USJP MGT

2. • What is Economics?
• What is election?
• Relationship between elections and economy
• How do elections affect to the economy?
• Where does money go in an election?
• World contest & Sri Lankan contest of elections
• Weaknesses of Sri Lankan elections
• How to overcome the weaknesses?
CONTENT OF THE PRESENTATION

3. ECONOMICS IS THE STUDY OF HOW PEOPLE CHOOSE TO USE
THEIR SCARE RESOURCES IN AN ATTEMPT TO SATISFY THEIR
UNLIMITED WANTS.
OR
THE WEALTH AND RESOURCES OF A COUNTRY OR REGION,
ESPECIALLY IN TERMS OF THE PRODUCTION AND
CONSUMPTION OF GOODS AND SERVICES IS ALSO CALLED
“ECONOMY”.
What is Economics?

4.  An election is a formal decision making process by which a population
chooses an individual to hold public offices. Elections have been the usual
mechanism by which modern representative democracy has operated since
the 17th century Elections may fill offices in the legislature , sometimes in
the executive and judiciary, and for regional and local government..
 The act of a party casting votes to elect an individual for some type of
position. Elections may involve a public or private vote depending on the
position. Most positions in the local, state, and federal governments are
voting on in some type of election.
WHAT IS ELECTION?

5. There are various ways in which elections affect the economy
such as:
 Formations of economic policy.
 International Trade
 Gross Domestic Product per capital income
 Income Inequality
 War and Disturbances
 Scams and Corruption
RELATIONSHIP BETWEEN ELECTIONS AND
ECONOMY

6. ♦ Industrial Production
Political risk insurance cannot be a panacea for every conceivable
political risk that can confront an international trader or investor. But
in a world filled with political change, obtaining political risk insurance
can make the difference between operating a profitable business and
making a costly mistake.
♦ Inflation
Most economists acknowledge that differences in monetary and
fiscal policies among countries are the main reasons behind the
inflation variability they sustain. However this explanation leads
to the question, ‘Why countries differ in conducting Fiscal and
Monetary policies’. In fact structural features of a specific
economy determine its government ability to collect taxes.
HOW DO ELECTIONS AFFECT TO THE
ECONOMY?

7. ♦ Businesses
The political factors affecting business are often given a lot of
importance. Several aspects of government policy can affect
business. All firms must follow the law. Managers must find how
upcoming legislations can affect their activities.
♦ Economic Policies
Political instability is regarded as a serious harmful to economic
performance.. Political instability is likely to shorten
policymakers’ horizons leading to sub-optimal short term
macroeconomic policies. It may also lead to a more frequent
switch of policies, creating volatility and thus, negatively affecting
macroeconomic performance.
HOW DO ELECTIONS AFFECT TO THE
ECONOMY? CONT.

8. ♦ Economic Growth
Growth is significantly lower in countries and time periods with a high
propensity of government collapse. Some economists also have found
that higher degrees of political instability lead to lower economic
growth.
♦ Employment
Self-serving political actions can negatively influence social groupings,
cooperation, information sharing, and many other organizational
functions. It is the use of power and social networking within an
organization to achieve changes that benefit the organization or
individuals within it. Some of the personal advantages may include
access to tangible assets, or intangible benefits such as status or pseudo-
authority that influences the behavior of others.
HOW DO ELECTIONS AFFECT TO
THE ECONOMY? CONT.

9. ♦ Investment
Often, investors do not receive cash or other monetary payments at the time
of the transfer of these assets, but they’re involved in some sort of extended
financing agreement. Not only potential investors, but also the policymakers
in countries that are devising policies to attract investors need to be aware of
the political relationships that could jeopardize these deals.
♦ Economical Rates
Investment decisions’ sensitivity to tax rates is well known among academics
and policy makers. As a consequence countries are lowering their tax rates in
order to retain and attract investments. Political scientists have shown an
interest in tax rate determinants and naturally focused on political variables
but early studies tended to consider limited determinants, such as party color
and election .
HOW DO ELECTIONS AFFECT TO THE
ECONOMY? CONT.

10. Election costs can be categorized as either transaction costs or constituency
costs. Transaction costs arise from decentralization of the legislative process
while constituency costs are the result of ideological opposition to policy
changes that benefit capital. Ex:-
 Posters and Banners
 Wooing voters: Gifts like food, clothes, trips and individual benefits.
 Rent a crowd
 Commuting cost: Provision of Petrol and Diesel cost for campaigners.
 Temporary offices
 Full time party workers: Each candidate has some full time party workers
 Transport cost: To ferry jeep/ taxi costs
WHERE DOES MONEY GO IN AN
ELECTION?

11.  Usually in European countries they use an electronic method
for the election and in Sri Lanka we use a paper based method.
 In Sri Lanka, the number of crimes are really high during the
election period and in European countries the election is quite
calm.
 European countries don’t spend much more money for
promotion purposes but in Sri Lanka candidates even spend
government money for their victory.
WORLD CONTEST & SRI LANKAN CONTEST
OF ELECTIONS

12.  Paper cost is too high.
 Candidates spend government money for their promotions
such as advertisements, banners, posters.
 Large number of conflicts, crimes occur in the election period.
 Frauds can be occurred when counting votes as the manual
system is used.
 There’s an unnecessary competition among candidates.
 People have to afford the expenses of promotions.
WEAKNESSES OF SRI LANKAN
ELECTIONS

13. o Government should find out some modern means of elections
like digital methods.
o Rules and regulations should be implemented properly.
o People should vote for the correct candidate for the
parliament.
HOW TO OVERCOME THE WEAKNESSES?