Question

Every country in the world is constructed around the same set of institutional frameworks that differ only in how governments manage them. Identify the specific components of an institution. Next, use two (2) examples of institutions —such as a financial system, a judicial system, or the armed forces — to illustrate what developing countries overall have done to weaken or strengthen such institutions.

Answer 1

Answer:-

Every country in the world is constructed around the same set of institutional frameworks that differ only in how governments manage them. Identify the specific components of an institution. Next, use two examples of institutions such as a financial system, a judicial system, or the armed forces to illustrate what developing countries overall have done to weaken or strengthen such institutions.

Specific components of an institution:

a) Policies relevant to the institution, are made in the institution

b) There is a chain of command in the institution which varies with the type of institution

c) A particular institution is responsible for addressing specific issues of the society

d) All institutions use public money but how they use it varies with the institution.

Judicial System

Developing countries have strengthened their Judiciary by allowing more freedom to it. It has been done by amending the old laws, by providing more transparency in the system and with the incensement in the sophistication judiciary has also evolved because of the strong public demand.

Developing countries have also strengthened their armies by allocation more budget for the army, promoting more research in the field of defense, by purchasing latest technology from the developed nations, by improving the average lifestyle of soldiers by providing them more facilities.

Role of developing countries in the financial system:-
In most developing countries, the rural poor are generally accessing a small amount of institutional
finance. This is partly because the rural poor lack the physical security necessarily needed for
bank loans. A discouraging point for banks is the high per unit cost of delivering financial
services to the poor. It takes a lot of time to service rural people, and the volume of their individual
savings and loan operations is low. Dealing with the poor as individuals are simply not cost-effective for banks, nor is it profitable, given the interest rate ceilings under which most banks
operate. Despite the variations across countries, all financial systems need to perform a few key
functions effectively. Ideally, they optimize the allocation of scarce funds to the most worthy
projects, allow savers and investors to maximize their return for a given level of risk, allowing risks
to be diversified across a wide pool of families and businesses (to reduce the danger of
catastrophic losses), and help transform shorter-term assets into funds that can support longer-term projects.

A regulation of financial institutions varies in different countries. The financial institution
regulations are described precisely by the government authorities of different countries. The
principal objective of these government authorities is to regulate the financial activities going on
in the country. There has always been an ambiguity that whether government regulating are helping
to grow or degrading these institutions. There has been an idea given by economist that
government regulations are actually helping to win public