If voters are risk neutrall they will oppose policy

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If voters are risk-neutral(L)They will oppose policy which majority will benefit from it.They will vote for the policy when minority(though significant number) will gain from the policy.If the uncertain voters estimate their change of gaining equal to that of the other uncertain voters, it will be rational to vote no.Evaluate the trade off between short-term cost and long-term benefit to both participants and economy.Reforms are often instituted after a crisis.(Debt crisis in Latin America: market friendly policy).Exception: more severe debt crisis in Africa did not promote reform.(greater outside pressure and resources were brought to bear on Latin America because of the greater threat its insolvency(L) represent to major banks).Institutions and path dependencyInstitutions are ‘ formal and informal rules of the economic game’-Douglass NorthPath dependency: a condition in which the past condition of an individual or economy affects future conditions. (eg. Colonial origin of comparative development, poverty and low productivity trap, Mathusian traps, child labor trps).If the inefficient right can provide leader greater private gains, then there is no incentive to change it.The political economy of successful policy reform and implementation will probably require continued and extensive interaction to contribute from their research.Democracy versus autocracy: which facilitates faster growth?Under democracy:Politicians seeking reelection have an incentive to reflect the will and interests of a majority of the people.However, a looming election gives an incentive to pursue(L) short-term accomplishments( L) rather than what is necessary for long-term development. The corrupt politician who knows he or she will soon be voted out of office has an interest to seal as much as possible.Under autocracy(L):13
There are fewer constraint on what can be stolen and for how long. But the politician who is reasonably confident of remaining in power for a long-time can pursue long-term development strategies.Singapore, South Korea and Taiwan appear to have enjoyed some potential benefit of autocracy for development:-Less corruption than other developing countries-growth-enhancing policies worked best when a regime sees that greater chance of remaining in power lies in achieving a maximum rate of growth.2 different views towards democracy:1)the relationship between democracy and economic growth is not robust(L). 2)democracy is good for broader development objectives, such as equity, education, health and famine(L) prevention.Role of NGOs in development and the broader citizen sectorNGOs(non-governmental organizations)4 types of goods:Type 1: private goods(high excludability(L), high rivalry)Type 2: public goods(low excludability, low rivalry)Type 3:common pool/common-property(low excludability, high rivalry)(eg. Natural resources: fisheries, pastures, forest).

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