National Differences in Political Economy Political system (system of government in a nation) Economic system Legal system (the rules, or laws, that regulate behavior along with the processes)The determinants of economic development States in transition The nature of economic transition Implications of changing political economy for manager Collectivism stresses the primacy of collective goals over individual goals Socialism + Advocated state ownership + The state then manages the enterprises fo.
Collectivism: stresses the primacy of collective goals over individual goals Socialism: + Advocated state ownership + The state then manages the enterprises for the benefit of society Communists: could only be achieved though revolution and totalitarian dictatorship Social democrats : achieve the same goals by democratic means Just as the potential gains are large, so are the risks of changing political economy Political system (system of government in a nation) Markets that were formerly off-limits to Western business are now open Benefits (size of economy, likely economic growth) Cost (Corruption, lack of infrastructure, legal costs) Individualism:stresses that the interests of the individual should take precedence over the interests of the state Implications Overal attractiveness of a country Democracy: government is by the people, exercised either directly or through elected representatives for manager Risks ( political, legal and econimic risks) Totalitarianism: a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties Deregulation involves removing legal restrictions to the free play of markets, establishing private enterprises, and operating private enterprises in different ways Privatization transfers the ownership of state property into the hands of private individuals, frequently by the sale of state assets through an auction Market economy: + The goods and services is determined by supply and demand + The government encourage free and fair competition The nature of economic transition Legal system protecting private property rights and providing mechanisms for contract enforcemen Economic system National Differences in Political Economy The spread of demoracy Political Economy Command economy: + The goods and services are all planned by the government + All businesses are state owned Mixed economy Different legal systems: + Common law is based on tradition, precedent, and custom + A civil law system is based on a detailed set of laws organized into codes + A theocratic law system is one in which the law is based on religious teachings The spread of market- based systems The end of the Cold War and the “new world order" have given rise to intense speculation about the future shape of global geopolitics States in transition In a common law state, contracts are very detailed Contract law GNI, PPP, HDI, In a contract dispute, CIGS should apply Innovation and Entrepreneurship: + is the nature of the relationship between political economy and economic progress + are the Engines of Growth + Require a Market Economy + Require Strong Property Rights Private action Property rights are violate Public action The determinants of economic development Legal system (the rules, or laws, that regulate behavior along with the processes) A patent grants the inventor of a new product or process Geography can influence economic policy, and hence economic growth rates Intellectual property Nations that invest more in education will have higher growth rates because an educated population is a more productive population In a civil law state, contracts are shorter and much less specific Copyrights are the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work Trademarks are designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products Product safety laws set certain safety standards to which a product must adhere Product liability involves holding a firm and its officers responsible when a product causes injury, death, or damage