Critical Thinking and Discussion Questions 1 What is the rel

Critical Thinking and Discussion Questions 1. What is the relationship among property rights, corruption, and economic progress? How important are anticorruption efforts in the effort to improve a country\'s level of economic development? the rate of new business formation in India during the 1947-1990 time frame? How do you think these factors affected the rate of economic growth in India during this time frame? 2. You are a senior manager in a U.S. automobile company c. How would privatization, deregulation, and the considering investing in production facilities in China, Russia, or Germany. These facilities will serve local market demand. Evaluate the benefits, costs, and risks associated with doing business in each nation. Which country seems the most attractive target for foreign direct investment? Why? removal of barriers to foreign direct investment affect the efficiency of business, new business formation, and the rate of economic growth in India during the post- 1990 time period? d. India now has pockets of strengths in key high- 3. Reread the Country Focus on India, and answer the technology industries such as software and pharmaceuticals. Why do you think India is developing strength in these areas? How might success in these industries help generate growth in the other sectors of the Indian economy? following questions: a. What kind of economic system did India operate under during 1947-1990? What kind of system is it moving toward today? What are the impediments to completing this transformation? e. Given what is now occurring in the Indian do you think the country represents an attractive target for inward investment by foreign multinationals consumer products? Why? b. How might widespread public ownership of businesses and extensive government regulations have affected (i) the efficiency of state and private businesses and (ii) 82 Part Twwo National Differences

Solution

First question is answered below

1.

There exists a strong relationship between property rights and corruption and corruption and economic progress.

When property rights are well defined, there is less scope of other parties or people to interfere and thus less scope for anyone to manipulate things. The person holding the property right is well informed that he or she would be accountable for any issues related to that particular good.

This leaves less scope of corruption because the blame of corruption cannot be put on anyone else and the property right owner will make sure that his good is protected from any external harm or manipulations by others for personal gain.

Similarly, there is direct connection between corruption and economic growth. Higher the corruption, lower is the growth because people make illegal money which is unaccounted for in national records and which slows down economic progress.

In order to ensure higher economic growth, it is important that there are well defined property rights in the economy.