Critical task for ensuring sustainable growth, protecting national interests, and promoting social welfare requires striking the balance with policies that blend state intervention with market-driven reforms avoiding the two antagonistic extreme school of thought between complete state control and total state withdrawal from direct government investment especially in infrastructure development activities.
Sustainable growth and social welfare have not been scored by positioning states with terms of extremes. Rather it seems fair to have a policy that blend state intervention with market-driven reforms as and when the circumstance needs.
On the other hand, active government involvement—through public investment, strategic development planning, and regulation—has been defended as vital for addressing market failures, ensuring equitable access to essential services, and safeguarding national economic security.
All the same, it is a reality that some African, Latin-Americans and Asian countries were earlier colonised and were having some better stride in infrastructure development during colonial period. Yet the built up heritage were not to be attributed to the principle of neoliberalism or similar concept rather it is otherwise.
These days economic governance increasingly recognizes a show case of binary positions that many countries tend to adopt. A hybrid approaches, maintaining government oversight and investment in critical sectors while leveraging private sector efficiencies where possible seems viable rather than sticking with either of the two extremes.
Policies such as targeted regulation, public‑private partnerships, and selective privatization enable states to guide economic priorities without exerting full control. This balanced approach appeals to many emerging economies to move from a highly centralized system toward gradual liberalization. This help maintaining state involvement in key strategic development sectors to guide economic priorities without fully relinquishing control.
Had it not been for such government policies, mega project like GERD, Africa’s largest hydroelectric dam, and Corridor Development may not be realized with such momentum. We may not even welcome such change requirements by private investors as private investors are known to minimize or avoid any risk associated with security and other local problem in their investment.
So the tie break for the core tensions and perspectives between two extremes for development is a policy that create reasonable virtue amalgamating the benefits of the two knowledge areas that align with particular strategic investment need of a nation.
Targeted regulation and selective public‑private partnerships allow states to guide economic priorities without exerting dominance at each extremes. Many emerging economies favour this model, blending liberalization with continued state involvement in strategic sectors. The result has encouraged progress in their development venture.
Effective government intervention provides enabling environment and resources needed for high-impact projects where private investors shy away due to unwillingness to engage in high risks business case.
State-led development helps align mega projects with national priorities, especially in strategic infrastructure areas for broad-based economic growth, social welfare, and sustainable development. Governments typically serve as principal investors, providing essential funding, strategic planning, and regulatory frameworks to enable these projects to be completed for intended purpose if the focus is serious and the policy is hybrid that does not go to either of the two economic thoughts.
Through regulation and partnerships, states shape economies without full control. Emerging economies like this mix of liberalization and state influence, which has yielded promising development outcomes.
Combining regulation with selective partnerships, governments can direct growth without stifling markets. Emerging economies increasingly embrace this balanced model, and the payoff in their development journeys has been strikingly positive. Governments plan infrastructure around national goals, ensuring development to serve public interests. Economic theories guide policy, but in practice, projects often slide between two schools of thought
Governments assess infrastructure needs, to align projects with national economic and social objectives, and design policies and to ensure execution effectively engaging stakeholders. This approach promotes coherent agile project development that serves the broader public interest, beyond the strict application of economic principles.
Development is not a formula but a canvas. Governments sketch infrastructure to match national aspirations, painting policies that serve the public good. Economic theories offer colours, yet no single shade is absolute—projects inevitably blend hues from both schools of thought.
The most sustainable and equitable path to growth lies in designing policies that integrate the benefits of both state-led and market-driven strategies, tailored to national circumstances and evolving developmental challenges with viable economic applicable tools that best solve critical problem.
There are successful emerging economies adopting hybrid approaches that maintain strong government oversight and investments in strategic sectors while leveraging market efficiencies through targeted regulation, public-private partnerships, and selective privatization.
Thus the question is not totally a matter of right or wrong with the economic principle. It is a matter dependant on the viable choice to address immediate needs or priority tier of different states set to get their way to reach their target.
The resolution of core tensions between opposing economic schools of thought—such as complete state control versus total market reliance—lies in adopting policies that balance these competing principles pragmatically. Rather than adhering strictly to ideological extremes, effective development strategies blend state intervention with market-driven reforms based on specific circumstances and national priorities.
Balanced policies recognize the importance of government involvement in areas where markets fail, such as in infrastructure, social welfare, and strategic sectors critical to national security and economic stability. At the same time, they leverage the efficiency, innovation, and resource mobilization capacity of markets through targeted regulation, public-private partnerships, and selective privatization.
There is a need for pragmatic approach that recognizes the dynamic and diverse nature of economies. Agile and effective implementation plan must adapt continuously, aligning policies with changing developmental needs, institutional capacities, and socio‑economic and political contexts.
Combining regulation with selective partnerships with private sectors, governments can foster growth without stifling markets. Infrastructure planning needs to be aligned with national goals to ensure that projects serve the broader public interest. While economic theories provide guidance, in practice, development initiatives often swing between the two dominant schools of thoughts.
Because economies are diverse and ever‑changing, governments cannot stand still. They must align policies with evolving needs, institutional strengths, and socio‑political realities to ensure continuous development.
Complex challenges require flexibility and forward-looking policies. For instance, public-private collaboration and risk-sharing mechanisms help unlock investment, especially in high-impact areas like infrastructure where purely private financing is limited.
Furthermore, macroeconomic stability is reinforced by adaptive policies that plays a vital role in mitigating vulnerabilities from external shocks and financial volatility, as seen in countries like Vietnam and South Korea.
The writer can be reached via gzachewwolde@gmail.com
