Scribd
Upload
19 views15 pages

10 - Lesson 10 Economic Institution

Economic institutions were formed by societies to organize the production, distribution, exchange, and consumption of goods and services. An economic institution is defined as the set of social patterns through which a society provides material goods and services. Some key international economic institutions include the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank, which were established to facilitate international trade and economic development.

Uploaded by

Kate Baril
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
19 views15 pages

10 - Lesson 10 Economic Institution

Economic institutions were formed by societies to organize the production, distribution, exchange, and consumption of goods and services. An economic institution is defined as the set of social patterns through which a society provides material goods and services. Some key international economic institutions include the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank, which were established to facilitate international trade and economic development.

Uploaded by

Kate Baril
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 15

Economic

Institution

November 10, 2020


Economic Institution
Society requires institutions that will take charge of distribution and
consumption of goods and services. For this reason, economic institutions were
formed, for the purpose of production, distribution, exchange and consumption of
commodities.
Economic institution is the configuration of patterned social behaviors through
which material goods and services are provided for the society. (Palispis, 2003)

11/30/2020 2
Click icon to add picture

International
Economic
Institutions
Click icon to add picture

01
The General Agreement on Tariffs and
Trade (GATT)/
World Trade Organization (WTO)

The World Trade Organization (WTO) formerly


(GATT) was formed as global international organization
dealing with the rules of trade between nations. With
the main objective to help global organizations to
conduct their business, WTO aids in establishing
Click icon to add picture Click icon to add picture
international cooperation, peace and prosperity.
The organization advocates good governance,
economic growth, and reduction of trade disputes and
promotion of peace with nations.

11/30/2020 4
02
The International Monetary Fund (IMF)

Consisting of 190 countries since its establishment in 1945, IMF


was provided with the aim to exert control on international exchange
rates as well as act as a reserve base for bailing out BOP deficit countries.
The central focus of IMF is on the international monetary and
financial system. Its purpose is to work as short-term credit institution,
facilitate international trade and foster sustainable economic growth.
03
The World Bank
It was created primarily to offer economic assistance to
the war-ravaged economies of Europe and Asia and to the
poor countries of the world.
It is an international, intergovernmental institution
which provide for long-term loans on easy terms for specific
development projects. The capital stock is entirely owned by
181 strong member governments.

11/30/2020 6
The Three Principles of
Exchange/Distribution
Kottak (2009)

11/30/2020 7
01 The Market Principle

“Market exchange refers to the organizational process or


purchase and sale at money price” (Dalton 1967) In the world of
capitalist economy, the market principle dominates. With market
exchange, the key motivating principle is to maximize profit and value
as determined by law of supply and demand.
02 Redistribution

It refers to a system of economic exchange involving the centralized


collection of goods from members of a group followed by the redistribution of
those goods among those members. It operates with a movement of goods and
services from the local level to a center through a hierarchy of officials.

11/30/2020 9
03 Reciprocity

Reciprocity is exchange between social equals, who


are normally related by kinship, marriage or another close
personal tie. Continuing sequence of giving, receiving, and
repaying gifts is the end-result of reciprocity.
There are three distinct types of reciprocity in
human societies as follows:
Generalized reciprocity is Balanced reciprocity Negative reciprocity is what
economists call barter and it
the purest form of With balanced reciprocity, occurs when there is an attempt
reciprocity without the the giver expects to get someone to exchange
expectation of an something in return. something he or she may not
want to give up or when there is
immediate return. It is an There is an explicit an attempt to get a more valued
exchange between closely expectation of immediate thing than you give in return.
related individuals and is and fair return at some This may involve trickery,
coercion, or hard bargaining. It
characterized by personal undefined future date. can take place among strangers
relationships. Simple barter or where there is a need to be
  supermarket purchases repaid immediately with some
other goods or labor of the
involve this same value.
understanding.

11/30/2020 11
Market
Transactions
A market is a medium that allows buyer
and seller to interact in order to facilitate an
exchange of goods and services. It may
either be a physical or virtual market. A
market is the focal center for distribution of
goods and services within a society.
Banks
It is a financial institution licensed to receive deposits and make loans. It was formed to
provide necessary financial services such as wealth management, currency exchange and safe
deposit boxes. These are some types of bank we are familiar with:
 
- Commercial banks
- Investment banks
- Central banks
- Online-only banks

11/30/2020 13
Corporations
It is a legal entity that is separate and distinct from its owners, enjoying
most of the rights and responsibilities that an individual possess such as the right
to enter into a contract, loan and borrow money, sue and be sued, hire employees,
own assets and pay taxes. (Bula, 2016) Samples of corporations are Coca-Cola,
Toyota Motor Corporation and Google.

11/30/2020 14
Cooperatives
It is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined
together to achieve their social, economic and cultural needs and aspirations by making equitable contributions to the capital
required, patronizing their products and services and accepting a fair share of the risks and benefits. The members of the
cooperative own manage and control the business enterprises with accepted domestic principles. It may be classified as follows:
 
- Credit cooperative
- Consumer cooperative
- Producer cooperative
- Marketing cooperative
- Service cooperative
- Multi-purpose cooperative

11/30/2020 15

You might also like