Public Choice Exam Review

According to Weingast, what are the characteristics of the natural state

-violence -Lack of perpetuity - Lack if impersonality

Define "doorstep conditions." Describe briefly the three conditions to transition from a natural state to an open-access order highlighted in Weingast's paper.

A doorstep condition the keep component that allows natural states to transition to an open access state. There are 3 doorstep conditions; the rule of law for elites, creation of a perpetual state, and the third condition is consolidated political control of the military. In the first doorstep condition elites in natural states transform their privileges into a set of elite rights that are the same for all elites. The second doorstep condition allows the ability to sustain perpetual organizations. The idea of perpetuity is that the institutions and organizations are defined independently of the people who compose them. The final doorstep condition is the ability to control the the military with political powers.

What type of commodity encouraged the development of a fiscal administration in eastern Congo?

A good that was difficult to tax

Market equilibrium

A price that coordinates the plans of the buyers and sellers

Open Access

All citizens have the ability to form contractual organizations and access the state enforcement

According to Weingast, elections alone is (blank) institution to hold political leaders accountable. A strong (blank) must exist to have a representative democracy.

An insufficient, civil society

What does Olson say about anarchic violence and why is it not ideal?

Anarchic violence is not ideal because a society cannot be functional or work satisfactorily if it does not have peaceful order. With anarchic violence there are not any incentives to produce any goods, because they would be taken by others.

What type of societies, according to Olson, are where individual rights to property and contracts are expected to last across generations?

Democracies

Externalities

External costs are 3rd party costs not born by sellers 3rd party benefits not captured by buyers Markets tend to produce too much of a good that have external costs and not enough good that have external benefits

production in coltan mines with stationary bandits present was _ than production in those where there were. no stationary bandits

Higher

Britain's Glorious Revolution around the 1689 preceded the (blank), in part due to their new found respect, and contract enforcement

Industrial Revolution

Another term for "limited access order" is

Natural State

According to the video, does the government need to be involved in order to solve the dispute between the fisher and factory

No

According to the video, "The Coase Theorem and Negative Externalities," negative externalities can be solved by bargaining if

Property rights are defined; Transactions costs are low;

market demand curve

Shows how much of a product people will buy at a given price

Natural State

Solves the problem of violence by creating rents. It grants various privileges to powerful individuals and groups.

Why did Cromwell and the parliamentarians revolted against the Crown

The Crowned altered property rights arbitrarily.

Rawls' political philosophy stresses a system that achieves

The greatest wealth for the poorest in society.

The invisible hand

The leader of roving bandit settles down and replaces anarchy with government. The invisible hand gives him a fear larger take than if he did not create a government

Weingast describes three types of social order that offer a solution to the problems of violence, institutions, and organizations in various ways. Mention at least two of those types of social orde

Weingast describes three types of social order that offer a solution to the problems of violence, institutions, and organizations in various ways. Mention at least two of those types of social order.

What is the least intrusive government measure to correct this externality

a Pigouvian tax on the producer of $300 per ton of pollution

External costs

are 3rd party costs not born by sellers.

According to Olson, Stationary Bandits are (blank) than autocracy for regular people because (blank)

better, they will have more material wealth

For the purposes of this reading, an important difference between coltan and gold is that

coltan is more difficult to conceal and easier to tax.

Price shocks for resources whose output cannot be taxed induce armed actors to tax the income that the population derives from extracting the resource instead. To do so, they

develop a fiscal administration.

An iPad is a/an ___. fireworks are ____ goods

excludable good; nonexcludable

Gold is to tax because it is __ to conceal from the tax collector

hard, easy

The emergence of the open access order

is relatively new.

Public goods have___ rivalry in consumption and___excludability.

low; low

According to North and Weingast (1989), a critical role of constitutions and political institutions is to __ on the state or rulers

place restrictions

The "mercantilist curse" traps many countries in a cycle of:

political violence and economic underdevelopment

Historical research suggests that the precursors of today's states were

protection rackets motivated by expropriation for an elite.

The _- are so bad that miners move heavy output locally by __

roads, airplane

Rational stationary bandits

settle down and take a part of income in taxes

Autocracies, historically, have had ___ time horizons

short

A free rider refers to

someone who does not contribute to the provision of public goods, but enjoys them anyway.

Public Goods are

- Nonrivalrous - Nonexcludable

We are living in the "most peaceful time" in human history. Why

-Increases in Education -Democracy -Decreases in number of interstate wars

What changes did the Glorious Revolution bring

-Limited the Crown's legislative and judicial power -The parliament reasserted their dominance of taxation issues -Created a balance between Parliament and the Monarchy

Identify the doorstep conditions for transitions

-Rule of law -Perpetual state -Consolidated control over the military

Textbook rationales for government in economics include

-external costs -external benefits -public goods

Open access orders are characterized by

-impersonal exchange. -policy benefits delivered by rules and not by personal benefits. -all citizens having access to courts and being subject to the rule of law.

The U.S. sugar lobby

-is a relatively small, well-organized group. -enjoys concentrated benefits by imposing disbursed costs on the public.