Economic Institutions PDF

If you have been given something, is it expected for you to return the favor? Why or why not? Understanding Culture, Society, and Politics Economic Institutions Economic institutions are those that are involved in the production and distribution of the goods and services that members of a soci...

If you have been given something, is it expected for you to return the favor? Why or why not? Understanding Culture, Society, and Politics Economic Institutions Economic institutions are those that are involved in the production and distribution of the goods and services that members of a society need. Many instances, gift-giving does not stop there. You may find yourself giving gifts to your closest friends or loved ones. At the same time, you also get to receive gifts from them. Have you ever reflected on why you give gifts in the first place? Could these gifts influence you and your friends’ social relationship? Reciprocity refers to the voluntary giving or taking of objects without the use of money in the hopes that, in the future, they could be given back. Reciprocity could take the form of barter, hospitality, gift- giving, and sharing. You might not realize it, but people engage in reciprocity most of the time. Simple activities like borrowing and returning a pen could be categorized as reciprocity. Reciprocity The aim of engaging in reciprocity is to build and strengthen social relationships as well as acquire more means or favors. Reciprocity A good example of reciprocity is the Filipino culture of utang na loob. This is an act of kindness or favor that is expected to be given in return. For instance, Filipinos who seek help from their acquaintances in accomplishing any specific task, such as looking for a job or securing a personal loan for the family, would see themselves indebted to their friends. When the time comes that the friend asks for a favor, it is common practice to help him out in return. In our country, utang na loob is not mandated by any law or legal document. It is, however, part of our unique culture and identity as Filipinos. Forms of Reciprocity (Sahlins’ typology) according to Anthropologist Marshall Sahlins; 1. Generalized Reciprocity 2. Balanced Reciprocity 3. Negative Reciprocity Generalized Reciprocity The main feature of generalized reciprocity is the exchange of goods and services without a definite time frame of when the favor should be returned. In this form of reciprocity, individuals giving out the favors do not expect to receive anything back. Such activity is commonly done among small groups or societies. Generalized Reciprocity A good example of this is your relationship with your family and closest friends. When you are given food by your parents, for instance, do they expect you to buy them food in return? Parents usually do not ask their children to repay them for what they are given. At the same time, children are not obliged or pressured to return the favor as well. The same situation goes for close friends. While they may expect more, close friends who do favors for one another usually do it out of love, concern, or camaraderie, and not for any economic gain Balanced Reciprocity In balanced reciprocity, exchange occurs between groups or individuals with the donor expecting to receive something of equal or similar value. Expecting immediate return from any given favor. The value of the commodities is expected to be equal. Example: Selling goods and services in the market. Balanced Reciprocity There is pressure to give back the favors at a specific point in time. Unlike generalized reciprocity, balanced reciprocity demands timely reciprocation that when favors are not received by the donor, they could refuse to continue giving out the favors. Among social groups, the effects of non-compliance could result in gossiping, refusal to commit to any other transaction, forced reciprocation, or strained relationships. Negative Reciprocity In negative reciprocity, groups try to maximize their gains while giving as little as possible. This form is usually motivated by the desire to acquire a large number of goods using minimal resources. Example: A merchant selling fake commodities at prices of the original and genuine items. Transfer Also called “government transfer” or “transfer payments,” Transfer is a process of redistributing money into new or existing programs such as pensions, student grants, or health services. Among state societies, transfers are required payments that could take form through the collection of taxes, social services, pensions, housing, and healthcare. Transfers and the Government The government plays a crucial role in ensuring that transfer payments are collected successfully from participating citizens and institutions. Among the different allocations of transfer payments, governments usually give priority to retirement and disability benefits, medical benefits, unemployment insurance, and education and training.  Allocation of Transfer Definition Example Retirement Benefits Payments that are made to Qualified senior citizens in citizens who qualify for the Philippines are given retirement or disability monthly pensions. benefits upon meeting government- mandated requirements. Countries have different qualifications for these benefit programs. Medical Benefits Government payments made Medical assistance could be through third-party provided to individuals institutions. This type of coming from low-income transfer payment could take families. At the Philippine form as public assistance General Hospital, for medical care or military example, medical services medical care. are available at a minimal cost (or sometimes at no cost) to the less fortunate.  Allocation of Transfer Definition Example Education and Training The primary goal of this State universities and transfer payment is to colleges in the Philippines provide assistance to all strive to make education individuals so that they affordable by offering could afford schooling. subsidized or reduced Educational services offered tuition and fees to potential by the government usually enrollees range from fully-funded academic scholarships to technical training programs. Redistribution The process by which products produced out from the community is sent to a place where they are stored, counted, and later distributed back to the people. > For instance, taxes are collected from individuals based on their income. The money collected is distributed to other members of society through different government programs. Market A system of private ownership and enterprise that acts based on their own private and self-interest. (Schmalansee, 2013). Market Transactions: Purchases Buyer and seller interact with one another to exchange goods for an amount of money. (Arcinas & Mactal, 2016). https://thumbs.dreamstime.com/b/consumers-buy-fruit-vendor-market-cainta-rizal-philippines-asia-december- photo-36342014.jpg Market Transactions: Loans Loans are money advanced with an interest charge that must be paid and returned at some point in the future. (Peavler, n.d)