CHAPTER 3. BEHAVIOURAL ECONOMIC ANALYSIS BEHIND THE UNEQUAL DISTRIBUTION OF PUBLIC BUDGET
Introduction
In the last chapter I demonstrated that the high distribution in Current Expenditure, without a developed infrastructure and assets, is breaching the social pact from law perspective, it is unequal in the broadest sense and ineffective from law and economic point of view, since the priorities to use our resources are incorrectly assigned and, if the government, as an agent, decides to distribute in that way, then achieving their goal of overcoming the poor outcomes in education, health, social security, housing and basic public services will be more difficult.
The problem we found in the case of Mexico, is when Mexican society realizes, if so, that only a few “citizens” (politicians, bureaucrats and citizens who benefit from government acquisitions) allocate a big percentage of the budget for their salaries and the operational resources for acquiring goods and services that are bound to satisfy unproductive activities, while the priorities are the worst in all the indexes of the OECD; then those individuals are not complying, neither justifying, the social pact.
In that sense to analyze the social pact, particularly the budgeting process and the unequal distribution of the public resources, economic models and theories harness to understand
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Particularly, on one hand, the problem lies in incentive agent’s actions in principal’s interest rather than agent’s self-interest. And, in the other hand, agency theory finds an asymmetric information conflict, that I consider can be seen from two different perspectives: the rational ignorance of the well-informed society in the case of the social contract and the advantageously position of the agents in the social contract regarding the information about public budget
Skyrms’ book, Evolution of the Social Contract, offers a compelling explanation as to why individuals, when placed with one-shot prisoner’s dilemmas, will often cooperate, or choose the equilibrium that will benefit both parties equally. He uses examples to outline how individuals of certain environments frequently engage in activities that benefit the group at their own personal expense. Using both game theory and decision theory, Skyrms explores problems with the social contract when it is applied to evolutionary dynamics. In the chapters of the book, he offers new insights into concepts such as sex and justice, commitment, and mutual aid.
Mexican Lives is a rare piece of literature that accounts for the human struggle of an underdeveloped nation, which is kept impoverished in order to create wealth for that of another nation, the United States. The reader is shown that the act of globalization and inclusion in the world’s economies, more directly the United States, is not always beneficial to all parties involved. The data and interviews, which Hellman has put forth for her readers, contain some aspect of negativity that has impacted their lives by their nation’s choice to intertwine their economy with that of the United States. Therefore it can only be concluded that the entering into world markets, that of Mexico into the United States, does not always bring on positive outcomes. Thus, one sees that Mexico has become this wasteland of economic excrement; as a result it has become inherently reliant on the United States.
Those groups who bled and died from 1910-1917 for a more just and equitable Mexico were subsequently denied the fruits of economic growth and transparent political representation. Efforts to accelerate growth since the mid 1930s “have tended to produce- or at least, to reinforce- a highly inequitable pattern of income distribution” (Hansen 71). According to Roger Hansen, the author of The Politics of Mexican Development, “no other Latin American political system has provided “more rewards for its new industrial and commercial agricultural elites” (87) since 1940 and “in no other major Latin American country has less been done directly by the government for the bottom quarter of society” (87). Mexico’s development created a middle class and brought a certain measure of industrialization but further disenfranchised the poor. Mexico’s leaders implemented a development policy which violated the ideals of the revolution by shirking the responsibilities of a social democracy.
Society’s structure has been debated and contested as far back as ancient Greece. Since then, man has developed social systems that greatly differ from anything the ancients had in mind. One such system is the social contract theory, which first came to prominence around the time of the enlightenment. Simplified, social contractarians argued that in order to achieve a balanced and stable society, all of its members must sacrifice certain liberties to a government or similar authority. As Rousseau explains, the contract begins when “Each of us places his person and all his power in common under the supreme direction of the general will” (148). Essentially, it is an agreement between the rulers and the ruled that produces a stable political state. John Locke’s The Second Treatise of Government and Jean-Jacques Rousseau’s The Social Contract are both enlightenment works that detail contractarianism, yet each has a unique and different way of considering the social contract. Although John Stuart Mill is also known for his work with Utilitarianism, his essay On Liberty considers consent and other issues relating to contract theory. These authors provide different insights into the social contract, and frequently one will reject another’s idea and offer a new solution. Even after this meshing of ideas and solutions, contract theory falls short of practicality. The idea is appealing, appearing on the surface as a fair and just way of governance. However, true liberty cannot arise from a contract, as man cannot be “forced to be free” (150). There are two fundamental flaws with contractarianism: it is not practical and it ignores human nature, and even if were possible to establish a true contract-based society, the citi...
Mexican-Style Neoliberalism: State Policy and Distributional Stress.? in The Post NAFTA Political Economy: Mexico and the Western Hemisphere, Carol Wise, ed. University Park : Pennsylvania State University Press, 1998. ?
The first argument of this paper shall discuss the use of fiscal federalism as a highly beneficial and worthwhile cost for maintenance of policy proposals. As fiscal federalism is defined as “understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government” , it will be witnessed that the decentralized use of fiscal federalism is its best use. Fiscal federalism refers to vertical imbalances where the central government gives too much or too little money to lower levels of government. If local governments and...
Between the period of 1820-1861 there was a number of political compromises done in order reduce the sectional tension between the North and the South. While each of the compromises created helped the issue that the country was facing at that time, they did not help overall. The compromises were only a temporary fix for the country’s problem of sectionalism. Therefore while political compromises were effective in reducing the tension between the North and the South it did not help in preventing the civil war.
“The Perilous State of Mexico.” The Wall Street Journal. Dow Jones & Company, 21 Feb. 2009. Web. 16 Feb. 2014.
The Social Contract and Its Impact on the Government The “Social Contract” was a theory written in the 17th and 18th centuries. This theory argues four important main points. These main points said that the state existed to serve the will of the people, that people were the only source of government power, that the people were free to withhold power of the government, but also had the ability to give power to the government, and finally it stated that the ideas in this document limited government, individual rights, and popular sovereignty. James Harrington, Jean Jacques Rousseau, Thomas Hobbes, and John Locke contributed to this document. Thomas Hobbes and John Locke were both very important men, and both had a tremendous influence on the future of this country.
In the Declaration of Independence it tell us that “all men are created equal” and that all men are free. Which is the same type of statement that the The Declaration of the Rights of Man says “men are born and remain free and equal in rights”. Then, when we look into the Social Contract, of course the first thing it addresses is the idea that “man was born free”. Knowing these facts, why would people not assume that each one of these historical documents were influenced by one another? While comparing and contrasting, it was interesting to see the differences and similarities in each of these written works. There are not the same by any means, but you can definitely pinpoint certain ideas that could have been pulled from the others.
Today, more than ever, there is great debate over politics and which economic system works the best. How needs and wants should be allocated, and who should do the allocating, is one of the most highly debated topics in our current society. Be it communist dictators defending a command economy, free market conservatives defending a market economy, or European liberals defending socialism, everyone has an opinion. While all systems have flaws and merits, it must be decided which system is the best for all citizens. When looking at the financial well being of all citizens, it is clear that market economies fall short on ensuring that the basic needs of all citizens are met.
Socialization is a never ending process that continues to change our perspectives to help us learn and adapt to a social reality. This lifelo.ng process can be split up into two different parts; primary socialization, the first socialization an individual undergoes in childhood, and secondary socialization, when an individual adapts to a specific group within society. Although one may believe that secondary socialization has more power over primary socialization since it is current and therefore more relevant, primary socialization has more authority considering that it lays down the foundation for all future socializations. Our initial values, attitudes, and actions are more important since we internalize them
The New Public Management plays a valuable role as a policy tool and as a means by which to advance rhetoric of efficiency, prudence and efficacy in state management, at a time when these values had re-emerged as a primary driving force behind mass-liberation of national economies and the international political economy in general . This new policy was implemented with a mind to change the old running of the public sector into a new form by imitating the business style of the private sector. This is because some of the politicians felt that the public servants lucked the drive and determination of the many citizens that worked outside of the public sector. So the idea was to become more like the private sector in terms of implementing better services to the citizens, as well as being more challenging when producing policies which conflict with others in the public sector. One of the major reasons why this policy gained more than enough support in earlier years was as a result of the Cold War.
From elementary to high school and even college students are compelled to attend school all around the world. In schools students not only learn general education but learn a lot about themselves. It is said that in the first twenty years of an individual’s life are the years that the individual finds out who they really are. An individual’s moral beliefs are one of the most personal and complex pieces of that individual. There are several great moral theories that could be taught in school, but to only choose one is very difficult. Some of the most known moral theories are Utilitarianism, Virtue Ethics, Kantianism and even Social Contract Theory. All of these theories were developed by some of the most incredible philosophers of all time.
Perception of Social Contract Theory and the Role it Plays in Government Creation Social Contract Theory is a view of a person's moral and political obligations are all dependent upon a contract that exists between all members of the society in which they live. This idea is one that can be considered to be as old as philosophy in its entirety. For example, Greek philosopher, Plato, can be considered to be the first person offering credit towards the true meaning of social contract theory in his work, Republic. Here, Glaucon, makes an attempt to answer what justice is through social contract theory. Glaucon believes that justice is just an attempt to keep from unjust situations and avoid ultimate extremes by binding a society together under an agreement.