Institutional Economics Reflection

User Generated

Mp018

Economics

York University

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Assessment Description:

This assessment requires you to engage deeply with contemporary developments and debates within China's market economy, exploring their implications for professional practices and analyses in the field of institutional economics and International Business studies. In attachment file, two short foundational readings that reflect opposing viewpoints. Through critical engagement with these readings and your own additional research based on the Reading List, you will craft a critical reflection that interrogates the arguments, identifies gaps, and articulates your perspectives on institutional economics as it relates to the chosen topic.

The structure of critical reflection:

Introduction: briefly introduce the topic and outline the key points of discussion

Critical reflection: analysis of authors’ arguments and their contributions to the topic; areas of agreement or disagreement; evaluation of the articles’ limitations; any gaps or oversights compared to the foundational academic literature; critical reflection on the implications of these arguments; your thoughts on this matter; what makes you think/reflect in this way?

Conclusion: summarise your reflections and the insights gained from your critical analysis.

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Individual Assignment 1 Topic A You can choose either Topic A or Topic B. Each topic is linked to two short media articles that reflect differing viewpoints. Compare these two articles with each other and your own academic readings on institutional economics from the Canvas Reading List. Topic A relates to our class discussions on how different levels of government can support private enterprises. Examine the arguments of the two authors, identify differences and gaps and give your own opinion about the topic. In short, compare the two articles and evaluate them. The structure of your critical reflection: Introduction: briefly introduce the topic and outline the key points of discussion Critical reflection: analyse the authors’ arguments and their contributions to the topic; Where do they agree and disagree; what are their limitations, are there obvious gaps or oversights compared to the academic literature? Critically reflect on the implications of these arguments. What are your own thoughts on this matter and what makes you think this way? Conclusion: In a few sentences summarise your reflections and insights. Jul 21, 2023 05:18 AM Opinion: How Can Policymakers Boost Confidence in Private Enterprises? By Zhou Dongxu China’s Communist Party and government Wednesday issued a joint pledge to improve conditions for private businesses through a new set of measures. Good news has arrived for China's private sector, which has been stuck in an economic predicament. China’s Communist Party and government Wednesday issued a joint pledge to improve conditions for private businesses through a new set of measures, adding another key policy document laying the groundwork to support the private economy. The pledge came after a lower-than-expected GDP growth in the second quarter and record-high youth unemployment. Private businesses typically absorb a large portion of the young workforce. Private businesses have suffered various constraints and weakening confidence due to a combination of factors, including pressure from China’s economic transformation, the private sector’s structural adjustments, and challenges at home and abroad. However, amid the already weakening economic backdrop, some local governments have exercised arbitrary governance, implementing unconventional measures that undoubtedly intensified corporate anxiety and eroded the foundation of confidence built through reform and opening up. To boost the confidence of private enterprises, the most urgent task is to vigorously rectify unreasonable governance practices in various regions and allow businesses to grow freely in a stable and predictable business environment. The Wednesday document explicitly called for the perpetual removal of market access barriers, strengthening laws and regulations protecting market competition, and improving the framework of fair competition and the mechanisms for implementing policy. It also emphasizes treating all types of enterprises equally and fairly. These are precisely the practical measures that private enterprises eagerly desire policymakers to implement. The document also prohibited exercising local protectionism and using excessive administrative or law enforcement measures to disrupt business. It emphasized the need to improve the fairness and simplicity of supervision, eliminating selective law enforcement and burdensome regulatory requirements that deeply concern and frustrate businesses, especially private enterprises. This neglect of procedural justice and excessive enforcement reflects the expansion of power and weakness in the rule of law, leaving businesses feeling worried, afraid, and helpless. Despite the several high-level policy documents issued since 2005 to protect private enterprises and boost their confidence, overcoming the inertia of arbitrary governance at the local level is not easy. The challenges from various aspects make it difficult to fully dispel the anxieties of these enterprises with just a single document. To prevent arbitrary governance, there must be a clear boundary between the market and the government. The relationship between them is complex, but it doesn’t allow the government to extend its reach without limits or intervene in the market recklessly. The boundary should be governed by the rule of law, not the personal will of those in power. It is also important to be aware of growing formalism and excessive punishment under the bureaucratic system. There are recent cases showing that many regions and departments resort to falsification or harsh penalties to show accountability to their superiors, burdening ordinary and vulnerable market entities in the process. Restoring order and boosting confidence in the private sector is not an immediate process. Two important aspects to focus on are establishing regular communications between the government and private companies to enhance decision-making and expand channels to lodge complaints and safeguard operations so that businesses can assert their rights when necessary. Recently, Premier Li Qiang and various government officials have engaged in discussions with entrepreneurs to establish a way to stay in regular communication. This is an effective approach to address harsh law enforcement resulting from decisions lacking scientific basis and influenced by personal interests, which may be exploited by corrupt individuals for personal gains. Public participation is a key aspect of the decision-making process for a government based on the rule of law. Illogical or unreasonable decisions can be avoided if market entities have the opportunity to voice their reasonable demands and have them respected, thereby preventing serious credibility crises for local governments. Regular communication mechanisms aim to impose pre-emptive constraints while strengthening channels to lodge complaints and safeguard businesses provide recourse for private enterprises. The lack of checks on power is why private businesses hesitate to defend their rights and fear retaliation. A just safeguard mechanism is essential in a society based on the rule of law, ensuring accessible channels for airing grievances against officials, providing private enterprises with the confidence to safeguard their rights, and effectively constraining local governments. It is also crucial to create a positive social atmosphere for the continuous growth of the private economy. There have been numerous examples of private enterprises that faced defamation and various accusations but dared to speak up or defend themselves. The document strongly emphasized refuting and clarifying erroneous remarks and actions that undermine the private economy. Resolute actions, not just slogans, are needed to truly protect private enterprises and address their concerns. The importance of private enterprises in China cannot be underestimated. The recent pledges made by the central government show its commitment to protecting their rights, and we anticipate further concrete actions to boost their confidence. Opinion: How Can Policymakers Boost Confidence in Private Enterprises? - Caixin Global Oct 20, 2023 08:00 PM Opinion: How Zhejiang’s Private Economy Paved Way to Achieve ‘Common Prosperity’ By Liu Ting In June 2021, the central government designated Zhejiang as the first — and currently the only — High-Quality Development and Common Prosperity Demonstration Zone in China. Earning such a lofty title required substantial capital, confidence and achieving “common prosperity, which starts by what is called “enlarging the cake.” It was not something that was preordained. Indeed, during the initial stages of the nation’s reform and opening-up, Zhejiang was only a middling province in terms of development, ranking 12th in terms of total GDP and 14th in per capita GDP. But after 20 years of rapid development, it’s now ranked fourth in terms of total GDP. With Zhejiang’s limited land area and scant natural resources, maintaining this leading position hasn't been easy. “Common prosperity,” which is a Communist Party slogan espousing equal distribution of income, involves “dividing the cake well” to appropriately reflect people’s incomes. Zhejiang has done this well, with its urban and rural residents enjoying the top average disposable incomes in China for 21 years and 37 years, respectively, trailing only Shanghai and Beijing. Furthermore, the income disparity between urban and rural areas is relatively balanced, with a ratio of 1.90:1 in 2022 — the lowest nationally. By comparison, the national average stands at 2.45:1, with many provinces exceeding 3:1. So where did this capital and confidence originate? Undoubtedly it mainly stems from the beneficial policies of the reform and opening-up era. But Zhejiang’s proudest achievement is its unwavering support for private enterprise, which underpins its economic success. A popular saying goes: “For China’s private economy, look to Zhejiang; for Zhejiang’s private economy, look to Wenzhou and Taizhou.” Two simple yet vivid interpretations can explain the mechanism and pathway for developing the private economy to achieve “common prosperity”: 1. Vertical Expansion: People with surplus capital will consider investing it, leading to private investment. This investment forms the basis for establishing businesses, which then evolve into private enterprises. Successful operation and management of these businesses result in privatesector prosperity. By distributing earnings based on contributions, paying taxes diligently, and participating in philanthropy, they contribute significantly to society. 2. Horizontal Expansion: Capable individuals unwilling to remain in poverty start their own business. As they stabilize and grow, more family members join in. And as the venture continues to expand, even distant relatives become stakeholders. Eventually, communities and like-minded entrepreneurs participate, creating a snowball effect. Zhejiang’s strategy is aligned with the people’s basic desire for a better life by advancing productivity and wealth generation. Evidently, to get richer, one must grow, and to grow, one must reform. By enhancing the private economy and maximizing both vertical and horizontal expansion, Zhejiang has carved a realistic pathway to “common prosperity.” One shouldn’t underestimate the term “realism” in this process. Since the dawn of human civilization, visionaries have yearned for “common prosperity.” Numerous historical uprisings and revolutions worldwide have been launched under the banner of wealth equality, including various socialist experiments in the 19th century. Yet, many of these efforts fell short, primarily due to their utopian approach, which lacked a realistic pathway. Over the years, Zhejiang’s success has lied in the synergy between its populace and governance structures, leading to four distinctive economic models: 1. A private economy that fuels market-driven forces from within. 2. An ecological economy based on the value transformation of green waters and lush mountains. 3. A digital economy propelled by future technologies. 4. A cultural economy that ensures both material and spiritual wealth. Of these, the private economy is of paramount importance, because it's intrinsically tied to the fundamentals of growth. Despite its imperfections, the private sector remains a “warrior,” as renowned Chinese writer Lu Xun once noted. The government’s role is to provide a conducive environment for its growth — a path of righteousness. As for wealth distribution, greater emphasis needs to be placed on redistribution, where the government, not private enterprises, plays a pivotal role through measures like taxation, social security, and public services. This responsibility is distinct from the primary role enterprises play in creating and initially distributing wealth. Liu Ting is a former vice chairman of Zhejiang Provincial Development and Reform Commission. Opinion: How Zhejiang’s Private Economy Paved Way to Achieve ‘Common Prosperity’ - Caixin Global
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Explanation & Answer

Attached.

1

Reflection on Critical Analysis.

Student name.
Course number and name of course.
Name of institution.
Name of instructor.
Date submitted.

2

Institutional Economics Reflection.
Introduction.
From a personal evaluation, the main topic mainly revolves around the ways in which
diverse levels of administrative government help private organizations, which is an essential
aspect in the comprehension of the dynamics of the economy in different regions, especially
within the operations of China. The main aim of the reflection is to analyze two main opposing
standpoints, as highlighted in the article by Dongxu Zhou and Ting Liu, with the main focus
on their evaluation and contribution to the underlying topic. In addition, we will examine the
main limitation of the article in regard to the arguments, recognizing any underlying gap in
comparison to literature on academic settings, and highlight the different implications of the
author’s argument, which leads to offering personal valuable insights.
Critical Reflection.
The article evaluation by Zhou Dongxu mainly emphasizes the significance of
rectifying different unreasonable practices that help in boosting the confidence and operation
of private corporations. In addition, the author presents the primary detrimental influences on
the governance of arbitrary administrative operations, as well as advocacy for the stability and
predictability of the business operational environments (Dongxu, 2023). Furthermore, Zhou
Dongxu emphasizes the need for equity and just compensation, the equitable treatment of all
corporations or enterprises, and the precise boundaries set between the federal government and
market operations. In addition, the author argues for the importance of communication on a
regular basis between the private corporation and administrative government, which addresses
the underlying grievances efficiently.
On the other hand, the perspective of Liu Ting...


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