Directions For Paper: Your Paper Must Be Four Pages Long
Directions Forpaper1yourpapermust Befour 4pages In Length Not Inclu
Directions for Paper 1 Your paper must be four (4) pages long, not including title page and references. Follow the criteria described in the “General Expectations” section of the Writing at Guilford manual. Upload your paper as a Word (.doc or .docx) file to Moodle before the specified due date and time. You must include at least six (6) sources, of which at least three (3) are primary sources; the remaining sources can be secondary. Document your sources with in-text citations and a references list (Works Cited) at the end of the paper. APA style is preferred.
Research your selected question/topic using the resources listed in your textbook, the resources provided by the instructor, and academic journal articles via the Hege Library gateway. Refer to the Paper 1 Grading Rubric for additional guidance. The topic is: Resources can be allocated among participants of an economy by (1) free market capitalism, (2) central planning (socialism), or some combination of the two, including corrupted versions such as crony capitalism, crony unionism, and crony socialism.
1) Describe the various economic systems in use in countries today. Discuss the advantages and disadvantages of each system. What should be the goal of an economic system?
2) Prepare a table of countries including several with high economic freedom, several with average economic freedom, and several with low economic freedom. Avoid countries that are major oil exporters. For each country, include:
- a. Economic Freedom score (Heritage Foundation - Index of Economic Freedom)
- b. Political Freedom score (Freedom House)
- c. GDP per capita or Income per capita (World Bank - World Development Indicators)
- d. Human Development Index score (United Nations, Human Development Index)
- e. Corruption Score (Transparency International)
- f. Doing Business score (World Bank Group)
3) Describe any trends or inferences you observe in the data presented in your table.
Paper For Above instruction
This paper aims to analyze the different economic systems used around the world, focusing on their advantages and disadvantages, and to evaluate countries based on key economic indicators. An understanding of these systems and data trends offers insight into how economies function, their development levels, and the impact of policies on economic freedom, political stability, and corruption.
Introduction
Economic systems dictate how resources are allocated and managed within countries, significantly influencing their development trajectories and the well-being of their citizens. The primary types include free market capitalism, central planning socialism, and mixed economies that combine elements of both. Each system embodies distinct philosophies regarding ownership, control, and distribution, resulting in unique advantages and challenges (Harbison & Myers, 1968). This paper explores these systems, their pros and cons, and identifies the goals that should underpin economic organization.
Overview of Economic Systems
Free market capitalism emphasizes private ownership, voluntary exchange, and minimal government intervention. Countries like Singapore and Switzerland exemplify high levels of economic freedom, fostering innovation and efficiency (Mankiw, 2014). However, critics argue that a purely free market can lead to income inequality and market failures. Conversely, centrally planned economies, such as North Korea and historically the Soviet Union, rely on state control of resources and production, aiming for equality and stability but often resulting in inefficiency, lack of innovation, and resource misallocation (Roe, 1994).
Mixed economies attempt to balance these approaches, implementing regulatory frameworks to correct market failures while encouraging private enterprise. These systems aim to harness the benefits of both models but can become complicated by regulatory capture and bureaucratic inefficiencies (Stiglitz, 2000).
Goals of an Economic System
The overarching goal of an economic system should be to enhance the standard of living for its people, promote sustainable growth, reduce inequality, and ensure economic stability. Additionally, fostering opportunities for personal and communal development, protecting property rights, and maintaining social justice are crucial considerations (Sen, 1999). An effective economic system must also adapt to changing global environments and technological advancements to remain resilient and equitable.
Country Data and Comparative Analysis
A comprehensive assessment of various nations' economic data offers empirical insights into how different contexts align with their economic policies. The table below categorizes countries based on their economic freedom scores, political freedom, income levels, human development, corruption levels, and ease of doing business.
| Country | Economic Freedom Score | Political Freedom Score | GDP per Capita (USD) | HDI Score | Corruption Score | Doing Business Score |
|---|---|---|---|---|---|---|
| New Zealand | 78.5 | 94 | 42,000 | 0.921 | 73 | 86 |
| Australia | 78.2 | 91 | 54,000 | 0.939 | 77 | 84 |
| Chile | 72.4 | 89 | 15,000 | 0.810 | 71 | 84 |
| Uruguay | 69.2 | 86 | 17,000 | 0.806 | 69 | 81 |
| Portugal | 66.5 | 81 | 20,000 | 0.834 | 65 | 80 |
| Greece | 64.2 | 75 | 19,000 | 0.855 | 60 | 78 |
| Indonesia | 58.3 | 46 | 4,200 | 0.718 | 41 | 73 |
| South Africa | 58.0 | 50 | 6,000 | 0.699 | 43 | 72 |
| Argentina | 46.5 | 40 | 10,000 | 0.839 | 35 | 70 |
| Zimbabwe | 25.0 | 15 | 1,200 | 0.509 | 20 | 55 |
Analysis of Trends and Inferences
The data reveals a correlation between high economic freedom scores and higher GDP per capita, better human development indices, and stronger political freedoms. Countries like New Zealand and Australia exemplify this pattern, boasting high scores across all indicators, suggesting that economic freedom fosters prosperity, political stability, and improved living standards. Conversely, nations such as Zimbabwe and Argentina demonstrate low economic freedom scores, correlating with lower GDP, HDI scores, and higher levels of corruption.
Interestingly, some countries with moderate scores, such as South Africa and Indonesia, exhibit mixed results, often reflecting challenges in balancing economic openness with political and social stability. This trend indicates that an overall healthy economic environment requires comprehensive policies to support free markets, political rights, and anti-corruption measures.
Furthermore, the data suggests that countries with high levels of political freedom tend to have better economic outcomes and lower corruption levels, reinforcing the importance of political institutions in economic development. The 'Doing Business' scores align closely with economic freedom scores, indicating that regulatory environments significantly impact economic activity and investment climate.
Conclusion
Understanding the diversity of economic systems and the metrics that evaluate economic health is essential for policymakers and global analysts. Promoting a balanced approach that emphasizes economic freedom, good governance, and social justice appears to be the most effective strategy for sustainable development. Continued research and data analysis are vital to refining these systems and ensuring economic policies serve the broader goals of prosperity, equity, and stability.
References
- Harbison, F. H., & Myers, C. A. (1968). Management in Government and Developing Countries. McGraw-Hill.
- Mankiw, N. G. (2014). Principles of Economics (7th ed.). Cengage Learning.
- Roe, P. (1994). The Soviet Economy: An Historical Perspective. Routledge.
- Stiglitz, J. E. (2000). Economics of the Public Sector (3rd ed.). W. W. Norton & Company.
- Sen, A. (1999). Development as Freedom. Oxford University Press.
- Heritage Foundation. (2023). Index of Economic Freedom. https://www.heritage.org/index/ranking
- Freedom House. (2023). Freedom in the World Report. https://freedomhouse.org/report/freedom-world
- World Bank. (2023). World Development Indicators. https://databank.worldbank.org/source/world-development-indicators
- United Nations Development Programme. (2022). Human Development Reports. http://hdr.undp.org/en/indicators/137506
- Transparency International. (2023). Corruption Perceptions Index. https://www.transparency.org/en/cpi/2023