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Role of government - Role of government State incompetence...

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Role of government State incompetence So often, government is inept in what it seeks to do. Indeed, Ronald Reagan made a political career out of recounting government wastage and excess; examples of this are numerous. The Pentagon spent £60m recently to retrain 2,000 military personnel as school teachers and class demonstrators[9], and waste is not only confined to national government: New York City public educational system spends 60 per cent of its budget on administration, with one administrator to every teacher. Notoriously of course, the state has proved inept at running industry itself – bureaucrats are incapable of making decisions about markets. Such sentiments as those above become a reflex of the 1980s. Ultimately, Porter attempts to reconcile an extended role for the state with what he sees as its admitted incompetence, and we are left with the admonition that the state has failed to understand and address the key determinants of competitive advantage. But while he is preoccupied with some contributors to competitive advantage, e.g. university research, he also disregards others; there is a vagueness, a lack of specificity. Porter himself would remove government from direct arbitrament in industry as far as possible. He sees it as the blundering adversary of business or, more nefariously, the bogus friend: “Much government policy aimed at ‘revitalizing’ industry has failed. It is doomed because it does not address the determinants of competitive advantage and is therefore not directed at the true cause of decline”.
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