POLITICAL AND ECONOMIC INSTITUTIONS

POLITIC
Definition of politic
Politic is the set of activities that are associated with making decisions in groups, or other forms of
power relations between individuals, such as the distribution of resources or status. The academic study of
politics is referred to as political science.
It may be used positively in the context of a "political solution" which is compromising and non-
violent, or descriptively as "the art or science of government", but also often carries a negative connotation.
For example, abolitionist Wendell Phillips declared that "we do not play politics; anti-slavery is no half-jest
with us. “The concept has been defined in various ways, and different approaches have fundamentally
differing views on whether it should be used extensively or limitedly, empirically or normatively, and on
whether conflict or co-operation is more essential to it.
A variety of methods are deployed in politics, which include promoting one's own political views
among people, negotiation with other political subjects, making laws, and exercising force, including
warfare against adversaries. Politics is exercised on a wide range of social levels, from clans and tribes of
traditional societies, through modern local governments, companies and institutions up to sovereign states,
to the international level. In modern nation states, people often form political parties to represent their ideas.
Members of a party often agree to take the same position on many issues and agree to support the same
changes to law and the same leaders. An election is usually a competition between different parties.
A political system is a framework which defines acceptable political methods within a society. The history
of political thought can be traced back to early antiquity, with seminal works such as Plato's Republic,
Aristotle's Politics, Chanakya's Arthashastra and Chanakya Niti (3rd century BCE), as well as the works of
Confucius.
There are 4 definitions of politic
1. Politics as the art of government: ‘Politics is not a science . . . but an art’, Chancellor Bismarck is
reputed to have told the German Reichstag. The art Bismarck had in mind was the art of government,
the exercise of control within society through the making and enforcement of collective decisions.
This is perhaps the classical definition of politics, developed from the original meaning of the term in
Ancient Greece.
2. Politics as public affairs: A second and broader conception of politics moves it beyond the narrow
real of government to what is thought of as ‘public life’ or ‘public affairs’. In other words, the
distinction between ‘the political’ and ‘the non-political’ coincides with the division between an
essentially public sphere of life and what can be thought of as a private sphere. Such a view of
politics is often traced back to the work of the famous Greek philosopher Aristotle. In Politics,
Aristotle declared that ‘man is by nature a political animal’, by which he meant that it is only within
a political community that human beings can live the ‘good life’. From this view-point, then, politics
is an ethical activity concerned with creating a ‘just society’, it is what Aristotle called the ‘master
science’.
3. Politics as compromise and consensus: The third conception of politics relates not to the arena within
which politics is conducted but to the way in which decisions are made. Specifically, politics is seen
as a particular means of resolving conflict: that is, by compromise, conciliation and negotiation,
rather than through force and naked power. This is what is implied when politics is portrayed as ‘the
art of the possible’. Such a definition is inherent in the everyday use of the term. For instance, the
description of a solution to a problem as a ‘political’ solution implies peaceful debate and arbitration,
as opposed to what is often called a ‘military’ solution. Once again, this view of politics has been
 traced back to the writings of Aristotle and, in particular, to his belief that what he called ‘polity’ is
the ideal system of government, as it is ‘mixed’, in the sense that it combines both aristocratic and
democratic features. One of the leading modern exponents of this view is Bernard Crick. In his
classic study In Defence of Politics.
4. Politics as power: The fourth definition of politics is both the broadest and the most radical. Rather
than confining politics to a particular sphere (the government, the state or the ‘public’ realm), this
view sees politics at work in all social activities and in every corner of human existence. As Adrian
Leftwich proclaimed in What is Politics? The Activity and Its Study (2004), ‘politics is at the heart
of all collective social activity, formal and informal, public and private, in all human groups,
institutions and societies’. In this sense, politics takes place at every level of social interaction; it can
be found within families and amongst small groups of friends just as much as amongst nations and
on the global stage.
ECONOMIC INSTITUTE
Introduction Economic institutions have re-emerged at the Centre of attention in development
economics after a long period when their existence and smooth functioning was assumed in the hypotheses
of neo-classical economics. Recent analyses using cross-country regressions suggest that it is the quality of
institutions that is the single most important difference between those economies in the developing world
that have grown strongly and those that have not. However, these insights have not necessarily produced
useful guides for policy-makers. It is one thing to recognize the importance of institutional quality, but quite
another to specify what makes for quality and to suggest how it may be improved. As a first step towards
understanding more about institutions and their quality, three questions arise: how are economic institutions
created, how do they function, and with what effects? To begin to answer these questions, we need a
working definition of economic institutions and an associated set of concepts.
Definition of economic
Economic is the social science that studies how people interact with value; in particular, the
production, distribution, and consumption of goods and services.
Economics focuses on the behavior and interactions of economic agents and how economies work.
Microeconomics analyzes basic elements in the economy, including individual agents and markets, their
interactions, and the outcomes of interactions. Individual agents may include, for example, households,
firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production,
consumption, saving, and investment interact, and factors affecting it: employment of the resources of labor,
capital, and land, currency inflation, economic growth, and public policies that have impact on these
elements.
Other broad distinctions within economics include those between positive economics, describing
"what is", and normative economics, advocating "what ought to be"; between economic theory and applied
economics; between rational and behavioral economics; and between mainstream economics and heterodox
economics.
Economic analysis can be applied throughout society, in real estate, business, finance, health care,
engineering and government. Economic analysis is sometimes also applied to such diverse subjects as crime,
education, the family, law, politics, religion, social institutions, war, science, and the environment.
History of economic
Economic writings date from earlier Mesopotamian, Greek, Roman, Indian subcontinent, Chinese,
Persian, and Arab civilizations. Economic precepts occur throughout the writings of the Boeotian poet
Hesiod and several economic historians have described Hesiod himself as the "first economist”. Other
notable writers from Antiquity through to the Renaissance include Aristotle, Xenophon, Chanakya (also
known as Kautilya), Qin Shi Huang, Thomas Aquinas, and Ibn Khaldun. Joseph Schumpeter described
Aquinas as "coming nearer than any other group to being the "founders' of scientific economics" as to
monetary, interest, and value theory within a natural-law perspective.

Two groups, who later were called "mercantilists" and "physiocrats", more directly influenced the
subsequent development of the subject. Both groups were associated with the rise of economic nationalism
and modern capitalism in Europe. Mercantilism was an economic doctrine that flourished from the 16th to
18th century in a prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's
wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold
and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The
doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be
exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit
manufacturing in the colonies.
Physiocrats, a group of 18th-century French thinkers and writers, developed the idea of the economy as
a circular flow of income and output. Physiocrats believed that only agricultural production generated a clear
surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy
of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats
advocated replacing administratively costly tax collections with a single tax on income of land owners. In
reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire,
which called for minimal government intervention in the economy.
Adam Smith (1723–1790) was an early economic theorist. Smith was harshly critical of the
mercantilists but described the physiocratic system "with all its imperfections" as "perhaps the purest
approximation to the truth that has yet been published" on the subject.
Economic systems
Economic systems are the branch of economics that studies the methods and institutions by which
societies determine the ownership, direction, and allocation of economic resources. An economic system of
a society is the unit of analysis.
Among contemporary systems at different ends of the organizational spectrum are socialist systems and
capitalist systems, in which most production occurs in respectively state-run and private enterprises. In
between are mixed economies. A common element is the interaction of economic and political influences,
broadly described as political economy. Comparative economic systems studies the relative performance
and behavior of different economies or systems.
The U.S. Export-Import Bank defines a Marxist–Leninist state as having a centrally planned economy.
They are now rare; examples can still be seen in Cuba, North Korea and Laos.