Value Stock Versus Growth Stock Essay Example | Topics and Well Written Essays - 1500 words

Value Stock Versus Growth Stock - Essay Example In real world, there are more risks involved than just one of type of risk. Market sensitivity is an important risk but that cannot alone be used in order to compute the intrinsic value of stocks and hence by relying on only this type of risk, we are actually making the things more simple than they really are and not accounting for important risk elements which lead to faulty analysis and intrinsic value determination of stocks. This can lead to poor decision making and by relying just on Capital Asset Pricing model, investors stand a chance of losing their hard earned money because they are not account for all types of risk that should be included in their investment. All of this debate shows that investors should not just pick the blue chip stock but also first try to classify stocks into value or growth stocks and then create a portfolio on the basis of a strategy called â€Å"Dogs of the Dow† and keep on making structural changes to their portfolios based on the results an nounce. This way they are not only diversifying, but also upgrading the return on their investments. 2) There are several factors that account for Risk and Returns according French and Fama. Risks are basically of three types. The first type of risk is beta or market volatility. The second type of risk is investing in small versus big stocks, and the final type of risk is investing in growth versus value stocks. The reason why these factors are considered is because these are three main alternatives investment strategies that an investor can choose. Investor can invest either in stocks which have high beta or low beta. However, this decision will be made according to the expectation of the investor. If the investor is expecting the market to fall then negative correlation with market in a stock would be preferred. However, if the investor thinks that the market is going to climb upwards then it is better for the investor to invest in stock having a positive correlation with the mark et. In either case, the investor is speculating market to perform either way. If the investor chooses to invest in large company, then there are chances that the growth of these stocks would be much less than a new aggressive company. Hence, the investor would not be able to make quick capital gain in these stocks, but stream of income in the form of dividends would be quite high if the investor chooses to invest in a stock of a large company. Similarly, if the investor chooses to invest in the value stock there are chances that the investor would earn high returns, but there are also chances that the investor would not be able to earn any return on these stock. This is in line with Warren Buffets’s and EMH investment theories which state â€Å"Buy the sells and sell the buys† . The fundamental behind this theory is the fact that stocks which have never performed in the past will perform in the future whereas stocks which have performed well in the past will not be per forming as brilliantly as they have done before. Hence, it is better to buy stocks of companies which are relatively lagging behind the blue chip stocks. In other words it is better to buy the dogs of today than stars of the past. 3) Capital Assets pricing model is based on just one facet of the risk return model. This risk is represented by beta and can be explained as stock

Capturing memorable moments Essay Example | Topics and Well Written Essays - 750 words

Capturing memorable moments - Essay Example The author, Bill McKibben, in his work â€Å"Year One of the Next Earth,† writes about how the frequency and the intensity of all the hurricanes are increasing year after year. Initially he describes the hurricane by explaining what it actually is and then goes on to talk about a research paper which was presented by a scientist named, Kerry Emmanuel, who had researched on the intensity of all the hurricanes had had shockingly discovered their rising intensity with each passing year. Just after Emmanuel had presented his paper, he saw the nature itself approving it by the incident of the hurricane Katrina. His paper was the proof that the old extreme was the new norm. The author after providing this shocking discovery goes on to discuss about the reasons why the intensity of the storms and hurricanes are increasing. He says that the humans themselves are the reason for the rising intensity of the natural disasters. This is because the destructive activities such as production of smoke leading to overall global warming are accountable for the rise of the natural disasters. He says that global warming leads to natural rise of temperature, which is leading to thwarting of the ice in the Polar Regions, and rise in sea level. Moreover, the overall rise in temperature is leading to rise in temperature in the tropical areas. Even the area where the temperature was unfit for breeding of mosquitoes filled with them now due to the absurd rise in temperature. All these disasters are accountable to the malpractices practiced all over the world. The writer states in the end that we are living in a different world than the world our parents or grandparents use d to live in. Although we do not realize it apparently but the pictures that the writer has provided along with the text proves it. The writer finally concludes that we could call this the Earth that we are living in is the first year of the New Earth and therefore in this way the writer

Current Issues Assignment( change another topic about this) Essay - 1

Current Issues Assignment( change another topic about this) - Essay Example Civil societies have always been staunch defenders of human rights in autocratic systems an example is Liu Xiaobo who was given an 11-year sentence for subversion of state power. Li et al (104) acknowledges by asserting that the â€Å"demand for human rights in china today is actually an indispensable step in the country’s modernization plans† The Chinese economy has been growing rapidly and that the pace of human rights reforms have been picking up and that it should be noted that political reforms should not be equated to legal reforms, they be correlated but not synonymous Political reforms should set the tone for legal reforms; adoption of democratic principles in governance ultimately has a bearing on the justice system of a nation. For BeÃŒ ja et al (158) a â€Å"harmonious society should feature democracy, the rule of law, equity, justice, sincerity, amity and

Linguistics research training Essay Example | Topics and Well Written Essays - 1000 words

Linguistics research training - Essay Example The ages between 16 and 18 are a grey area, and here care would have to be taken to ensure that the subject is mature enough to understand what is being proposed. If there is any doubt here, more stringent ethical decisions would have to be taken. Once the age issue is resolved, there are important questions about how public or private a website is intended to be. One way to decide this is to ask the question: â€Å"Are participants in this environment best understood as â€Å"subjects† (in the senses common in human subjects research in medicine and the social sciences) – or as authors whose texts/artifacts are intended as public? (AoIR, 2002, p. 7). In some blogs and homepages the author is offering material for public view, with no password or other restrictions on viewing. In this case informed consent to research the website would have to be obtained from the owner. If there is a community involved, which assumes some kind of small group privacy, then permission f rom the whole group needs to be obtained: â€Å"â€Å"†¦ the greater the acknowledged publicity of the venue, the less obligation there may be to protect individual privacy, confidentiality, right to informed consent, etc.† (AoIR, 2002, p. ... 9) Participants must have the right to withdraw at any point, and to see the results of any research which involves them. Task 2. Situation Two: Radio discourse research You choose to analyse a politician’s discourse as produced during a radio program. What ethical issues need to be resolved (if any)? Radio is a public medium and so there is no need to obtain the politician’s permission to study the discourse that is produced on the radio. Privacy or anonymity is not a concern in this case. The radio company is a business, however, with rights such as copyright over the material it produces, and normally there are restrictions on what can be recorded from the air. Permission would have to be sought from the radio company either to use their recordings (preferable) or to make private recordings. Task 3. Situation Three: library research You choose to do a study on the discourse of SIN during the 2nd World War. What ethical issues need to be resolved (if any)? This is a t ricky ethical issue because it involves contrasting moral definitions which are hard to pin down and analyse. Depending on the method used, the researcher would need to disclose his/her own position either formally or implicitly. One way of doing this is to define the terminology of analysis very carefully, and contrast this with other definitions which are used in various sources. The data found in the library needs to be referenced thoroughly, to ensure that sources are acknowledged, but the researcher needs to reflect very carefully on the way that the topic is approached, the vocabulary used, and any hidden bias or prejudice that might creep in to the use of heavily loaded terms such as â€Å"sin.† Matthews and Ross give good advice on this point, which should be heeded when

McWane, Inc. Essay Example for Free

McWane, Inc. Essay McWane, Inc. is a privately held company based in Birmingham, Ala., which owns plants across the country and Canada and who is one of the world’s largest manufacturers of cast iron sewer and water pipe (McWane Mess). From 1995-2003, McWane plants, in the U.S., had 4,600 worker injuries (CBC News). The company was also cited for more than 400 safety violations and 450 environmental violations during that same period (Barstow, Foundry). Tyler Pipe, one of McWane’s plants, was described by one its workers. He said it was â€Å"a dim, dirty, hellishly hot place where men are regularly disfigured by amputations and burns, where turnover is so high that convicts are recruited from local prisons, where some workers urinate in their pants because their bosses refuse to let them step away from the manufacturing line for even a few moments† (Barstow and Bergman, Texas). A federal investigation began in January 2003, which was the same month The New York Times published a series of articles that described McWane as one of the nations most persistent violators of workplace safety and environmental laws (Barstow, Foundry). CAUSES Root organizational causes and regulatory weakness factors contributed to the McWane scandal. The structure at McWane contributed to the scandal because it was one of the root organizational causes. McWane Inc. is a privately held organization where the family and a few close individuals run it. The family is described as secluded and very private (Barstow and Bergman, Family’s). Executives and family members repeatedly decline interview requests and rarely talk to the media (Barstow and Bergman, Family’s). In 2007, of McWane’s twenty-five divisions, only two included McWane in the name (Wisniewski). Even though McWane’s divisions were places where the desperate seek work (Barstow and Bergman, Texas), society did not hold the right people accountable. Many individuals do not know McWane is connected because the plant names rarely reflect their owner. Without interviews, the fact that it is a private company, and that it keeps its name off new divisions, McWane lacks transparency to help keep it accountable. The seclusion and privacy of the family makes it seem as though they stay out of the public eye for a reason. McWane’s organizational culture was also a root cause that contributed to the scandal. One phrase was posted throughout the plants and was posted in large orange print: REDUCE MAN HOURS PER TON (Barstow and Bergman, Texas). This phrase created a culture that drove all aspects of the McWane companies. McWane was not the best place to work. In fact, there were times when turnover was 100 percent at one plant (The McWane Mess). High turnover is one measure of the culture at McWane and it shows how employees fit into that culture. The high turnover was disturbing and not normal for the industry. Acipco, a direct industry competitor, had a yearly turnover of around half a percent (Barstow and Bergman, Family’s). The organizational culture that focused on one key phrase continued into work shifts. There were two 12-hour shifts instead of the normal three shifts of eight hours. At the end of a shift, supervisors often called for four more hours of work. Therefore, employees worked 16-hour days, sometimes seven days a week (Barstow and Bergman, Texas). Leadership was also a root organizational cause. McWane never developed a system to hold supervisors accountable for safety; however, their system for holding supervisors accountable for production downtime (Barstow and Bergman, Texas). Federal rules require conveyor belts be shut off for maintenance. They also require that all belts have safety guards. The rules are important because they help prevent workers from being caught and crushed. In one instance, inspectors discovered that a belt violated both of those rules (Barstow and Bergman, Texas). This negligence contributed to one of the nine deaths that occurred at McWane divisions from 1995-2003 (Barstow and Bergman, Deaths). Leaders in the company gave orders that were in clear violation of laws. Another example of leadership was what to do with 200 old tires. It would have cost about $750 to have them brought to a waste dump. However, documents show that a plant manager ordered the tires be burned, even though he had been notified burning tires violated air-quality laws (Barstow and Bergman, Texas). The managers like the one above were partially victim to those higher up. The leadership style at McWane was clearly a top down approach. One plant manager stated, â€Å"I was like a robot. All that mattered was getting machines moving again after an accident† (The McWane Mess). One risk manager says that a top down approach creates a disconnection between plant managers and executives. He also explains that this disconnection increases in privately held companies due to a lack of accountability (The McWane Mess). OSHA’s regulatory and oversight weakness contributed to the McWane scandal. At the time, the laws in place were not severe enough detour McWane from committing them. At the time of the scandal, the crime, of willfully violating safety rules that cause the death of a worker, was a misdemeanor. That crime was a less serious than harassing a wild burro on federal lands, which was punishable by up to one year in prison (Barstow and Bergman, Deaths). The fines McWane had to pay for violations were lower than the cost of having the machines down due to implementing and following safety regulations. A McWane executive confessed that Tyler Pipe had willfully ignored workplace safety laws, a crime that caused the death of a worker. The company only paid a $250,000 fine (The McWane Mess). OSHA let off McWane through payments and it did not do more to ensure the safety of workers in McWane plants. Weak labor union oversight also played a role in contributing to the scandal. The labor unions that represented McWane workers were usually small and overwhelmed with cases. The unions had no bargaining power because they were small, so they could not effectively protect their workers from low wages, hours per shift, or dangerous environments. A United Steelworkers union official attempted to tour Tyler Pipe with a safety and health specialist but had been rejected twice (The McWane Mess). CONSEQUENCES McWane scandal had widespread consequences. Those consequences affected the company as well as the environment and manager at the plants. The scandal produced financial woes and a tainted reputation for McWane. McWane was ordered to pay $19 million in fines and restitution in 2006 (Barstow, Foundry). In addition, McWane was ordered to pay $8 million in fines for dozens of workplace safety and environmental crimes in 2009 (Barstow, Iron Pipe). The fines that McWane had to pay were substantially more than any other fines it had previously received. The McWane scandal also greatly affected the environment. As stated before, McWane had over 450 environmental violations (Barstow, Foundry). One of those incidents, the burnt tires, caused toxins to be released directly into the air. Another incident that McWane was charged with was illegally dumping oil into the Atlantic Ocean. McWane had dumped so much oil that it created an 8.5-mile-long slick (Barstow and Bergman, Family’s). Lastly, the McWane scandal affected the lives of those managers who were charged criminally. Four McWane plant managers were convicted or pled guilty to committing environmental crimes (United States v. Atlantic). These people took risks that ended in tarnished reputations, criminal records, jail time, and hefty fines. PREVENTION Prevention is key so that scandals, like McWane, do not happen again. One preventative step is that the government has set stronger penalties for companies who repeatedly violate safety and environmental laws. The government has also set out better guidelines to prosecute repeat offenders (Barstow, Guilty Verdicts). Another preventative measure is that OSHA is looking to increase its criminal enforcement arm. In four years, OSHA only sent 21 percent of eligible cases to the Department of Justice, and the DOJ acted on 4 percent (McGarity et al). If OSHA can increase its force, it can ensure the safety of more workers. The increased force would be a deterrent for companies, because the chances of it being charged would increase. One last way to prevent other scandal is to have the White House and Congress step up (McGarity et al). If these two groups could work together and provide OSHA with a larger budget, OSHA could then improve everything that they do. It all comes down to the fact that OSHA is there for the people, but with a small budget, they cannot do the best job possible. Works Cited Barstow, David, and Lowell Bergman. At a Texas Foundry, an Indifference to Life. The New York Times 8 Jan. 2003. Print. Barstow, David, and Lowell Bergman. Deaths on the Job, Slaps on the Wrist. The New York Times 10 Jan. 2003. Print. Barstow, David, and Lowell Bergman. Familys Profits, Wrung From Blood and Sweat. The New York Times 9 Jan. 2003. Print. Barstow, David. Foundry Pleads Guilty to Environmental Crimes. The New York Times 23 Mar. 2005. Print. Barstow, David. â€Å"Guilty Verdicts in New Jersey Worker-Safety Trial.† The New York Times 27 April 2006. Print. Barstow, David. Iron Pipe Maker Is Fined $8 Million for Violations. The New York Times 25 Apr. 2009. Print. CBC News: The Fifth Estate A Toxic Company The Canadian Connection. CBCnews. CBC/Radio Canada, 8 Jan. 2003. Web. McGarity, Thomas, Rena Steinzor, Sidney Shapiro, and Matthew Shudtz. Workers at Risk: Regulatory Dysfunction at OSHA. The Center for Progressive Reform. Feb. 2010. Web. The McWane Mess. ISHN Magazine. BNP Media, 11 Feb. 2010. Web. United States v. Atlantic States Cast Iron Pipe Company Et Al. Fact Sheet. EPA. Environmental Protection Agency, 9 June 2011. Web. Wisniewski, Barbara J. The McWane Story. McWane, 2012. Print.

Environmental Health Essay Example for Free

Environmental Health Essay What is Environmental Health? Environmental health is the branch of public health that is concerned with all aspects of the natural and built environment that may affect human health. It also refers to the theory and practice of assessing and controlling factors in the environment that can potentially affect health. Environmental Health is the field of science that studies how the environment influences human health and disease. â€Å"Environment,† in this context, means things in the natural environment like air, water and soil, and also all the physical, chemical, biological and social features of our surroundings. The man-made, or â€Å"built,† environment includes physical structures where people live and work such as homes, offices, schools, farms and factories, as well as community systems such as roads and transportation systems, land use practices and waste management. Consequences of human alteration to the natural environment, such as air pollution, are also parts of the man-made environment. The social environment encompasses lifestyle factors like diet and exercise, socioeconomic status, and other societal influences that may affect health. The Media of Environmental Hazards Air, water and food are the major environmental media or vectors through which exposure to hazardous environmental agents occur. Environmental hazards †¢ The major environmental hazards and their relative importance in various environmental settings. †¢ Chemical agents: pesticides, VOC’S, and PCB’S †¢ Physical agents: ionizing and non-ionizing radiation, vibration, temperature, and noise. †¢ Biological agents: infectious and allergic disorders Interaction between hazardous exposures and humans †¢ Four characteristics critical to exposure assessment: †¢ Route ( Inhalation, Ingestion, Dermal) †¢ Magnitude (Concentration or Dose) †¢ Duration ( Minutes, Hours, Days, Lifetime) †¢ Frequency (Daily, Weekly, Monthly, Seasonally) All of the environmental media are possible exposure routes, and should be considered in a risk assessment. †¢ Humans have access to environmental toxicants by contaminated food, drinking contaminated water, and breathing contaminated air

Economic Changes to the Welfare State

Economic Changes to the Welfare State Write a 2000 words essay describing the economic aftermath of the Welfare state in the last century I. Introduction A welfare state is broadly defined as a state in which the government/the public sector undertakes key roles in the production and distribution of economic activities with the objective of protecting and promoting the economic and social well-being of its citizens. A welfare state is essentially a mixed economy type of economic system where the government undertakes a greater proportion of economic activities. This essay describes the economic aftermath of the welfare state in the last century. The essay is organised as follows. Section II focuses on the theoretical foundations of the welfare state, while Section III concentrates on the economic aftermath of the welfare state. Section IV finally concludes the essay. II. Theoretical Foundations of the Welfare State The theoretical foundations described in this essay are from; (a) classical economics, (b) Keynesian economics, (c) Suzumura (1999), (d) Barr (1992), and (e) Heath (2011) Classical economics The classical economists including Adam Smith favoured a minimal role for the public sector. Their preference was for a limited role for the government in the provision of essential public works, the maintenance of law and order, and the defence of the country. They believe that the government’s role is to provide these core activities to provide an enabling environment for the market/private sector to undertake economic activities for economic growth. Keynesian economics Keynesian economics was used to justify an expansion in the economic role of the public sector. Keynesian economics created pressures on the government to stabilise the economy by helping to sustain the disposable income of individuals during cyclical fluctuations. Suzumura (1999) argues that welfare economics plays critical roles in enhancing human well-being and in the design and implementation of welfare state policies. Welfare economics is a normative concept and in general takes account of both efficiency and equity. On equity grounds, society may prefer an inefficient resource allocation for reasons for equity justice and this provides a justification for government intervention in the economy. Suzumura argues that the enlarged concept of welfare economics to incorporate equity justice has also extended the concept of well-being to incorporate/capture the basic considerations as liberty, opportunity and procedural justice and that this widening of the concept of well-being should reflect itself properly in the concept and agenda of the welfare state. Based on this conceptual framework, Suzumura then employs Amartya Sen’s concepts of functions and capabilities as vehicles to examine an individual’s advantages in the welfare s tate. To Suzumura the welfare state consists of one main system of competitive mechanism and three subsystems of (i) the competitive policy subsystem, (ii) the co-ordination policy subsystem, and (iii) the social security subsystem. Suzumura concludes that the task of the welfare economics in the welfare state is to deliberately design the main system and the three subsystems of the welfare state so that the whole system becomes incentive compatible to make it work effectively to maximise the well-being of the individuals in the society in terms of liberty, opportunity and procedural justice. Barr (1992) provides another theoretical foundation of the welfare state. Barr’s thesis and his contribution is on information problems for an efficiency case for various types of state intervention. He identifies two broad types of imperfect information problems leading to market failure in dealing with risks as adverse selection and moral hazard. The insurance industry was the focus of Barr’s analysis. Adverse selection results from asymmetric information between buyers and sellers of insurance, with buyers having more information than sellers and thus making it difficult to establish the ideal price for each individual. These characteristics of adverse selection cause the problems of (i) unstable pooling equilibrium because low risks drop out or because of competitive behaviour by insurers, and (ii) inefficient separating equilibrium, if it exists. Thus, in the face of adverse selection, the market is inefficient, or fails entirely and the state intervenes by making membership compulsory with social insurance as a typical example. Heath (2011) identifies the three normative models as redistributive, communitarian and public economics. The redistributive model describes the redistribution of resources to ensure that the outcomes produced by the market economy are less unequal.. The underlying assumption under the redistributive model is that the market is to maximise efficiency while the state promotes equity through redistribution by allocating initial endowments and adjusting final outcomes. The communitarian model considers the imposition of moral limits on the scope of the market so as to resist the commodification of certain domain of interaction. It is argued under this model that basic human needs should be satisfied through communal provision in which everyone is guaranteed a share rather than through commodification. The public economics model regards the state as correcting market failure, either through regulation, subsidisation and taxation, or the direct provision of goods and services. This model is referred to as the economic model because of the emphasis put on Pareto efficiency and the narrow conception of public goods based on Samuelson’s definition. Under the public economics model, market failure allows for the intervention of the state in economic activities. III. Economic Aftermath of the Welfare State The economic measure of welfare state activities is given by the proportion of public expenditure/spending to the Gross Domestic Product (GDP), that is, as a share of GDP. Gwartney, Holcombe and Lawson (1998) argue that even after providing for a generous definition of the concept of core functions to include (i) the protection of persons and property, (ii) expenditures on national security, (iii) expenditure on education, (iv) expenditure on physical infrastructure, and (v) the operational costs of the central bank to maintain a stable monetary regime; the share of the expenditures on core functions for most developed countries did not exceed 15% of GDP up to 1996. Meanwhile as at 1996, the share of government expenditure as a percentage of GDP was above 45% in most developed countries. The authors argue that this higher percentage above the required percentage for the core functions exerted a negative impact on the economy in terms of slower economic growth. Their findings indicate that a 10% increase in government expenditure as a share of GDP results in approximately 1% reduction in GDP growth. The authors assigned the following reasons for this ou tcome; (i) higher taxes/and or additional borrowing to finance government expenditures impose excess burden on the economy, (ii) as government grows, its productivity declines. This is characterised by the following trajectory – expenditure on core functions increases productivity but expenditure exceeding the core functions leads to diminishing returns and more and more expenditure eventually produces negative returns which leads to productivity declines, (iii) the political process accompanying increased public expenditure inhibits the entrepreneurship that drives economic growth through the discovery process. It is argued that as entrepreneurs discover new and improved technologies, better methods of production and opportunities that were previously overlooked, they are able to combine resources into goods and services that create wealth and economic growth, and (iv) the growth in government expenditure was characterised by heavy involvement in redistribution of income and regulatory activities that encouraged individuals to seek personal income via government favours rather than through production in exchange for income. Eventually resources are shifted from wealth creating activities toward the pursuit of wealth transfer which retards economic growth and generate income levels well below the economy’s potential. Tanzi and Schuknecht (1998) argue that from the late 19th century to early 20th century total government expenditure was less than 12% of GDP with expenditure covering the core functions. In the 1920s, the average total expenditure increased to nearly 20% of GDP. In 1937 public spending went up to an average of 23% of GDP resulting from the effects of the Great Depression. Between 1960 and 1980, there was a rapid increase in public spending from around 28% of GDP around 1960 to 43% of GDP in 1980. They further argue that the increased public expenditure/spending reflecting welfare state activities produced the following effects; (i) growing public spending and debt, (ii) rising real interest, (iii) slower growth, (iv) less attractive investment destination by international investors, even under growing globalisation, growing competition and capital mobility, (v) disincentive effects caused by higher taxation, and (vi) large-scale redistributive expenditures with negative impact on gr owth, employment and welfare. The authors’ table 6 (page 83) provides a comparative analysis on the size of government and economic performance as at 1990 between big governments and small governments. Big governments are equated to states with higher government expenditure, that is, with GDP shares exceeding 40% while small governments show government expenditures of less than 40% of GDP. The main findings were based on the following indicators of economic performance; (i) real GDP growth, (ii) Gross fixed capital formation (in percent of GDP), (iii) inflation (1986-1994), (iv) public debt (in percent of GDP), (v) economic freedom indicator, (vi) size of shadow economy (in percent of GDP), (vii) PPP-based per capita GNP (in US$), and (viii) standard deviation of GDP growth. The summary findings were as follows; (a) real GDP growth over a longer period lower in big government countries and that could account for growing unemployment experienced in welfare states with big gove rnments, (b) GDP per capita based on Purchasing Power Parity (PPP) much higher in countries with small governments, (c) based on the ratio of the standard deviation and the average growth rate (the coefficient of variation), there was no evidence that higher public spending leads to more stable growth (i.e no evidence that welfare states exhibited more stable growth rates). This indicator was to provide evidence on one of the main justifications of Keynesian economics that growing public spending is needed for a stabilisation policy to reduce fluctuations in growth over the business cycle, (d) gross fixed capital formation and inflation did not show much difference across groups of countries (i.e both big and small governments recorded almost the same rates), (e) public debt averages almost 80% of GDP in countries with big governments in 1990 – leading to the payment of considerable risk premiums on public debt obligations (higher real interest rates), (f) economic freedom in countries with big governments worse than countries with small governments, and (g) a strong correlation between spending by governments (and corresponding taxes) and the size of the shadow economy (almost 18% of GDP for big governments compared with 9.4% foe small governments in 1996). The authors recommend that fiscal reforms and lower public spending are needed in many countries with big governments in order to increase economic growth without sacrificing much social and economic well-being. IV. Conclusion In the current globalised world where technology is making major strides, the role of the state should be significantly different from the role played to the end of last century. The economic aftermath of the welfare state in the last century indicates that to increase economic growth, the state should now play a more significant and intelligent regulatory role of providing a level playing field which allows the private sector to expand to areas traditionally undertaken by the state. The role of the state in income redistribution and in providing safety nets is very important but needs reassessment by policymakers. Targeted coverage and not universal coverage is what is needed and with the concept of redistribution narrowly defined to avoid many inefficient policies pursued under the justification of redistributing income. REFERENCES Barr, Nicholas, â€Å"Economic Theory and the Welfare State: A Survey and Interpretation†, Journal of Economic Literature, Vol. 30, No. 2 (Jun. 1992); pp 741-803 Gwartney, James, Holcombe, Randell, and Lawson, Robert, â€Å"The Scope of Government and the Wealth of Nations†, Cato Journal Vol. 18, No. 2 (Fall 1998); pp 163-190 Heath, Joseph, â€Å"Three Normative Models of the Welfare State†, Public Reason, 3 (2), 2011; pp 13-43 Suzumura, Kotaro, â€Å"Welfare Economics and the Welfare State†, Review of Population and Social Policy, No. 8, (1999); pp 119-138 Tanzi, Vito and Schuknecht, Ludger, â€Å"Can Small Governments Secure Economic and Social Well-being?† Fraser Institute, 1998 YAW BEDIAKO