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Questions and Answers
What do institutions provide according to institutional theory?
What do institutions provide according to institutional theory?
What is the main characteristic of informal institutions?
What is the main characteristic of informal institutions?
What type of institution establishes standards and propagates principles?
What type of institution establishes standards and propagates principles?
What is the primary purpose of new institutional theory?
What is the primary purpose of new institutional theory?
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What is an example of an informal cognitive institution?
What is an example of an informal cognitive institution?
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What is the key difference between formal and informal institutions?
What is the key difference between formal and informal institutions?
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What was the main purpose of the 1944 conference?
What was the main purpose of the 1944 conference?
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What is the primary function of the World Bank?
What is the primary function of the World Bank?
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What is the International Monetary Fund (IMF) responsible for?
What is the International Monetary Fund (IMF) responsible for?
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What is the purpose of special drawing rights (SDRs) established by the IMF?
What is the purpose of special drawing rights (SDRs) established by the IMF?
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What is the main criticism of the IMF's approach to exchange rates?
What is the main criticism of the IMF's approach to exchange rates?
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What is one of the criticisms of the IMF's policies towards developing countries?
What is one of the criticisms of the IMF's policies towards developing countries?
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What is a current issue facing the IMF?
What is a current issue facing the IMF?
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What is a criticism of the IMF's governance structure?
What is a criticism of the IMF's governance structure?
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What is the primary basis of compliance in a regulative institution?
What is the primary basis of compliance in a regulative institution?
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According to the new institutional theory, what is the primary logic of normative institutions?
According to the new institutional theory, what is the primary logic of normative institutions?
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What is the primary indicator of institutionalization in cognitive institutions?
What is the primary indicator of institutionalization in cognitive institutions?
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What is the primary source of legitimacy in regulative institutions?
What is the primary source of legitimacy in regulative institutions?
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What is the primary way in which informal institutions influence firm behavior?
What is the primary way in which informal institutions influence firm behavior?
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What is the primary characteristic of normative institutions?
What is the primary characteristic of normative institutions?
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What is the primary way in which institutions influence managerial behavior?
What is the primary way in which institutions influence managerial behavior?
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What is the primary characteristic of cognitive institutions?
What is the primary characteristic of cognitive institutions?
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Which OECD member country is not a part of the European Union?
Which OECD member country is not a part of the European Union?
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What percentage of world trade is represented by the World Trade Organization's members?
What percentage of world trade is represented by the World Trade Organization's members?
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Which of the following is NOT a principle of the World Trade Organization?
Which of the following is NOT a principle of the World Trade Organization?
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What is the primary goal of the Doha Development Agenda?
What is the primary goal of the Doha Development Agenda?
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Which OECD member country is also a member of the G7?
Which OECD member country is also a member of the G7?
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How many members does the World Trade Organization have?
How many members does the World Trade Organization have?
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What is the title of the webpage that lists the OECD member countries?
What is the title of the webpage that lists the OECD member countries?
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What is the name of the international organization that establishes and helps implement rules of trade between nations?
What is the name of the international organization that establishes and helps implement rules of trade between nations?
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What is the primary goal of Association of Southeast Asian Nations (ASEAN)?
What is the primary goal of Association of Southeast Asian Nations (ASEAN)?
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What is the European Parliament's primary role?
What is the European Parliament's primary role?
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What is the main argument against international institutions, such as the United Nations?
What is the main argument against international institutions, such as the United Nations?
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What is the primary objective of the European Union's Economic and Monetary Union (EMU)?
What is the primary objective of the European Union's Economic and Monetary Union (EMU)?
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What is the primary role of the Council of the European Union?
What is the primary role of the Council of the European Union?
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What is the main counterargument to the criticism that international institutions weaken national sovereignty?
What is the main counterargument to the criticism that international institutions weaken national sovereignty?
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What is the primary purpose of the European Commission?
What is the primary purpose of the European Commission?
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What is the primary goal of bilateral trade agreements, such as NAFTA and Mercosur?
What is the primary goal of bilateral trade agreements, such as NAFTA and Mercosur?
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Study Notes
Institutional Theory
- Insinsufficient coordination among parties, leading to social and economic inefficiencies.way to resolve conflicts before These inefficient coordination mechanisms can lead to inconsistent decision-making, disrupting the overall functioning of an organization or society, and ultimately slowing down economic growth..
- New Institutional Theory views institutions as social constructs that l
- imit behavior and provide rules for business. This perspective suggests that institutions can shape the way individuals interact with each other, influencing decisions and actions in both formal and informal settings.
- Formal Institutions: These institutions exist in written form, such as laws, regulations, and contracts, and are enforced by external authorities. They use the threat of force and sanctions to prompt compliance.
- Institutions are collections of norms that structure the relations of individuals to one another.
Types of Institutions
- Formal Institutions: influence behavior through laws and regulations, use threat of force and sanctions.
- Informal Institutions: influence behavior through norms, values, customs, and ideologies, no penalty for noncompliance.
- Informal Normative Institutions: organizations that establish standards and propagate principles (e.g. UN, NGOs).
- Informal Cognitive Institutions: collections of shared ideas that define reality by means of conceptual frameworks or schema (e.g. guanxi).
Characteristics of Institutions
- Institution Type: Formal, Informal, Informal Normative, Informal Cognitive
- Social Agreement: Regulative, Normative, Cognitive
- Compliance: Expedience, Social Obligation, Predisposition
- Institutionalization: Coercion, Norms, Imitation
- Logic: These three logics, namely Means to an End, Appropriateness, and Conformance, serve as guiding principles for institutional behavior. Means to an End refers to the pursuit of specific goals or outcomes, while Appropriateness emphasizes the relevance and adequacy of actions aligning with the institution's objectives. Conformance, on the other hand, deals with the conformity of actions to established rules and standards.
- Legitimacy: Legal, Moral Governance, Cultural Support
- Indicators/Evidence: Rules, Laws, Sanctions, Certification, Accreditation, Prevalence, Similarity
International Monetary Institutions
- International Monetary Fund (IMF): fosters global monetary cooperation, financial stability, international trade, high employment, sustainable economic growth, and reduction of poverty.
- IMF provides Special Drawing Rights (SDRs), an international reserve asset established by the IMF.
- IMF and Exchange Rates: Fixed exchange rates with par value based on gold and the U.S. dollar.
- Criticisms of the IMF: forcing free-market policies obn poor countries, increasing poverty and political chaos.
International Monetary Institutions (Cont.)
- Current IMF issues: aid coupled with mandatory advice to reduce budget deficits and inflation, leading to increased poverty.
- IMF largely controlled by developed Western countries.
- IMF strengthens economies of dictatorial regimes, making them markets for multinationals.
- IMF attempts to address these issues.
World Development and Trade Organizations
- World Trade Organization (WTO): establishes and helps implement rules of trade between nations, with 164 members representing 98% of all world trade.
- WTO Principles: trade without discrimination, freer trade through negotiation, predictability through binding and transparency, promoting fair competition, encouraging development and economic reform, and protecting the environment.
Economic Integration Agreements
- Association of Southeast Asian Nations (ASEAN): agreement among Southeast Asian nations that began as a security agreement, grew to a free trade agreement, and is continuing toward a free trade area, known as AFTA.
- European Union (EU): a body of 27 European countries that resulted from the Maastricht Treaty, with three areas of integration: economic, foreign policy, and domestic affairs.
Economic Integration Agreements (Cont.)
- European Union: Economic and Monetary Union (EMU) established the euro, with the European Parliament representing the people of Europe, the Council of the European Union representing the member states, and the European Commission administering daily operations.
- ASEAN and EU: examples of economic integration agreements.
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Description
Learn about Institutional Theory, its role in resolving conflicts, and the different types of institutions, including formal and informal institutions.
