Markets function differently in developing countries compared to developed countries. In developing nations, markets seek security, growth, and certainty but are governed by 10 factors including borrowing ideas and capital from abroad, gaining monopolistic powers through government licenses, and turning formal to interact with rent seekers. As a result, markets in developing countries are closed to the poor, lack fair competition, prohibit small businesses from expanding, distort production and consumption, and negatively impact global trade.

1. How Markets Work?
The Case of Developing Countries
Dr. Vaqar Ahmed
Sustainable Development Policy Institute
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2. Outline
• Markets: developed Vs. developing countries
• What markets want?
• 10 bullets that govern markets
– In developing countries
• Result
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3. Markets: developed Vs. developing countries
• Security
• Rule of law
• Property titles
• Contract enforcement
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4. What markets want?
• Security of assets and profits
• Growth
• Certainty
– Of rules
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5. 10 bullets that govern markets
(case of developing countries)
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6. 1. Borrowing of ideas
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7. 2. Borrowing of Capital
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8. 3. Put capital to use
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9. 4. Search for biggest client - government
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10. 5. Turn formal
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11. 6. Initiate tea party with rent seekers
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12. 7. Work on playing tax, labor and customs
regime
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13. 8. Diversify in consumption goods
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14. 9. Get investment and trade licenses from
government – gain monopolistic powers
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15. 10. Go Open  Trade Internationally
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16. Result
Markets in developing countries are:
• Closed to poor
• Lacking level playing field
• Prohibiting graduation of small and medium
enterprises
• Distorting production and consumption
• Adversely affecting global trade
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17. Thank You
vaqar@sdpi.org
www.sdpi.org, www.sdpi.tv
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