How are economic institutions determined?
The economic institutions of a society depend on the nature of political institutions and the distribution of political power in society. As yet, we only have a highly preliminary understanding of the factors that lead a society into a political equilibrium which supports good economic institutions.
How are institutions formed?
We know that formal institutions are shaped by political choices. We also know that there are informal institutions, cultural and social norms that evolve through social interactions and changes in attitudes. Therefore the analysis of the formal institutions and that of the informal ones are both important.
What are institutions of power?
Institutional power is the power wielded by entities like governments, churches, and corporations to control people and direct their behavior through the use of rewards and punishments. Institutional power exists in situations where authority has been socially approved and accepted as legitimate.
What creates good institutions in rich countries?
What do you think creates good institutions that exist in rich countries? These institutions include: property rights, markets, a feeling of safety, long term stability, a society where you can usually trust total strangers, etc.
What makes countries rich and poor?
In common language, the terms “rich” and “poor” are often used in a relative sense: A “poor” person has less income, wealth, goods, or services than a “rich” person. When considering nations, economists often use gross domestic product (GDP) per capita as an indicator of average economic well-being within a country.
Which country can make you rich?
These are some of the reasons why Norway, Denmark, and Sweden are the best countries in the world to get rich. And countries with similar systems, such as Iceland, also offer similar opportunities to get rich, but they are not the only ones.
What should developing countries ask in return?
The developing countries in return must ask for favorable working conditions for their citizens, better infrastructure and transfer of technology. This not only helps in creating a strong economic base but also help in developing the long run.
Why do developed countries want developing countries to Liberalise their trade and investment What do you think should the developing countries demand in return ?( 3 2 5?
Developed countries want developing countries to liberalise their trade and investment because then the MNCs belonging to the developed countries can set up factories in less-expensive developing nations, and thereby increase profits, with lower manufacturing costs and the same sale price.
What should the developing countries demand in return for liberalizing their trade and investment for the developed countries?
(i) In return for liberalising their trade and investment for the developed countries, the developing countries should demand foreign aid from them. (ii) Though WTO is supposed to allow free trade for all, but in practice, the developed countries have unfairly retained trade barriers.
What are the disadvantages of fair trade?
Another disadvantage that is often mentioned is that getting Fair Trade certification is expensive for the individuals and small businesses that the program wants to help. The initial process of getting certified can be expensive. But the benefit to the business is enormous.
What are the four main barriers to trade?
There are four types of trade barriers that can be implemented by countries. They are Voluntary Export Restraints, Regulatory Barriers, Anti-Dumping Duties, and Subsidies.