The Role of Interest Groups
Chapters 5 and 6 have analyzed the basic reasons for stagnation in Jamaica. Recall from Chapter 2 that the classical mechanism of economic growth may be formulated as consisting of two stages--the size of the surplus and how the surplus is disposed of--it seems that in a Jamaican context, the first stage does not present a problem. The surplus as it has been calculated in these chapters constitutes by far the largest component of total production--so large, in fact, that any reasonable definition of "subsistence" would imply a surplus of more than half of net domestic product. 1 The uses to which surplus resources have been put, on the other hand, seem to be the basic obstacle for economic growth. As seen in Chapter 5, only a small amount of the surplus is saved and invested; hence, most of it is consumed. The material presented in Chapter 6 suggests an important conclusion, namely that the deteriorating private savings behavior observed in the 1970s was caused by a change in the government's fiscal policies, the link between government policies and private savings being changes in the functional distribution of surplus income. Insofar as this is a valid interpretation of events, it may be suggested that the government's behavior is important, not to say crucial, for the performance of the economy. Although this is not a very original suggestion in general, it deserves to be emphasized in a study of the Jamaican economy since, as noted in previous chapters, several writers--for example, Girvan et al. ( 1980)--attribute the causes of the stagnation to external factors, in particular the IMF.
From the observation that the government plays an important part in shaping an economy's destiny, the suggestion that the government may act to achieve particular goals for particular groups is not far away. Development economists have relatively recently incorporated such considerations in their models. 2 The basic idea is very simple. In a democratic country, the government is elected by the public. Assuming that voters are rational and interested in their own welfare. the outcome of the election will be determined