Textbook Notes (380,777)
CA (168,210)
UTSC (19,296)
POLC38H3 (20)
Chapter

Notes on first week readings.

5 Pages
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Department
Political Science
Course Code
POLC38H3
Professor
Ingrid L.Stefanovic

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Prosperity and Violence
Chapter 1: Introduction
yWhen Bates is exploring the historical and contemporary society he will focus on two things.
yThe economic side of the society, where it increase the average memberÆs income.
yThe political side, where institutions are formed and governed, and above all they fail to alter
using violence.
yCapital is the factor of production that spans time. It could be skills, bridges, cash, universities,
and etc.
yCapital spans time, thus there is a decision to invest entail with risk. Political institution are use to
minimize risk.
yEconomic growth result in an expansion of production and the increase productivity cause by
investing in new technology. Growth can come from the investment organization.
yThe specialization within an organization becomes a growth itself where other depends on others
to success. However, those who have the power who engage in politics and not production know the
use of violence. It usually inflicts losses, so the people in power refrain from violence and delegate
production.
yBoth Kenya and Uganda invested in the production of coffee beans with docks, trucks and
organizations form. Kenya is prosperities while Uganda is living in poverty. The main difference is
that in Kenya the investors have a great chance of making money in the future, while investors in
Uganda are ridden in fear because their future income will be taken by the government, so they donÄt
invest.
A Special Difficulty in Combining Exit and Voice
yThe Nigerian railway is failing to trucking despite the competition and its advantage in long
distance travel.
yThe reason is the corporation expects the public treasury to fund them even if revenue is low. The
most engaged customer of the railway will feel frustrated and leave for the trucking industry.
yUsually the best customers, with strongest voice, are the first to leave if quality deteriorates and
there is an alternative of high quality goods or services. Such as in the case of management and
shareholders. When the management deteriorates, the strongest customer will just sell their share and
buy into another high quality. Management one. This further erodes the quality of the management
when they are not voiced against.
yWhen the price increases, the marginal customers will exit first. Would this mean that customers
who leave because of the price increase is not the same as the customers who leave because of the
quality decrease?
yFor any one individual, a quality change can be translated into equivalent price change. But this
equivalence is frequently different for different customers of the article because of the appreciation of
quality differ widely among them.
yThis means that the rich customer is willing to pay a lot more to keep the original
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quality. They will drop out first if quality deteriorates and there is a non- deteriorated competing
product available; be it at a higher price.
yThey are not the same as marginal customers who care about price. The marginal customer will
leave as soon as there is a lower price.
yHaving the customers who care deeply about the quality to stay put and voice their concerns,
should be a priority for corporations and institutions.
yAs a result, as the quality deteriorates, and there is no substitute for high quality goods, the rich
customers will stay put complain a lot.
yIf nothing is done, then there the strongest part of the chain is the high-quality and the low-quality
goods or services. ThatÆs because the bottom and the top are a lead for a quick exit.
yIf quality declines, than price inclines will not be far behind.
yThe role of voice is important in protecting the quality of life.
yIf the notion that a combination of exit and voice is needed for the best results, is accepted. The
mechanism may rely too much on exit at the lower end of the quality scale, but suffer from a
deficiency of exit at the upper end.
The New Economics of Corruption: a Survey and some New Results
yEverybody is affected by corruption, yet economists are vague in coming up with a solution.
yThe lack of data on corruption is problematic because it doesnÆt narrow the number of theories
out there about corruption.
yThere are three kinds of proposals on order to curb corruption: the lawyerÆs approach, the
businessmanÆs approach, and the economistÆs approach.
yThis approach suggests in the following order, produce tougher laws and enforcement, paying
higher wages to bureaucrats. And increasing the level of competition in the economy.
ySome successful countries like Honk Kong and Singapore uses the lawyers and the businessman
approach, however, the level of competition and liberties are low. The power given to anti-corruption
agencies works on the principle of Äguilty until proven innocentÆ which is hard to apply in order
countries? Thus, there must be distinguish between the lawyerÆs and the businessmanÆs approach.
yData shows that there is a strong negative correlation between corruption and the level of
development of a country.
yThere is an argument that corruption may serve a useful purpose in social welfare. However,
Mauro finds that corruption lowers investment, thereby reducing growth. Furthermore, Mauro finds
that the more efficiency the bureaucrats, the more investments are made.
yThe Public wishes to maximize social welfare; the bureaucratÆs wishes to maximize utility; and
the firmsÆ wishes to maximize profits net of bribes.
yThe public setup bureaucrats to achieve that goal; but the bureaucrats usually have an agenda of
their own; and they affect how much money the firm makes.
yThus, the public must provide the bureaucrats with the appropriate incentive if its goals are to be
achieved.
yThe three types of incentives are monitoring, letting bureaucrats quit, and amount of
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Description
Prosperity and Violence Chapter 1: Introduction OWhen Bates is exploring the historical and contemporary society he will focus on two things. OThe economic side of the society, where it increase the average members income. OThe political side, where institutions are formed and governed, and above all they fail to alter using violence. OCapital is the factor of production that spans time. It could be skills, bridges, cash, universities, and etc. OCapital spans time, thus there is a decision to invest entail with risk. Political institution are use to minimize risk. OEconomic growth result in an expansion of production and the increase productivity cause by investing in new technology. Growth can come from the investment organization. OThe specialization within an organization becomes a growth itself where other depends on others to success. However, those who have the power who engage in politics and not production know the use of violence. It usually inflicts losses, so the people in power refrain from violence and delegate production. OBoth Kenya and Uganda invested in the production of coffee beans with docks, trucks and organizations form. Kenya is prosperities while Uganda is living in poverty. The main difference is that in Kenya the investors have a great chance of making money in the future, while investors in Uganda are ridden in fear because their future income will be taken by the government, so they dont invest. A Special Difficulty in Combining Exit and Voice OThe Nigerian railway is failing to trucking despite the competition and its advantage in long distance travel. OThe reason is the corporation expects the public treasury to fund them even if revenue is low. The most engaged customer of the railway will feel frustrated and leave for the trucking industry. OUsually the best customers, with strongest voice, are the first to leave if quality deteriorates and there is an alternative of high quality goods or services. Such as in the case of management and shareholders. When the management deteriorates, the strongest customer will just sell their share and buy into another high quality. Management one. This further erodes the quality of the management when they are not voiced against. OWhen the price increases, the marginal customers will exit first. Would this mean that customers who leave because of the price increase is not the same as the customers who leave because of the quality decrease? OFor any one individual, a quality change can be translated into equivalent price change. But this equivalence is frequently different for different customers of the article because of the appreciation of quality differ widely among them. OThis means that the rich customer is willing to pay a lot more to keep the original www.notesolution.com
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