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.