Send us a text Corruption persists not because people like it, but because it becomes embedded in the incentive structure of the state, creating feedback loops that reinforce themselves and resist reform. • A prebend is a type of benefice historically given to clergymen, now a useful concept for understanding corruption in developing nations • Douglas North extended Coase's concept of transaction costs to explain why institutions matter in economics and politics • Bad institutions crea...
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Send us a text Corruption persists not because people like it, but because it becomes embedded in the incentive structure of the state, creating feedback loops that reinforce themselves and resist reform. • A prebend is a type of benefice historically given to clergymen, now a useful concept for understanding corruption in developing nations • Douglas North extended Coase's concept of transaction costs to explain why institutions matter in economics and politics • Bad institutions crea...
Pins: Division of Labor is Limited by Transaction Costs
The Answer Is Transaction Costs
22 minutes
1 month ago
Pins: Division of Labor is Limited by Transaction Costs
Send us a text Adam Smith's pin factory example from "The Wealth of Nations" demonstrates how dividing labor into specialized tasks dramatically increases productivity. Ten workers specializing in different aspects of pin-making could produce 48,000 pins daily, while individually they might struggle to make even 20 pins each—a productivity increase of at least 240 times. This division of labor, Smith argued, is limited by the extent of the market. Transaction costs—expenses associated with e...
The Answer Is Transaction Costs
Send us a text Corruption persists not because people like it, but because it becomes embedded in the incentive structure of the state, creating feedback loops that reinforce themselves and resist reform. • A prebend is a type of benefice historically given to clergymen, now a useful concept for understanding corruption in developing nations • Douglas North extended Coase's concept of transaction costs to explain why institutions matter in economics and politics • Bad institutions crea...
