Chapter 2. The border between Belgium and the Netherlands (in a café) National Differences in Political, Economic, and Legal Systems

Transcription

1 Chapter 2 The border between Belgium and the Netherlands (in a café) National Differences in Political, Economic, and Legal Systems

2 How The Rest of the World Lives FILM - What are your thoughts Pros of this approach Cons

3 Systems - Interdependent Interact and influence each other, and Affect the level of economic well-being Political Legal Economic

4 Political System Dimensions Political System System of government in a nation Assessed Across 2 Dimensions: Collectivism vs. Individualism Democratic vs. Totalitarian

5 Collectivism Collectivism collective goals over individual goals Today is equated with socialists Socialists State ownership of production, distribution, and exchange managed to benefit society (not individuals)

6 Collectivism - Socialism Splits In the early 20 th century, socialism split into: Communism Socialism can only be achieved through violent revolution and totalitarian dictatorship Social democrats Socialism is achieved through democratic means

7 Individualism Individualism An individual should have freedom in his own economic and political pursuits Traced to Greek philosopher, Aristotle ( BC) individual diversity and private ownership are desirable Economic and political freedoms Democratic political systems Free market economies

8 Individualism - Democracy Democracy Government is by the people, exercised either directly or through elected representatives Associated with Individualism Pure democracy belief that citizens be directly involved in decision making Representative democracy Citizens periodically elect individuals to represent them

9 Totalitarian Totalitarianism One person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties Associated with collectivism

10 Totalitarian There are four major forms of totalitarianism: 1. Communist totalitarianism found in states where the communist party monopolizes power (China) 2. Theocratic totalitarianism - found in states where political power is monopolized by a party, group, or individual that governs according to religious principle (Iran)

11 Totalitarian There are four major forms of totalitarianism: 3. Tribal totalitarianism - found in states where a political party that represents the interests of a particular tribe monopolizes power (Africa) 4. Right-wing totalitarianism - permits some individual economic freedom, but restricts individual political freedom (Nazi)

12 Political Systems While watching the film, write: 1. Describe each of the 6 political systems (anarchy, libertarianism, etc.) 2. Which do you believe is the best? FILM (12 min) Discuss in small groups respectfully

13 Countries in Transition There may be several alternatives as change comes to a country s political system

14 Economic Systems Market Economy Command Economy Mixed Economy No country is PURE market economy Supply and Demand determines production Competition encouraged by government Most sectors are primarily privately owned U.S.

15 Economic Systems Market Economy Command Economy Government plans what is produced, quantities and prices State-owned businesses Government allocates resources for the good of society No incentive to control costs Tend to stagnate over time e.g., North Korea Mixed Economy

16 Economic Systems Market Economy Command Economy Mixed Economy Certain sectors - private ownership and free market mechanisms Other sectors - significant state ownership and government planning Governments own firms considered important to national security too big to fail France; (US temp. GM, AIG...)

17 Legal Systems Three Types 1. Common law - based on tradition, precedent, and custom contracts are detailed with contingencies covered 2. Civic law - based on detailed set of laws organized into codes contracts are shorter/ less specific because of detailed laws 3. Theocratic law - law is based on religious teachings

18 Property Rights And Corruption The Foreign Corrupt Practices Act makes it illegal for U.S. companies to bribe foreign government officials to obtain or maintain business over which that foreign official has authority The Organisation for Economic Cooperation and Development (OECD) has also adopted a convention to make the bribery of foreign public officials a criminal offense

19 Corruption - Subsidies Subsidies given to companies (cronyism) Subsidies in the U.S. Subsidies in China Many more around the world. Which countries are the worst?

20 Property Rights & Corruption are Related Property rights can be violated: 1. Private action theft, piracy 2. Public action - A. legally - ex. excessive taxation (extorting income) or B. illegally - ex. bribes or blackmailing High levels of corruption reduce foreign direct investment, the level of international trade, and the economic growth rate in a country

21 Country Corruption Rankings: 2016 Source:

22 Which Countries Are Most Corrupt? Rankings of Corruption by Country 2014

23 Protect Intellectual Property Rights (IPR) Patents exclusive rights for a defined period to the manufacture, use, or sale of that invention Copyrights the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit Trademarks design and names by which merchants or manufacturers designate and differentiate their products

24 How Can Intellectual Property Be Protected? Protection of intellectual property rights differs from country to country World Intellectual Property Organization Paris Convention for the Protection of Industrial Property To avoid piracy, firms can stay away from countries where intellectual property laws are lax file lawsuits lobby governments for international property rights agreements and enforcement

25 What Is Product Safety And Liability? Product safety laws set certain 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 liability laws tend to be less extensive in less developed nations

26 Let s Get to Work. You think you work hard??? US - Average workload is weeks/year Which do you think are the 10 Hardest Working Nations? FILM #1:Mexico averages over wks/yr

27 Where to call home? If you could relocate to any country in the world, other than the U.S., to where would you move? Why? Is your answer the same as last time? Did our discussion peak your interest to visit a country? Where would you like to go? To make an informed choice (personal and business) we might like to look at: Political Economic Legal