political strife. The article discusses methods to mitigate the effects of political strife in Central America in order to reduce bottlenecks in domestic industries. One method would be to produce guidelines to help direct industries’ adaptations during periods of political strife. Another proposed method to mitigate a marketing bottleneck for be for those Central American countries to redesign products, reduce number of products manufactured, and improve operational efficiency in order to effectively compete against foreign competition. Various approaches to improving industrial efficiency include addressing deficiencies in educational training, balancing of payments difficulties, and difficulties of financing. The long-protected economies of Central America have led to efforts by entrepreneurs to garner the favor of the government rather than addressing market, industrial, and training shortcomings of the economy
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