Mgmt Essay

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Bich Dang (QN3536) 10/7/2013 MGMT4670 WRITTEN RESPONSE #1 Political economy, property rights and corruption 1) A. What types of conditions in the political economy encourage economic growth? Pptchap3 * 2 types of conditions: Innovation and entrepreneurship are the engines of long-run economic growth * innovation includes new products, new processes, new organizations, new management practices, and new strategies * entrepreneurs commercialize innovative new products and processes * Innovation and entrepreneurship help increase economic activity by creating new markets and products that did not previously exist * Innovation in production and business processes result in more productive labor and capital further boosting economic growth rates B. What is the role of strong property rights in economic growth? (2 points) P.78 * Without strong property rights protection, business and individuals run the risk that the profits from their innovative efforts will be expropriated, either by criminal elements or by the state. The state can do excessive taxation or through illegal means. Inadequately enforced property rights reduce the incentives for innovation and entrepreneurial activity which are the engines of the economic growth- because the profits from such activity are stolen and hence reduce the rate of economic growths. 2) There are two types of violation of property rights: public actions and private actions. (2 points) P.56 A. What do private action violations involve? * Private action violations involve theft, piracy, blackmail and the like by private individuals or groups. B. What do public action violations involve? * Public action violations occur when public officials, such as politicians and government bureaucrats, extort income, resources, or the property itself from property

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