What role should the administration of a country have in the economy? Is it detrimental for the government to intervene in financial matters and the allocation of resources in a market? According to Harry Bruce, government intervention by a politically motivated set of leaders was the primary aspect that undermined the Maritime Provinces in Canada. The government could not make transparent and fair decisions when it came to the allocation of public resources to build and develop industries in the country. Howe, the minister for supply, directed the funds to the Central provinces in Canada because he disliked the Maritimes and their values. For this reason, the Maritime industries continued to deteriorate depriving them of a well-deserved sense of financial stability (Bruce, 1988). Economists have always been skeptic about government intervention suggesting the free market ideology that the economy of a region should be allowed to adjust itself depending on the financial conditions.
On several occasions, the intervention of the administration is quite useful in dealing with public issues in the society. Hence, it is recommended for developing rural and upcoming provinces in a country. However, what is most detrimental based on Bruce’s article is the fact that the government may choose to invest in inefficient projects that do not present viable outcomes. The federal government continued to inject funds in industries in Central Canada without using project appraisal techniques just to spite the Maritimes. For example, the government gave struggling steel companies in the Central provinces aid neglecting the “big three” steel firms in the country because they were located in the Maritime areas (Bruce, 1988). The leadership did not develop a rigorous system with the appropriate screening mechanism to identify lucrative projects resulting in inefficient programs that were of no use to the general Canadian public and the economy. With the right portfolio management and investment analysis, the federal government would have made sound investment choices.
Reference
Bruce H. (1988). Roar from the Sea. Saturday Night.
