- How do elections affect to the economy -

• What is Economics?• What is election?• Relationship between elections and economy• How do elections affect to the economy?• Where does money go in an election?• World contest & Sri Lankan contest of elections• Weaknesses of Sri Lankan elections• How to overcome the weaknesses?

CONTENT OF THE PRESENTATION

ECONOMICS IS THE STUDY OF HOW PEOPLE CHOOSE TO USE THEIR SCARE RESOURCES IN AN ATTEMPT TO SATISFY THEIR UNLIMITED WANTS.

OR

THE WEALTH AND RESOURCES OF A COUNTRY OR REGION, ESPECIALLY IN TERMS OF THE PRODUCTION AND CONSUMPTION OF GOODS AND SERVICES IS ALSO CALLED “ECONOMY”.

What is Economics?

An election is a formal decision making process by which a population chooses an individual to hold public offices. Elections have been the usual mechanism by which modern representative democracy has operated since the 17th century Elections may fill offices in the legislature , sometimes in the executive and judiciary, and for regional and local government..

The act of a party casting votes to elect an individual for some type of position. Elections may involve a public or private vote depending on the position. Most positions in the local, state, and federal governments are voting on in some type of election.

WHAT IS ELECTION?

There are various ways in which elections affect the economy such as: Formations of economic policy. International Trade Gross Domestic Product per capital income Income Inequality War and Disturbances Scams and Corruption

RELATIONSHIP BETWEEN ELECTIONS AND ECONOMY

♦Industrial Production Political risk insurance cannot be a panacea for every conceivable political risk that can confront an international trader or investor. But in a world filled with political change, obtaining political risk insurance can make the difference between operating a profitable business and making a costly mistake.

♦Inflation Most economists acknowledge that differences in monetary and fiscal policies among countries are the main reasons behind the inflation variability they sustain. However this explanation leads to the question, ‘Why countries differ in conducting Fiscal and Monetary policies’. In fact structural features of a specific economy determine its government ability to collect taxes.

HOW DO ELECTIONS AFFECT TO THE ECONOMY?

♦ BusinessesThe political factors affecting business are often given a lot of importance. Several aspects of government policy can affect business. All firms must follow the law. Managers must find how upcoming legislations can affect their activities.

♦ Economic PoliciesPolitical instability is regarded as a serious harmful to economic performance.. Political instability is likely to shorten policymakers’ horizons leading to sub-optimal short term macroeconomic policies. It may also lead to a more frequent switch of policies, creating volatility and thus, negatively affecting macroeconomic performance.

 

HOW DO ELECTIONS AFFECT TO THE ECONOMY? CONT.

♦ Economic GrowthGrowth is significantly lower in countries and time periods with a high propensity of government collapse. Some economists also have found that higher degrees of political instability lead to lower economic growth.

♦ EmploymentSelf-serving political actions can negatively influence social groupings, cooperation, information sharing, and many other organizational functions. It is the use of power and social networking within an organization to achieve changes that benefit the organization or individuals within it. Some of the personal advantages may include access to tangible assets, or intangible benefits such as status or pseudo-authority that influences the behavior of others.

HOW DO ELECTIONS AFFECT TO THE ECONOMY? CONT.

♦ InvestmentOften, investors do not receive cash or other monetary payments at the time of the transfer of these assets, but they’re involved in some sort of extended financing agreement. Not only potential investors, but also the policymakers in countries that are devising policies to attract investors need to be aware of the political relationships that could jeopardize these deals.

♦ Economical RatesInvestment decisions’ sensitivity to tax rates is well known among academics and policy makers. As a consequence countries are lowering their tax rates in order to retain and attract investments. Political scientists have shown an interest in tax rate determinants and naturally focused on political variables but early studies tended to consider limited determinants, such as party color and election .

 

HOW DO ELECTIONS AFFECT TO THE ECONOMY? CONT.

Election costs can be categorized as either transaction costs or constituency costs. Transaction costs arise from decentralization of the legislative process while constituency costs are the result of ideological opposition to policy changes that benefit capital. Ex:- Posters and Banners Wooing voters: Gifts like food, clothes, trips and individual

benefits. Rent a crowd Commuting cost: Provision of Petrol and Diesel cost for

campaigners. Temporary offices Full time party workers: Each candidate has some full time

party workers Transport cost: To ferry jeep/ taxi costs

WHERE DOES MONEY GO IN AN ELECTION?

Usually in European countries they use an electronic method for the election and in Sri Lanka we use a paper based method.

In Sri Lanka, the number of crimes are really high during the election period and in European countries the election is quite calm.

European countries don’t spend much more money for promotion purposes but in Sri Lanka candidates even spend government money for their victory.

WORLD CONTEST & SRI LANKAN CONTEST OF ELECTIONS

Paper cost is too high. Candidates spend government money for their

promotions such as advertisements, banners, posters. Large number of conflicts, crimes occur in the

election period. Frauds can be occurred when counting votes as the

manual system is used. There’s an unnecessary competition among

candidates. People have to afford the expenses of promotions.

WEAKNESSES OF SRI LANKAN ELECTIONS

o Government should find out some modern means of elections like digital methods.

o Rules and regulations should be implemented properly.

o People should vote for the correct candidate for the parliament.

HOW TO OVERCOME THE WEAKNESSES?