UNDERSTANDING CULTURE SOCIETY and POLITICS

SECOND QUARTER: WEEK 4

LESSON 1: Economic Institution

Economic Institution
Economic institutions provide the distribution of goods and services to the members of the
society. However, it also causes some socialization that brings about a distribution of power. It also
influences the culture and affects social stratification. It provides the distribution of goods and
services to the members of the society. However, it also causes some socialization that brings
about a distribution of power. It also influences the culture and affects social stratification.

Economic Transaction
Economic transactions could be market and non-market transactions such as reciprocity, transfer,
and redistribution. The state, through the government, comes in to regulate the prices of the service, which
technically is in the form of the wages the workers earn. Government intervention in economic institutions
is warranted to protect the interest of consumers and workers.
There are groups and organizations in the community which operate outside the support of any
state or government known as non-state institutions which include banks, corporations, cooperatives,
trade/labor unions, transnational advocacy groups, development agencies, and international organizations.
These non-state institutions develop certain services needed by members of the society for their progress.

Non-market Institutions
1. Reciprocity
It refers to non-market exchange of goods or labor ranging from direct barter to forms of gift
exchange where a return is eventually expected as in the exchange of birthday gifts.
(Example: when neighbors exchange food for labor rendered)
2. Transfer
It is a change of ownership of an asset or a movement of funds and/or assets from one account to
another.
(Example: donation or financial assistance from a richer relative and transfer payments)
3. Redistribution
It is a combination of the features of transfer and reciprocity where economic exchange involves
the collection of goods from members. Reciprocity, transfer, and redistribution are considered as
non-market transactions since they do not entail the exchange of cash for rendering of service or
provision of goods. Market transactions involve parties who sell their goods and services in exchange for
cash from consumers.

The State-Market Relationship

The state, through the government, comes in to regulate the prices of the service, which
technically is in the form of the wages the workers earn. Government intervention in economic
institutions is warranted to protect the interest of consumers and workers.
The primary instrument used by the governments to redistribute income is tax, a compulsory contribution
to government coffers, normally levied from worker’s income, business profits, and consumption of
goods and services.

LESSON 2: Non-State Institutions (Banks, Corporations and Cooperatives)

Non-state institutions
These are groups and organizations which operate outside the support of any state or government.
They are referred to as stateless since they are independent of any state although they usually collaborate
with the government in implementing projects. They assume different functions and focus on a specific
objective. In general, they develop certain services needed by members of the society for their progress.
Examples are the following:
a. Banks e. Transnational Advocacy Groups
b. Corporations f. Development Agencies
c. Cooperatives g. International Organizations
d. Trade Unions

A. Bank - a financial institution that lends money both to public or private organizations.

Functions of Banks:
1. Depository of savings
2. Issue loans to both people and companies
3. Largely responsible for the payment system

B. Corporation– a company or group of people authorized to act as a single entity and recognized as
such in law

Types of Corporations
As to their capacity to issue stocks:
1. Stock Corporations
2. Non-Stock Corporations
As to revenue:
1. Profit Corporations
2. Non-Profit Corporations

C. Cooperative- a legal entity owned and democratically controlled by its members.

Some Functions of Cooperatives:

1. They often provide quality goods and services.
2. They typically invest in local communities.
3. Membership builds social networks and strengthens social cohesion.

Non-state Institutions(Trade Unions, Transnational

LESSON 3: Advocacy Groups, Development Agencies, and International
Organization)

Trade/Labor Unions
These are organizations of workers whose main objective is to protect the welfare of its members.

Some Purpose of Labor Unions

● Negotiate wages and working condition terms
● Help settle grievances
● Raise new demands on behalf of its members

Transnational Advocacy Groups

These are fluid and open relationships among knowledgeable, committed actors like individuals
and organizations. They exist to change international policy as well as make these changes real in the
daily lives of ordinary people.

Some issues that motivate advocacies:

● Human rights 3. Women’s rights 5. International peace
● Consumer rights 4. Environmental issues

Development agencies are organizations committed to distribute aid. Aid can be subdivided into two
categories:
1. Humanitarian Aid – such as emergency relief efforts for natural disasters)
2. Development Aid - aimed at helping countries to achieve long-term sustainable economic growth
and with the aim of achieving poverty reduction)

International organizations are organizations with an international membership, scope, and presence.

Roles of International Organizations:

● help set international agenda
● mediate political bargaining provide place for political initiatives and acting as catalyst for
coalition