Notes on first week readings.

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Political Science
Ingrid L.Stefanovic

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
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