98 - Economic institutions Process Question 1. Does economy affect on the economic development of one country? How? Explain, Economic Institutions Aneconomic institution provides the distribution of goods and services to the mem- bers ofthe society. In societies with a recognized economic system, five parts are essential for the economic system to function accurately. These are production system, a service system, distribution system, consumers system and a system of exchange. ‘The most important function of an economic institution is the production and distribu- tion of goods and services. However, the economic institution also causes some socializa- tion that brings about a distribution of power. It also influences the culture and affects social stratification. Reciprocity (Cultural Anthropology) Incultural anthropology, reciprocity refers to the non-market exchange of goods or labor ranging from direct barter (immediate exchange) to forms of gift exchange where a retum is eventually expected (delayed exchange) asin the exchange of birthday gifts. Itis thus distinct from the true gift, where no retum is expected. Reciprocity is said to be the basis of most non-market exchange. ‘When the exchange is immediate, as in barter, it does not create a social relationship. ‘When the exchange is delayed, it creates both a relationship as well as an obligation fora retum (i, debt), Hence, some forms of reciprocity can establish hierarchy if the debt is notrepaid. The failure to make aretum may end a.elationship between equals. Recipro- cal exchanges can also have a political effect through the creation of multiple obligations and the establishment of leadership, as inthe gift exchanges (Moka) between Big Men in Melanesia. Some forms of reciprocity are thus closely related to redistribution, where goods and services are collected by a central figure for eventual distribution to followers. Transfer A change of ownership of an asset ora movement of funds and/or assets from one account to another is called transfer. Transfer may involve an exchange of funds when it involves a change in ownership, such as when an investor sells real estate holding. In this case, there is a transfer of ttle from the seller to the buyer and a simultaneous transfer of funds, equal to the negotiated price, from the buyer to the seller. ‘The term transfer may also refer to the movement of an account from one bank or brokerage to another. A transfer of funds from one account to another, where both ac- erpege CVHge@enn = = BesCultural, Social and Political Institutions - 99 ‘counts are held by the same individual, may occur for purposes of financial planning or better investment retums. Examples of such transfers would be funds transferred from a checking account o a savings account that offers higher rates of interest or ftom a savings account to an IRA. Most banks enable such inter-account transfers to be conducted online. Redistribution (Cultural Anthropology) Incultural anthropology and sociology, redistribution refers toa system of economic exchange involving the centralized collection of goods from members of a group followed by the distribution of those goods among those members. Itis a form of reciprocity. Inmodern mixed market economies, the central form of redistribution is facilitated through taxation by the state. Redistribution of property therefore occurs where proper- ties are allocated back to individuals or groups within society either through the provision of public services or directly through welfare benefits. Market Transaction ‘The exchange of goods and services through a market is called market transaction. ‘The set of market transactions taking place in the economy is most important in terms of ‘measuring gross domestic product (GDP). Market transactions provide the basic data used by number crunchers at the National Economic Development Authority to begin the estimation of GDP. However, these number crunchers don't just want to measure market. ‘transactions, their goal isto measure economic production. As such, they eliminate some ‘market transactions that do not involve economic production, and then add economic production that do not involve market transactions. Market Anactual ornominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, formoney or barter is called a market, Markets include mecha- nisms or means for: (1) communicating the price information, Q) determining price ofthe traded item, (3) facilitating deals and transactions, and (4) effecting distribution. ‘The market fora particular item is made up of existing and potential customers who need itand have the ability and willingness to pay fort.100 - non-state Institutions Amarketis one of the many varieties of systems, institutions, procedures, social rela- tions and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers, It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and allocation of resources in a society. Markets allow any tradeable item to be evaluated and priced. A market emerges more or less spontane- ously or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf. ownership) of services and goods... A market is a group of buyers and sellers, where buyers determine the demand and. sellers determine the supply, together with the means whereby they exchange their goods or services. Although many markets exist in the traditional sense such as a marketplace there are various other types of markets and various organizational structures to assist their functions, the nature of business transactions could be used to define different markets. State State is an organized political community living under a single system of government. Often state and government are used as synonyms. Both words refer to an organized political group that exercises authority over a particular territory, States may or may not be sovereign, For example, federated states that are members of a federal union have only pattial sovereignty, but are, nonetheless, states. Some states are subject to extemal sover~ ceignty orhegemony where ultimate sovereignty lies in another state. The term "state" can also refer to the secular branches of government within a state, often as a manner of contrasting them with churches and civilian institutions. ‘Many human societies have been governed by states for millennia, but many have been stateless societies. The first states arose about 5,500 years ago in conjunction with the rapid growth of urban centers, the invention of writing, and the codification ofnew forms ofreligion, Over timea variety of different forms developed, employinga variety of {juslifications for their existence (such as divine right, the theory of the social contract, etc). Inthe 21st century the modern nation-state is the predominant form of state to which people are subject. Non-state Institutions These are establishments which are not owned and controlled by the government. ‘Some non-state institutionsare for profit and others are nonprofits and some are forpersonal investments and forfinancial help. Banks and Corporations Banks are places or institutions where people place or deposit their money or savings with corresponding interest on a given period of time and, or assets for safekeeping. ap ga g8s8 i ee heBanks play an important role as an intermediary, or go-between, in the financial system. There are three main functions of banks: 1. Banks are depository of savings. Ifthere were no banks, people would have to store and protect their savings themselves, which would involve majorrisks, 2. Banks are largely responsible for the payments system. Electronic payments are becoming more important as people use less cash. This means that banks are processing more card payments, transfers, direct debits, etc. every day. 3, Banks issue loansto both people and companies. Without banks, it would be very hard for people to buy a house or start a business, or for companies to make ‘investments. Banks do a variety of other things, such as helping corporations with their, often ‘more complex, financial needs. This can range from the various ways to gain access to capital for growth and investments, to assisting in mergers and acquisitions, to convert- ingcurrencies. Corporations ‘A corporation is a company or group of people authorized to act asa single entity (legally a person) and recognized as such in law. Early incorporated entities were estab- lished by charter (Le. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through regis- tration. Corporation is alegal entity created under state law and is designed to generate a profit. Corporations come in many different types but are usually divided by the law ofthe jurisdiction where they are chartered into two kinds: 1, whether or not they can issue stock 2, whether or not they are for profit. ‘Where local law distinguishes corporations by ability to issue stock, corporations allowed to do so are referred to as "stock corporations." Ownership of the corporation is through stock, and owners of stock are referred to as "stockholders." Corporations not allowed to issue stock are referred to as "non-stock" corporations, Considered the own- ers of the corporation are those who have obtained membership in the corporation, and are referred to as a "members" of the corporation. Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit” and "not-for-profit" corpora- tions, respectively. ‘There is some overlap between stock/non-stock and for profit not-for-profit in that not-for-profit corporations are always non-stock as well. Profit corporation is almost always a stock corporation, but Some for profit corporations may choose to be non- stock.102 - Non-state institutions Registered corporations have legal personality and are owned by shareholders whose liability is limited to their investment. Shareholders do not typically actively manage a cor poration; shareholders instead elect or appoint a board of directors to control the corpo- ration in fiduciary capacity. Cooperatives and Trade Unions A cooperative is a legal entity owned and democratically controlled by its members. ‘Members often have a close association with the enterprise as producers or consumers of its products or services, or as its employees. Cooperatives often share their earnings with the membership as dividends, which are divided among the members according to their participation in the enterprise, such as, patronage, instead of according to the value of their capital shareholdings. Cooperatives play a critical role in building community wealth for several key reasons: 1. They often provide quality goods and services to areas that have been shunned by traditional businesses because they are deemed less profitable markets. 2. They typically invest in local communities. For example, many rural cooperative utilities finance community infrastructure projects, make equity investments in lo- cal businesses, make grants to neighborhood nonprofits, and sponsor a range of community-focused events, 3. Since most cooperative members are local residents, business profits remain and circulate within the community. 4. Cooperative membership builds social networks and strengthens social cohesion, which are essential elements of strong, healthy communities, by connecting di- ‘verse community residents, 5. Purchasing cooperatives, in particular, help small, local businesses remain com- petitive within markets dominated by large, national retailers. 6. Worker cooperatives, in particular, create quality, empowering jobs for commu- nity members (for more details, please see our page on worker cooperatives). 7. Cooperatives are typically based on the cooperative values of "self-help, self- responsibility, democracy and equality, equity and solidarity” and the seven coop- erative principles: (1) Voluntary and open membership (2) Democratic member control (3) Economic participation by members (4) Autonomy and independence (5) Education, training and information (6) Cooperation among cooperatives (7) Concem for communityose Cultural, Social ana Political Institutions ~ 103 Cooperatives are dedicated to the values of openness, social responsibility and caring for others. Such legal entities have a range of social characteristics. Membership is open, ‘meaning that anyone who satisfies certain non- 2Cultural, Social and Political Insitations ~ 123 10, An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter. 11. Referstoa system of economic exchange involving the centralized collec- tion of goods from members of a group followed by the distribution of those goods among those members 12. An organization whose membership consists of workers and union lead- ers, united to protect and promote their common interests. 13. A Filipino superstition that attributes an illness to the greeting ofa stranger 14, A company or group of people authorized to act as a single entity (legally person) and recognized as such in law. 15. Beliefin numerous spiritual beings concerned with human affairs and ca- pable of helping or harming ltuman interests. 16. Differ from other types of networks. They exist to promote principled causes, ideas and values, to change international policy as well as make these changes real in the day-to-day lives of ordinary people 17, Refersto the education of persons who are physically, mentally, emotion- ally, socially or culturally different from so-called "normal" individuals, such that they require modification of school practices to develop them to their ‘maximum capacity. : 18. A belief'in the existence of one god, or in the oneness of God; guished from polytheism, the belief in the existence of many gods, and from atheism, the belief that there is no God. 19. Concemed primarily with continuing basic education of theélementary level and expanding it to include the leaning of employable, gainful skills, usually corresponding to four years of junior high school and two years of seniorhigh school. Non-formaleducation Monotheism Polyandry Marriage Legitimacy Political dynasty Neolocal Market Usog Animism Chiefom Corporation Secondary education Redistribution Religion Family TraditionalAuthority ‘Trade Union Special Education ‘Transnational Advocacy Group i124 Health 20, Refers to any organized systematic educational activity carried outside of the framework of the formal system to provide selected types of learning to a segment of the population. Itis a lifelong process of learn- ing by which every person acquires and accumulates knowledge, skills, attitudes, and insights from daily experiences at home, at work, at play, and from life itself. Martin L. Dennis et.al, Sociology: AN OVERVIEW. Isabel S. Panopio et. al., SOCIOLOGY Focus on the Philippines George Ritzer et.at. Sociology Experiencing 4 Changing Society ‘SOCIOLOGY The Study of Human Relationships: Third Edition Paul B. Horton & Chester L. Hunt, SOCIOLOGY INTERNET Wikipedia, the free encyclopaedia https://enwikipedia org wikifileMax_Weber_18%. jpg htips://enwikipedia org/wikifileMatteidoganportrait,jpg_ hitps://congress.gov.ph/downloadbasic_16/HBO3587 pdf https:/svww senate. gov.philistdata/106169091 pat htps:/wwrw.businessdictionay.convdifinition/industrial-union htm! |itps://www.britanica. com/biography/Edward-Bumett-Taylor