ABSTRACT
In every society, economic activity is organized via a network of institutions that makes it possible to specialize and to cooperate in production and exchange, and thus to solve the economic problem of allocating scarce resources among com peting needs. This problem has an efficiency dimension concerned with stretch ing resources as far as possible and a social priorities dimension concerned with deciding what mix of goods to produce and how to distribute them. In all cases, there are many more potential needs for a nation’s resources than they can possibly be made to serve. Therefore, choices are necessary, and the nature of a society’s institutions plays a major role in determining how these choices are made.
