Knowledge
Knowledge is particularly an essential aspect concerning both state and global economic development. It necessitates the need to develop effective strategies that can be applied in various institutional systems. According to Rodrik (2014), most developing nations have taken a step towards economic stability with a subsequent reduction in the number of poor people. The facet has been effective in most Asian and African countries due to ideal strategies that serve both their short-term and long-term goals. Though they enjoy economic freedom, outside institutions have been questioned on their involvement in striking a balance between the states and markets. Their impact on the aspects above cannot be ignored, thus the need to have defined strategies for their involvement.
Foremost, outside institutions should create a favorable political environment that will reduce state tensions, which eventually affect the market. They have control over political parties in that they strike deals that can define the path followed by the government. It is vital to have them in support of market strategies that will hardly interfere with economic growth. Also, they should not support despotic governance that is against the will of the people. Instead, outside institutions should be active in pointing out negative aspects of administration for an affirmative change. Besides, they should provide a platform that will highlight the grievances of citizens within the state and provide a strategy in the future. In this case, such institutions have to be the caretakers of fair market prices based on demand, supply, and government intervention. Consumers should only pay for goods and services worth what they requested. They should have effective field processes that consider the quality of goods and services provided. Therefore, their strategies should only be based on improving any deteriorating relationship between markets and states.