The role of government Development and growth policies contain many elements, but a statement in WB’s Comprehensive Development Framework can serve as a summary: “Structural elements (which) include honest, competent governments committed to the fight against corruption; strong property and personal rights laws supported by an efficient and honest legal and judicial system; a well-supervised financial system that promotes transparency; and a strong social safety net.” Namibia has in most of these areas come a far way, but there will always be room for improvements.
Indeed, one of the most difficult challenges for macro-prudential policy is how to spot excessive optimism or pessimism, especially because we do not yet have a credible theoretical framework that can be applied for such purposes.