Friday, August 15, 2008

Marriage between markets and regulation

The head of the UNDP says we need more regulation that does not stifle individual/market incentives:

Even very strong supporters of “capitalist globalization” believe that greater and more effective regulation is needed to make what some call “financial capitalism” sustainable...What we need to invent and develop are regulatory mechanisms that, on the one hand, don’t stifle private initiative and the creative energy of a market economy, but on the other hand, are very effective in their correction of the market failures that lead to excesses and misallocation of resources. We must also remember that democratic societies can only function well if the results achieved by the market economy are politically acceptable. The current global financial crisis provides a stark example of the consequences of missing and misguided regulation in the market economy.

Read the Q&A with Kemal Dervis, head of the UNDP here.