Final Flashcards
Tufte - Political Economy
- Democratic government controls the economy to a strong degree
- Electoral-economic cycle = political motives tied to economic policies in election years
- Solution to defeat trade-off between unemployment and inflation (short-run) = hold presidential election
- Short-run economic shifts:
◦ Economic movements immediately before elections tip the balance
◦ Electorate rewards politicians for economic prosperity
◦ Short-run spurts of economic growth before elections benefit the incumbents
Lipset - Political Economy
- The more economically well-off the country, the more likely it will sustain democracy
- Economic development consists of 4 factors:
1. Wealth
2. Education
3. Industrialization
4. Urbanization
→ All much higher in more democratic countries - Increased wealth = changes societal stratification structure; larger middle class rewards moderate democratic parties + penalizes extremist groups
- Increased education = increases rational decision-making + more rejection of strong-man politics
- Increased urbanization + industrialization = higher rates correlated with stronger democracies
Przeworski - Political Economy
- Democracy is stable in affluent countries
- No country with GDP per capita > $6,055 has ever de-transitioned from democracy to autocracy
Smith - Trade
The greatest improvement in the productive powers of labor = effects of the division of labor
1) increases the dexterity of the workman, 2) saves time, 3) invents a great number of machines
Restraining importation of goods causes a monopoly in the domestic market; this benefits merchants and manufacturers most of all
The “Invisible Hand” principle means that individuals are best at making choices that benefit society
Acemoglu - Trade
The fundamental causes leading to dire poverty include:
1) The geography hypothesis – geography/climate/ecology of a society shapes its technology and the incentives of the inhabitant
2) Institutions hypothesis – some societies have good institutions that encourage investments in technology
- Institutions have property rights, constraints on actions of elites, some degree of equal opportunity and are central to the distribution of income
Blinder - Trade
Offshoring: The Next Industrial Revolution?
Offshoring is the movement of jobs, not the people who perform them, from rich countries to poor ones – result of gains from trade principle
Solutions: transforming educational systems to fit future jobs, not building protectionist barriers against offshoring
Meredith - Trade
The Elephant and the Dragon
Friedman - Poverty
Using the Market for Social Development
Proponent of free market economics → advantage of policy reforms that move toward free, private markets in a rapid, quick way
Partial vs. total decontrol: the best thing to do is to go all the way with decontrolling, although this is usually not politically feasible
Gradualism vs. shock treatment:
- Moving gradually enables capital to transition slowly so there is less costly and more equitable change
- ‘Shock treatment’ is more economically efficient
Overcoming political obstacles
- Dealing with labor unions and unemployment
Easterly - Poverty
Governments are prime suspects for mucking up incentives
- High inflation : creates bad incentives for growth b/c people try to avoid holding money during high inflation
- Keeping exchange rates artificially low → black market premium on currency
- High budget deficits → create anticipation of future tax hikes to reduce deficit and service public debt
Policy mismanagement, poor admin capabilities, corruption, misunderstandings, and misaligned incentives are all part of government
Frank - Development
Developing countries cannot replicate developed countries, for they are underdeveloped and actively undermined in the world system
Based on this logic, developing countries should detach from the world market
Example: underdevelopment of LA countries such as Brazil, which is a result of centuries-long participation in the process of world capitalist development
converted into an export economy→but satellite dev was neither self-generating nor self-perpetuating
Significance: developing countries are economically disadvantaged and should orient politics in diff direction to resolve economic woes
Diamond - Development
Question of why Eurasians dominate in wealth and power; history of interactions among different people is what shaped the modern world through genocide, conquest, and epidemic
Development/oppression
- Indigenous populations were outnumbered and marginalized
- Eg. in much of Central America/Mexico/parts of Indonesia
Linguistic domination
- Disappearance of most of modern world’s 6000 surviving languages
Replaced by English, Chinese, Russian
Acemoglu & Robinson - Development
Economic institutions shape economic incentives
- Incentives to become educated; to save and invest; to innovate and adopt new tech
Inclusive economic/political institutions foster growth, but “extractive” institutions keep countries poor
De Soto - Development
formalized property rights are essential for unlocking economic potential and reducing poverty in developing countries by enabling individuals to use their assets as collateral and participate fully in the formal economy.(THIS IS FROM CHATGPT I JUST HAVENT READ IT YET)
Esping-Andersen - Capitalism
States differ in their levels of generosity and the ways in which basic services are structured
Some welfare states ensure basic citizen needs are met through direct services, others regulate private companies so that they provide some benefits.
Some are universal, some are target at particular constituencies
Three main forms of welfare states: corporatist, liberal, social democratic
Liberal welfare state: means-tested assistance, modest universal transfers, or modest social-insurance plans predominate, and the state encourages the market
Consequences: contains social rights, equality of poverty
US, Canada, Australia
Corporatist welfare states: preservation of status differentials; rights = class/status, heavily shaped by the church
Ex: Austria, France, Germany, Italy
Social-democratic state: principles of universalism and decommodification of social rights extended to new middle classes, fusion of welfare and work
Causes of welfare-states:
Nature of class mobilization – decisively affect the articulation of political demands
Class-political coalition structures – phase of industrialization, decisive in forming state
History of regime institutionalization
Kohli - Capitalism
Economic development is the consequence of effective states, economic stagnation occurs when states are ineffective
- Cause of success is due to the quality of the state that does the intervening
- Creation of effective states within the developing world has generally preceded the emergence of industrializing economies
How state authority is organized:
1) Neopatrimonial: weakly centralized and barely legitimate, characterized by economic failure and lack of ability to build industrial economy.
- Have intervened heavily in their economies with disastrous results
2) Cohesive-capitalist (developmental): cohesive politics; centralized and purpotive structures, support capitalist development
- Developed trade and industry with well-designed, consistent, thoroughly-implemented state intervention
3) Fragmented-multiclass: command authority, but more fragmented
- Mixed political goals
Patterns of state construction
- States acquired some of their core characteristics well before they became activist states
- Heavy impact of colonialism on state formation
Power also affects state efficacy; efficacious states simply have more power at their disposal than less efficacious ones
