Economic Institutions
1. ECONOMIC INSTITUTIONS- Institutions are basically durable systems of established and embedded social rules that create a structure for social interactions (Hodgson, 2001). Economic Institutions are the formal and informal rules that organize the economic flow and activity of society (Kelly, 2012).
2. Economic Institutions are tasked to answer the following questions: I.I. What goods and services should be produced?
I.II. How should these goods and services be produced?
I.III. For whom should the goods and services be produced?
3. RECIPROCITY- This is a form of gift exchange between two parties wherein return is expected after the product or gift-giving (Parry, 1986).
4. TRANSFER- Also known as: “government transfer” or “transfer payment”. Transfers are payments that are made without any good or service being received in return (Bishop, 2012).
5. REDISTRIBUTION- This is the process of transferring income and wealth-be it in the form of money, physical property, and the like from one individual to other individuals.
6. MARKET TRANSACTION- is basically the system of exchange in a market. It is goods and service are traded and bartered among individuals within their market and society.
>PURCHASES- this type of transaction is the most common among all kinds of transactions.
> LOANS- is a sum of money that a person may borrow.
>BANK ACCOUNTS- one more way of the transaction is through your back.
7. MARKET- The market is basically seen a system of private ownership and enterprises that based on their own private and self-interest.
8. STATE- State is viewed as the governing body of the society- it is the political world (the “polis”) of the society.
3. >Institutions are basically durable
systems of established and embedded
social rules that create a structure for
social interactions (hodgson, 2001)
> Economic Institutions are the
formal and informal rule that organize the
economic flow and activity of society
(Kelly, 2012)
9. • Also known as: “government transfer” or
“transfer payment”
• Transfers are payments that are made
without any good or service being
received in return (Bishop, 2012)
10. • Is the process of transferring income
and wealth-be it in the form of money,
physical property, and the like form one
individual to other individuals.
12. Market transaction is basically the
system of exchange in a market. It is
goods and service are traded and
bartered among individuals within their
market and society
