The document discusses how to compare different economies. It outlines six key criteria for classifying economies: allocation mechanism, form of ownership, role of planning, types of incentives, income redistribution and social safety nets, and role of politics and ideology. Traditional, market, and command economies are discussed as examples of different allocation mechanisms. The document also evaluates nine criteria for assessing the relative performance of economic systems, such as levels of output, growth rates, and individual freedom. Overall, the key factors in comparing economies are the allocation system and ownership system, with a focus on comparing systems like socialism, capitalism and communism.

1. COMMITMENT TO EXCELLENCE
Comparative Economics In A Transforming World
Economy
Prof: Seng Kimty
Presentation
How Do We Compare Economies?
Group 1:
Prak Chansidavuth
Meach Chanmakara 1

2. I. Introduction
II. Criteria for classifying economies
1. How do we classify economies?
III.Income redistribution and social safety nets
IV.Role of politic and Ideology
V. Criteria for evaluating Economic
VI. Conclusion
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3. Economy System is the organization and methods
used to determine what goods and services are
produced, how they are produced, and for whom
they are produced.
Comparative economic systems is the subfield of
economics dealing with the comparative study of
different systems of economic organization, such
as capitalism, socialism, feudalism and the mixed
economy.
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4.  In thinking about nature of economic systems with the intention to compare
them, we need to think fundamentally about what we mean by an economy.
 So economy is made up of group of people who are located within a political
entity that has particular geographical characteristics and who are producing
and consuming goods and services.
 There are 6 points that combine and interact with each other in difference
ways for classify economies.
Allocation
mechanism
Form of
ownership
Role of
planning
Types of
Incentives
Income
Redistributio
n and Social
Safety Nets
Role of Politics and Ideology 4

5.  allocation mechanisms include centralized mechanisms as in communism and
corporations, or market based mechanisms as in capitalism.
 There are three basic kinds of allocation mechanism.
Traditional Economy Market Economy Command Economy
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6.  Karl Marx and Friedrich Engles in their 1848 Communist Manifesto argue that
the key to understanding economy is to know who owns the means of production.
Ownership determines the distinction between capitalism and socialism, defined
in strictly economic terms.
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7.  Capitalism and Socialism both have plan for their economies.
 Market capitalist economies there is planning by specific government agencies
involved in infrastructure investment such as transportation networks, function
that in most economies seem to be in public sector. State development planning or
national planning refers to macroeconomic policies and financial planning
conducted by governments to stabilize the market or promote economic growth in
market-based economies.
 Economic planning, or more precisely, the planning of economic development is an
essential feature of socialism. An economic system in which government directly
manages supply and demand for goods and services by controlling production,
prices, and distribution in accordance with a long-term design and schedule of
objectives.
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8.  The term INCENTIVES mean, something which encourages a person to do
something. Or the “extra financial reward/motivation”.
 An incentive is something that motivates an individual to perform an action.
Economies vary according to the inventive that motivate people to work and produce.
The most common incentive are material incentive and moral incentive.
 Material incentive is under market capitalism but also in socialism and Islam but it’s
not work well as capitalism.
 Moral incentive is trying to motivate worker by achieve higher collective goal under
socialism and Islam.
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9.  Economic based on the extend to which and the methods by which government
intervene to redistribute income.
 Japanese government does less in redistributing than other capitalist
government.
 Friendrich A. Hayek, occasionally argued that government should act to prevent
individual from falling some minimum standard of living.
 John Rawls’s view that the justness of a society is to be judged by how well of its
poorest individual is the maximin criterion.
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10.  Karl Marx enunciated the ideal goal of pure communism as being “from each
according to his ability, to each according to his need”, due to different need of
people, Marx contrasted this goal with that of socialism which would be “ from
each according to his ability, to each according to his work”
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11. The relationship between politics and economic is subject
to deep debate.
The heart of the linkage is ideology, in which certain
political and economic systems are linked in distinct
package and given labels such as communism and liberal
democracy.
For example, social market, free market
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12.  Morris Bornstein present 9 criteria by which the relative performance of
economic system can be compared:
 First is the level of output. This figure should be corrected for population
and the price level, giving us real per capita output as the measure that
equals real per capita income.
 Second is the growth rate of output. This figure must be corrected for
population growth.
 Third is the composition of output. The most notable variable of
composition are the breakdown between consumption and investment,
the share of military output, and public versus private goods.
 Fourth is static efficiency. Formally this means Pareto optimality, the
idea that no one in society can be made better off without making
someone else worse off
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13.  Fifth is intertemporal of dynamic efficiency, which involves the
allocation of resources over time to maximize long-run sustainable
growth.
 Sixth is macroeconomic stability, the lack of large oscillation of
output, employment, or the overall price level.
 Seventh is economic security of the individual in terms of income,
employment and related matters such as health care.
 Eighth is the degree of equity of the income and wealth
distributions.
 Ninth is the degree of freedom available to the individual in term of
work, consumption, property, investment and more broadly in the
civil and political realms. 13

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16.  Fukuyama argues that economy is converging on American-style market
capitalism. But it is a very complex process in a troubled and transforming
world economy. In comparing economic, central issues are the allocation
system-traditional, market, or command-and the ownership system-
capitalist or socialist.
 Comparative Economic System is about comparative system of Socialism,
Capitalism, Communism.
 Capitalism is about privatization or private ownership of resources and
markets.
 Socialism is an economic system that government own everything or
government ownership of recourses and centralized decision making
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17.  https://en.wikipedia.org/wiki/Comparative_economic_systems
 https://en.wikipedia.org/wiki/Economic_planning
 https://en.wikipedia.org/wiki/Redistribution_of_income_and_wealth
 https://en.wikipedia.org/wiki/Social_safety_net
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