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Tutor profile: Georgios A.

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Georgios A.
Berkeley Grad Student
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Questions

Subject: Economics

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Question:

Please explain the tragedy of the commons using the example of a pasture land and discuss the benefits and drawbacks of privatization to solve the tragedy. Is privatization an efficient solution? Is it equitable? What are some alternatives and what their relative benefits?

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Georgios A.
Answer:

The tragedy of the commons arises for common goods. Those are resources that are non-excludable and rival. That means they are accessible to everyone and subject to depletion. An example would be a village’s unfenced pasture lands used for grazing livestock. All village residents have access to the pasture lands to raise their livestock there. Yet, the pasture lands can only support a finite number of livestock in a given time period. If this quantity is exceeded, the overgrazing would be unsustainable and not able to support any livestock in the future with devastating consequences for the village economy. In the absence of any coordination or enforcement, private livestock producers have the incentive to raise as much livestock as they can without considering the total amount of livestock produced to maximize their private profit since the social costs of the resulting degradation are not internalized (that is are not borne exclusively by the private producer) but are instead externalized, that is they are borne by all of the produces. This will often lead to resource depletion and environmental degradation. One possible solution is privatization. If the pastures are privatized, they become a private good as they are now excludable. The owner of the pasture now has the incentive to maintain a sustainable livestock since the costs of not doing so are fully internalized. In other words, since the owner will need the pastures to gain revenue in the future, they have an incentive to not fully deplete them. The downside of privatization is that, although efficient, it is often inequitable, as it leads to land and wealth inequities and forces previously independent producers to either pay rent to land owners or become laborers, potentially reducing their income. A more equitable solution then is a communal approach. The village could come together and form a democratic council that will set rules and quotas for the pasture lands. Many traditional societies have successfully managed pastures this way, with older members often taking the role of the enforcer and conflict mediator. This approach ensures that the pastures are not only managed sustainably but also equitably as everyone maintains equal access to the lands, often according to their needs.

Subject: Econometrics

TutorMe
Question:

A policy-maker wants to evaluate a traffic restriction rule aimed at reducing congestion and pollution in a specific downtown area. To do so he creates a regression analysis that correlates pollution in an area with whether or not that area is inside the restriction or not. Is this methodology appropriate? Does the resulting correlation indicate causality? If not, what could be some better alternative methodologies?

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Georgios A.
Answer:

This methodology is not appropriate as the resulting correlation does not infer causality as it does not account for pre-existing trends that could differ between the treatment and the control group. For example, a neighborhood downtown might be seeing an annual increase in traffic due to increased tourist arrivals while suburban residential neighborhoods might be unaffected by tourism. These differing trends will confound the regression leading to an underestimation of the treatment’s effect in reducing pollution. To account for such divergent trends between treatment and control, the differences-in-differences methodology should be employed. In this study design, the regression examines the difference in a specific outcome (pollution) between a treatment group (downtown) and a control group (suburbs) before and after the treatment. If the DD assumptions hold, then the change in the difference between treatment and control estimates the treatment’s effect. The key assumption is that the pre-treatment trends have remained the same post-treatment. If that is true, then the difference in the difference between treatment and control groups should be the result of the treatment. In other words, if the difference in pollution concentrations in the suburbs from pollution concentration in the downtown restriction area has changed, then the restriction was effective in lowering emissions.

Subject: Comparative Government and Politics

TutorMe
Question:

Electoral systems range from fully proportional representation to weighed proportional representation to single-member districts. Please explain the trade-offs between fully democratic, proportional systems, and less representative systems such as single-member districts using the comparative method. What are the benefits and downsides of each?

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Georgios A.
Answer:

The electoral system of a country can be seen as a trade-off between fully accurate representation and electoral stability. In general, the more proportional and representative the electoral system is, the more difficult it is to form a government, making it also more unstable. This is demonstrated clearly by the cases of the Netherlands, Belgium and the UK. Useful insights also arise by examining the German Weimar Republic and the rise of Nazism. The Dutch electoral system is one of full proportional representation in which parliamentary seats in multi-member districts are distributed proportionally to the votes received by each party. Thus, a party that receives 10% of the vote will get 10% of the seats in that district and so on and so forth. This makes voting for smaller parties viable since even receiving a small fraction of the votes can lead to representation. The system then results in a multi-party system in which no party has the required majority to govern. Thus, a government needs to be a coalition of multiple (often 4 or 5) parties which have to agree on a common agenda and cabinet. This means that voter views are represented more accurately as voters have a variety of viable parties to choose from (some parties have as few as 1 or 2 seats in parliament). It is, therefore, a more democratic system where more views are represented and with lower access barriers for new parties which often arise and win seats in parliaments and even government cabinet positions. The downside of this system is its instability since small parties with single digit percentages can single-handedly overthrow the government and cause new elections. Deciding on a new government often takes months. For example, after the latest Dutch elections in March 2021, the coalition government was not formed until June 2021, while Belgium, which also features full Proportional Representation had remained without a government for over a year while parties attempted to negotiate a coalition! This instability can be dangerous for democracy. As history has shown, prolonged periods of short-lived governments, frequent elections, and inconclusive coalition talks, have often resulted in economic recession, political violence, and even military dictatorships. The Weimar Republic’s instability was to a large extent due to its fully proportional electoral system. The system’s inefficiency created public discontent with democracy and gave rise to the authoritarian Nazi party. The resulting inability of mainstream parties to form a successful coalition due to lacking enough seats, led them to inviting the Nazis to their coalition government, which proved fatal for the democratic regime. On the other extreme end of this range are single-member district (SMD) systems, such as the UK’s electoral system. In these systems, parliamentary districts only have one seat and are awarded to the party that concentrates the most votes in that district. This makes smaller parties much less viable because, unless they can win a significant proportion of votes in a district, voting for them would not result in any representation. The system thus encourages voters to prefer larger parties resulting in a parliament largely dominated by two parties and in single-party government cabinets. These “lesser of two evils” systems are less democratic, with smaller parties usually receiving more votes than seats, and larger “establishment” parties governing alone in rotation. However, the system is also much more stable as governing does not require lengthy and complex multi-party coalitions. Parties get elected with an agenda ready to govern and do not need to negotiate with parties that hold very divergent and incompatible ideologies. Elections are also less frequent since for a government to fall it needs to be voted out by some of its own members of parliament which is more rare.

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