ETHICS, POWER AND ACCOUNTABILITY (SGXETHPAC) - ETHICS PRAXIS
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Questions and Answers

What is a principal-agent relationship?

  • A relationship between two business partners
  • A relationship between a supplier and a customer
  • A relationship where an agent acts on behalf of a principal (correct)
  • A type of conflict of interest

    • What is a conflict of interest?

  • A type of ethics
  • A breach of contract
  • A violation of fiduciary duty (correct)
  • A type of fraud

    • What is fiduciary duty?

  • A moral obligation to be honest
  • A type of business partnership
  • A legal obligation to act in good faith (correct)
  • A type of contract

    • What is an example of an area where conflict of interest may arise?

    <p>Dealing with suppliers</p> Signup and view all the answers

    What is the consequence of a conflict of interest?

    <p>It leads to corruption</p> Signup and view all the answers

    What does being 'stuck in a compliance mentality' mean?

    <p>Only following the law and policies</p> Signup and view all the answers

    What is the Human Development Index (HDI)?

    <p>A measure of a country's human development</p> Signup and view all the answers

    What is rent-seeking behavior?

    <p>Using wealth or power to influence others</p> Signup and view all the answers

    What is a major factor contributing to failure of accountability institutions?

    <p>All of the above</p> Signup and view all the answers

    What is an example of a form of undue influence that does not constitute corruption?

    <p>Intimidation by politicians</p> Signup and view all the answers

    What is a consequence of bias-related accountability failures?

    <p>The poor remain disadvantaged</p> Signup and view all the answers

    What is the relationship between the principal and the agent in the Law of Agency?

    <p>The agent acts for and in behalf of the principal</p> Signup and view all the answers

    When does a conflict of interest arise?

    <p>When the agent acts in a way that harms the principal</p> Signup and view all the answers

    What is an example of a fundamental human need?

    <p>Physical security</p> Signup and view all the answers

    What is a characteristic of 'capture' in the context of accountability institutions?

    <p>Undue influence by politicians and the criminal underworld</p> Signup and view all the answers

    What was the point about being 'stuck in a compliance mentality'?

    <p>People focus on legal compliance rather than ethical implications</p> Signup and view all the answers

    What is the primary goal of rent-seeking behavior?

    <p>To benefit a narrow sector at the expense of the public good</p> Signup and view all the answers

    Which of the following is an example of rent-seeking behavior?

    <p>A government official accepting bribes to favor a particular company</p> Signup and view all the answers

    What is the result of rent-seeking behavior on the public good?

    <p>It harms the public good</p> Signup and view all the answers

    What is the term for the practice of influencing legislation for personal benefit?

    <p>Influence-peddling</p> Signup and view all the answers

    What is an example of conflict of interest in a public transport project?

    <p>A government official owning shares in a transportation company</p> Signup and view all the answers

    What is the primary difference between profit-seeking and rent-seeking behavior?

    <p>Profit-seeking creates wealth, while rent-seeking destroys wealth</p> Signup and view all the answers

    What is the term for the manipulation of specifications and bidding documents to favor a particular supplier?

    <p>Procurement manipulation</p> Signup and view all the answers

    What is the ultimate result of unchecked rent-seeking behavior?

    <p>Scandal and corruption</p> Signup and view all the answers

    A conflict of interest arises when an agent acts solely in the best interest of the principal.

    <p>False</p> Signup and view all the answers

    Rent-seeking behavior is a characteristic of a healthy and functional institution.

    <p>False</p> Signup and view all the answers

    A principal-agent relationship is based on a mutual understanding of trust and good faith.

    <p>True</p> Signup and view all the answers

    Conflict of interest is a violation of fiduciary duty.

    <p>True</p> Signup and view all the answers

    The Human Development Index (HDI) measures only economic growth.

    <p>False</p> Signup and view all the answers

    Being 'stuck in a compliance mentality' means prioritizing ethical decision-making over mere compliance with rules.

    <p>False</p> Signup and view all the answers

    Conflict of interest is a major contributor to corruption.

    <p>True</p> Signup and view all the answers

    Rent-seeking behavior is a form of profit-seeking behavior.

    <p>False</p> Signup and view all the answers

    Rent-seeking behavior involves the creation of wealth.

    <p>False</p> Signup and view all the answers

    All rent-seeking behavior is wrong.

    <p>False</p> Signup and view all the answers

    Regulatory capture is an example of rent-seeking behavior.

    <p>True</p> Signup and view all the answers

    Influence-peddling is a form of corruption.

    <p>True</p> Signup and view all the answers

    Conflict of interest arises when a public official has a personal stake in a project.

    <p>True</p> Signup and view all the answers

    Rent-seeking behavior is a form of profit-seeking behavior.

    <p>False</p> Signup and view all the answers

    Bribery is a form of rent-seeking behavior.

    <p>True</p> Signup and view all the answers

    Manipulating specifications and bidding documents to favor a particular supplier is a form of rent-seeking behavior.

    <p>True</p> Signup and view all the answers

    The Law of Agency arises because of the Principal-Agent relationship, where the principal has a duty to act for and in behalf of the agent.

    <p>False</p> Signup and view all the answers

    A conflict of interest arises when the agent acts in a way that harms or could potentially harm the principal.

    <p>True</p> Signup and view all the answers

    Rent-seeking behavior is primarily motivated by a desire to provide public goods.

    <p>False</p> Signup and view all the answers

    Capture is a form of accountability failure that is solely caused by corruption.

    <p>False</p> Signup and view all the answers

    Bias-related accountability failures occur when the wealthy remain disadvantaged.

    <p>False</p> Signup and view all the answers

    The primary goal of rent-seeking behavior is to create public value.

    <p>False</p> Signup and view all the answers

    Being 'stuck in a compliance mentality' means that people think often about the ethical implications of conflict of interest.

    <p>False</p> Signup and view all the answers

    The Human Development Index (HDI) is a measure of environmental quality.

    <p>False</p> Signup and view all the answers

    Study Notes

    Corruption Perception Index (CPI)

    • The Philippines has moved up a spot in the corruption index, but the score remains low.

    Rent-Seeking Behavior

    • Defined by Adam Smith as "economic rent" which is not a lease payment.
    • Three classes of income: income, wage, and rent.
    • Profit-seeking behavior occurs in the private sector, where reciprocal benefit is paid and wealth is created.
    • Rent-seeking behavior, on the other hand, occurs in the public sector, where institutions and transactions are manipulated to benefit a narrow sector, harming the public good.
    • Not all rent-seeking behavior is wrong.

    Examples of Rent-Seeking Behavior

    • No improvements or benefits to anyone.
    • Making money from something that used to be free.
    • Regulatory capture and exploiting discretion.
    • Influencing legislation for private benefit.
    • Bribing government officials for exceptional treatment.
    • Influence-peddling to dispense special favors.
    • Manipulating specifications and bidding documents to ensure a sole supplier.

    Public Good is Harmed

    • Public services like national security, education, and healthcare are affected.
    • Public works like roads and canals are also impacted.

    Ethics Praxis

    • Conflict of interest occurs when there is a violation of agency, where the agent acts in a way that harms or could potentially harm the principal.
    • Principal-agent relationship is based on fiduciary duty, where the agent has a responsibility to act in good faith and with loyalty towards the principal.

    Areas for Conflict of Interest

    • Dealings with suppliers, contractors, business partners, consultants, and customers.
    • Directorships, executive positions, and employment in other companies or organizations.
    • Use of company property, services, and resources.

    Five Kinds of Conflict of Interest

    • Not specified in the text.

    Human Development Index (HDI)

    • Released annually, the HDI measures a country's health, wealth, and education.
    • A higher index indicates a healthier, wealthier, and more educated population.
    • HDI is also influenced by environmental quality, physical security, and freedom from abuse.

    Institutional Failure

    • Caused by capture and bias, which lead to corruption and accountability failures.
    • Capture refers to corruption and undue influence, while bias-related accountability failures occur when the poor remain disadvantaged due to built-in impediments.

    Quizzes

    • Conflict of Interest:
      • The Law of Agency arises because of the Principal-Agent relationship.
      • Conflict of interest arises when the agent acts in a way that harms or could potentially harm the principal.
      • Being "stuck in a compliance mentality" means people think only about the policies and codes, rather than considering the ethical implications of conflict of interest.

    Corruption Perception Index (CPI)

    • The Philippines has moved up a spot in the corruption index, but the score remains low.

    Rent-Seeking Behavior

    • Defined by Adam Smith as "economic rent" which is not a lease payment.
    • Three classes of income: income, wage, and rent.
    • Profit-seeking behavior occurs in the private sector, where reciprocal benefit is paid and wealth is created.
    • Rent-seeking behavior, on the other hand, occurs in the public sector, where institutions and transactions are manipulated to benefit a narrow sector, harming the public good.
    • Not all rent-seeking behavior is wrong.

    Examples of Rent-Seeking Behavior

    • No improvements or benefits to anyone.
    • Making money from something that used to be free.
    • Regulatory capture and exploiting discretion.
    • Influencing legislation for private benefit.
    • Bribing government officials for exceptional treatment.
    • Influence-peddling to dispense special favors.
    • Manipulating specifications and bidding documents to ensure a sole supplier.

    Public Good is Harmed

    • Public services like national security, education, and healthcare are affected.
    • Public works like roads and canals are also impacted.

    Ethics Praxis

    • Conflict of interest occurs when there is a violation of agency, where the agent acts in a way that harms or could potentially harm the principal.
    • Principal-agent relationship is based on fiduciary duty, where the agent has a responsibility to act in good faith and with loyalty towards the principal.

    Areas for Conflict of Interest

    • Dealings with suppliers, contractors, business partners, consultants, and customers.
    • Directorships, executive positions, and employment in other companies or organizations.
    • Use of company property, services, and resources.

    Five Kinds of Conflict of Interest

    • Not specified in the text.

    Human Development Index (HDI)

    • Released annually, the HDI measures a country's health, wealth, and education.
    • A higher index indicates a healthier, wealthier, and more educated population.
    • HDI is also influenced by environmental quality, physical security, and freedom from abuse.

    Institutional Failure

    • Caused by capture and bias, which lead to corruption and accountability failures.
    • Capture refers to corruption and undue influence, while bias-related accountability failures occur when the poor remain disadvantaged due to built-in impediments.

    Quizzes

    • Conflict of Interest:
      • The Law of Agency arises because of the Principal-Agent relationship.
      • Conflict of interest arises when the agent acts in a way that harms or could potentially harm the principal.
      • Being "stuck in a compliance mentality" means people think only about the policies and codes, rather than considering the ethical implications of conflict of interest.

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    Description

    This quiz covers the concept of rent-seeking behavior, profit-seeking, and their differences in the context of economics. It also touches on the corruption perception index and its relevance to economic development.

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