Just Get Out of the Way by Robert E. Anderson contains advice for developing countries on how to help the business environment.#

The book focuses on just a few problems and takes the approach of examining the traditional advice, then gives a more free-market alternative. The problems are:#

  • Large Companies and Corporate Organization
  • Privatization Procedures
  • Banks: Guarantees and Regulation
  • Bankruptcy Proceedings
  • Competition and Anti-Competitive Behaviour

The arguments are predictable for someone who knows about general free market ideas, but for someone not so immersed in these ideas and/or interested in the specific problems above, the book's arguments are persuasive and detailed.#

What I found most interesting was the case study style description of the free market reforms in New Zealand that the author was a part of.#

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One thing I'd like to quote comes from the chapter on large corporations and styles of corporate ownership. The author is not worried at all about large corporations, but instead corporations with widespread ownership that is ineffective at control management. (The principal-agent problem.)#

The most obvious example of this conflict of interest can be found in the commonly used title for the senior manager of a company in the United States. He typically holds dual titles--chairman of the board and chief executive officer. He is both the head of the board of directors, which is supposed to represent the interest of shareholders, and senior manager of the company. The United States places more emphasis on avoiding conflicts of interest than most other countries. Yet this obvious and serious conflict was until recently largely accepted with little question. It is unreasonable to expect that this person will honestly report to the shareholders about the performance of management and fairly determine the salaries and other compensation of managers when he is the most important manager. In other words, will he place the interest of the shareholders ahed of himself and other managers? If the company is performing badly, does anyone seriously expect that this person will argue that he should fire himself and replace himself with a better manager? [p. 64]

On the other hand, if the company is not widely owned, but instead as one primary stockholder who is both the senior manager and the chairman of the board, then this situation seems to be optimal. Bill Gates and Microsoft seems like a good example.