INB-372 Lecture #3 & 4 National Differences in Political Economy

8/19/2019 INB-372 Lecture #3 & 4 National Differences in Political Economy

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Chapter 2

National Differencesin Political Economy


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WHAT IS A POLITICAL ECONOMY?

Political economy of a nation - how thepolitical, economic, and legal systems of acountry are interdependent

they interact and influence each otherthey affect the level of economic well-being inthe nation


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WHAT IS A POLITICAL SYSTEM?

Political system - the system ofgovernment in a nation

Assessed according tothe degree to which the country emphasizescollectivism as opposed to individualismthe degree to which the country is democraticor totalitarian


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WHAT IS A POLITICAL SYSTEM?

Collectivism stresses the primacy of collectivegoals over individual goalsIndividualism – an individual should havefreedom in his own economic and politicalpursuitsDemocracy - government is by the people,exercised either directly or through electedrepresentatives

Totalitarianism - one person or political partyexercises absolute control over all spheres ofhuman life and prohibits opposing politicalparties


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POLITIC L SYSTEMS

Collectivism:Refers to an ideology that stresses the

collective goals. The system values ‘the good the society’ rather than individual welfare.Individual rights should be sacrificed and

property should be owned in common.Advocated by Plato in the “Republic”.


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Communists:Socialism is achieved through violent

revolution.Social Democrats:

Socialism is achieved through democraticmeans.

TWO PPRO CHES


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IndividualismOpposite of Collectivism.Refers to an ideology that stresses the interest of the

individual more than the interest of the state or the sociehe ideology is free market economy.

Everybody will take care of his private property and th

be most productive rather than being inefficient. So, as awhole, state will progress.Adam Smith 1723-1790)Embodied in the U.S. Declaration of Independence.

POLITIC L SYSTEMS


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Democracy•

Government by the people, exercised either directlythrough elected representatives.Totalitarianism

•

Government in which one person or political partyexercises absolute control over all spheres of human liand opposing political parties are prohibited.

TWO PPRO CHES


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DEMOCR CY

This refers to a political system in which government is bypeople.In Ancient Greece, citizens were directly involved decision-making.Now, most modern democratic states practice representatdemocracy.

Here citizens periodically elect individuals to represent thePeople elect the representatives, who combined forms

government.These representatives function on behalf of people.This system is inspired by the philosophy of individualism.It allows both economic and political freedom.


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TOT LIT RI NISM

One person/party exercises absolute control over allspheres of human life competing political parties arebanned)

This is a form of government in which one person or politicaparty exercises absolute control over all spheres of human lifand opposition party is prohibited.This system is inspired by the philosophy of collectivism.

The characteristics of democracy are absent.Communist totalitarianism Theocratic totalitarianism Tribal totalitarianism

Right wing totalitarianism


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COMMUNIST TOT LIT RI NISM

Advocates that socialism can beachieved only through totalitariandictatorship.Has been in decline worldwidesince 1989.Communist Totalitarian statesdeny many basic civil liberties totheir populations .

Exceptions to this trend are China,Vietnam, Laos, North Korea, andCuba.

http://www.crwflags.com/fotw/images/c/cu.gifhttp://www.crwflags.com/fotw/images/c/cn.gif


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THEOCR TIC TOT LIT RI NISM

Found in states where politicalpower is monopolized by a partygroup, or individual that governaccording to religious principlesMost common form of theocrat

totalitarianism is based on IslamState limits freedom of political

and religious expression while thlaws of the state are based on

Islamic principles .


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TRIB L TOT LIT RI NISM

Tribal totalitarianism occurs when apolitical party that represents theinterests of a particular tribe and not

always the majority tribe) monopolizpower.Tribal totalitarianism has arisen fromtime to time in African countries suchas Zimbabwe, Tanzania, Uganda, andKenya


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RIGHT WING TOT LIT RI NISM

Generally permits some individualeconomic freedom but restrictsindividual political freedom,frequently on the grounds that itwould lead to the rise of communismMany right-wing totalitariangovernments are backed by themilitary, and in some cases thegovernment may be made up ofmilitary officers

E.g. before 80s South Korea,Taiwan, Singapore, Indonesia andthe Philippines were right-wingtotalitarianism.

Since the early 1980s this form ofgovernment has been in retreat


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ECONOMIC SYSTEMS

There are three types of economic systemsMarket economyCommand economyMixed economy

Collectivism __________ Middle Point _______IndividualismCommand economy) Mixed economy) Market econom


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WHAT IS AN ECONOMIC SYSTEM?

There are three types of economic systems1. Market economies - all productive activities are

privately owned and production is determined bythe interaction of supply and demand

2. Command economies - government plans thegoods and services that a country produces, thequantity that is produced, and the prices as whichthey are sold

3. Mixed economies - certain sectors of theeconomy are left to private ownership and freemarket mechanisms while other sectors havesignificant state ownership and governmentplanning


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BROADER CONCEPTIONS OF

DEVELOPMENT: AMARTYA SEN

Development should be measured less by materoutput, such as GNP, per capita and measured

more by the capabilities and opportunities thatpeople enjoy.Human Development Index HDI) measures

quality of life in different nationsBased on life expectancy, educational attainmen

and average incomes


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WHAT IS A LEGAL SYSTEM?

Legal system - the rules that regulate behavioralong with the processes by which the laws areenforced and through which redress forgrievances is obtained

the system in a country is influenced by theprevailing political system

Legal systems are important for businessbecause they

define how business transactions are executedidentify the rights and obligations of parties involvedin business transactions


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WHAT IS A LEGAL SYSTEM?

There are three types of legal systems1. Common law - based on tradition,

precedent, and custom

2. Civic law - based on detailed set of lawsorganized into codes3. Theocratic law - law is based on religious

teachings


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THEOCR TIC L W

Based upon religious teachings.Islamic law is the most widely

practiced theocratic legal system inthe modern world, although bothHindu and Jewish law are still

practiced.Based upon moral behavior.


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WHICH COUNTRIES ARE

MOST CORRUPT?

Rankings of Corruption by Country 2010


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HOW CAN INTELLECTUAL

PROPERTY BE PROTECTED?

Intellectual property - property that is theproduct of intellectual activity

Can be protected using

1. Patents – exclusive rights for a defined period to themanufacture, use, or sale of that invention

2. Copyrights – the exclusive legal rights of authors,composers, playwrights, artists, and publishers to

publish and disperse their work as they see fit3. Trademarks – design and names by which

merchants or manufacturers designate anddifferentiate their products


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WHAT IS PRODUCT SAFETY

AND LIABILITY?

Product safety laws set certain standards towhich a product must adhereProduct liability involves holding a firm and its

officers responsible when a product causesinjury, death, or damage

liability laws tend to be less extensive in less

developed nations

INB-372 Lecture #3 & 4 National Differences in Political Economy

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