POL S 204 Study Guide - Quiz Guide: Cronyism, Consumer Protection, Financial Statement
Document Summary
Argument that there"s things assoc. w capitalism that promote development: trade, investments in capital goods, investments in human capital, innovation. Why is the government that third party: assignment and enforcement of property rights is a public good, there are scale economies in police power, actors w comparative advantage in violence monopolize that power. What are property rights? (basics: a bundle of privileges, right to restrict access to asset (exclusive, use/divide/transform asset (divisible, earn income from asset and contract w others to license control of asset/sell it (tradable) 2: can incentivize invention and commercialization of innovation, increases rate of return on invention and creates opportunities for inventors to sell their ideas, clear relationship between property rights and development. What are transaction costs: costs of organizing and coordinating production/exchange, supervising and monitoring p/e, measuring production (e. g. quality control and quality assurance, asset specificity and opportunism. Hard to know the value of these assets.
