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What Is the Benefit of Formal, Rule-Based, Impersonal Exchange with Third-Party

Question 71

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What is the benefit of formal, rule-based, impersonal exchange with third-party enforcement (often termed arm's-length transaction) versus informal institutions? Why can't we assume that formal institutions are inherently better than informal ones? How do formal and informal institutions complement each other?

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As the economy expands, the scale and sc...

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