Ipa Cheat Sheet

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AIPA 2: UNDERSTANDING ACTORS, INTERESTS & POWER Institutions  Basic level – states exist to provide (1) defence and (2) social order  this requires the presence of a functioning economy.  State not only produces, consumes and redistributes; it’s also the main source and enforcer of “rules of games”.  “Rules of games” are institutions  institutional quality is related to economic performance.  Evidence: No country has gotten rich with bad institutions. Politics  Politics is the process of creating new institutions. Existing institutions create a constraint on this process.  Political processes can be analysed in terms of Actors involved in the processes, their interests and their relative power (AIP).  Actors: Political,…show more content…
Not just a cost of business but a real cost with social implications. Stay clean by (1) hiring ethical people and (2) putting place an anti-corruption system with external audits. IPA 5: STATE STRUCTURES 3: VARIETIES OF CAPITALISM Economic convergence does not mean institutional convergence. Institutions of capitalism are socially embedded and a product of societal preferences. Coordinated Market Economics: LT focus: Labour and capital immobile. Liberal Market Economics: ST focus: Labour & capital mobile. Key differences of institutional differences across types of capitalism:  Financial capital, Human capital, Ownership, Networks, Management Even among advanced industrialized Western nations, there are key differences e.g. US & Germany.  Germans obtain money from banks; US from capital markets  German firms are with their employers much longer, on average, than US. Germans have higher skilled labour vs. US’s hire-n-fire.  Unions in Germany are stronger but strikes are more peaceful.  Corporate governance in US caters to shareholders. In Germany to stakeholders.  German companies are networked with shared R&D costs vs. US firms on a project basis.  German management is

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