Why strong social institutions are needed to survive group 5

Why strong social institutions are needed to survive economic growth? Answered by Trong An, Linh Chi, Hoang Anh, Thu Hien Explanation  The legal and administrative organizations that underpin every society form what we economists call an “enabling environment” for the creation of wealth  Collaboration between public and private sectors is particularly important when it comes to boosting productivity  In the absence of strong institutions the alliance can become dysfunctional, with both sectors colluding in the pursuit of profit at the expense of the consumer  A healthy relationship between business and government should be a priority for an economy Example: divergence of Korean Peninsula  North Korea   Communism  South Korea Totalitarianism  Resources and industries controlled by the   Restrictions towards outside influences ⇒ Starvation ⇒ Underdeveloped economies ⇒ Bad institutions Free-market oriented economy  government  Capitalism Commercial cooperation Supporting entrepreneurship Costumer-responding markets ⇒ Emerging market of Asia ⇒ Gigantic industries: cosmetics, entertainment, tourism, etc ⇒ Dramatically developing nation ⇒ Good institutions “ …the way of utilizing institutions can lead to the prosperity or the failure of a nation ” Group ... and private sectors is particularly important when it comes to boosting productivity  In the absence of strong institutions the alliance can become dysfunctional, with both sectors colluding... cosmetics, entertainment, tourism, etc ⇒ Dramatically developing nation ⇒ Good institutions “ …the way of utilizing institutions can lead to the prosperity or the failure of a nation ” Group ... Communism  South Korea Totalitarianism  Resources and industries controlled by the   Restrictions towards outside influences ⇒ Starvation ⇒ Underdeveloped economies ⇒ Bad institutions Free-market