Discussion Prompt: In class, we discussed Economic Power and how we can use the
ID: 1120701 • Letter: D
Question
Discussion Prompt: In class, we discussed Economic Power and how we can use the Exit, Voice, Loyalty game for understanding when individuals (or organizations) have economic power (or not) and when they can use their economic assets to get what they want. For your initial post, browse a major newspaper for an article that discusses some issue surrounding an economic asset (such as a natural resource, a skill held by some employee, foreign aid, real estate holdings, a fctory, money, etc.), and analyze the likely economic power of the asset holder in the situation described iri the article using the logic of the Exit, Voice, Loyalty game. Your initial post should do the following: 1) provide a link to your article; 2) summarize the scenario (what is the economic asset under discussion? who owns or holds that economic asset? what does the asset holder want, and from whom?): 3) explain what kind of economic asset it is (i.e. fixed or liquid), and whether the asset holder is likely to have a credible exit threat for that asset in the scenario described; and 4) using the logic of the Exit, Voice, Loyalty game, explain whether the person who has the economic asset is likely to get what they want (i.e. if the asset holder wants something, does the asset give them leverage or power over the person or organization that can give it to them? are they autonomous of or dependent on the asset holder?) In other words, given what you know of the EVL game, what outcome is likely to occur here?Explanation / Answer
The EVL model can be utilized to explain relations between nation states & their residents . The framework predicts that when residents have a likely exit threat & states are reliant on their residents, states are less probable to take actions that the residents would oppose. In the case of increased taxes by the state, instances of likely exit threats comprise having the economic means to flee / the ability to simply evade taxation. States are said to be reliant on their residents if they value resident loyalty greater than they value the gains that would outcome from a policy alteration. When both these criteria are fulfilled, the framework would anticipate that the state wouldn’t implement a strategy that would encourage residents to exit / to utilize voice