02-National Differences in Political Economy分析和总结分析和总结.docxVIP

National Differences in Political Economy This chapter has reviewed how the political, economic, and legal systems of different countries vary. The potential benefits, costs, and risks of doing business in a country are a function of its political, economic, and legal systems. More specifically: Political systems can be assessed according to two dimensions: the degree to which they emphasize collectivism as opposed to individualism, and the degree to which they are democratic or totalitarian. Collectivism is an ideology that views the needs of society as being more important than the needs of the individual. Collectivism translates into an advocacy for state intervention in economic activity and, in the case of communism, a totalitarian dictatorship. Individualism is an ideology that is built on an emphasis of the primacy of individuals freedoms in the political, economic, and cultural realms. Individualism translates into an advocacy for democratic ideals and free market economics. Democracy and totalitarianism are at different ends of the political spectrum. In a representative democracy, citizens periodically elect individuals to represent them and political freedoms are guaranteed by a constitution. In a totalitarian state, political power is monopolized by a party, group, or individual, and basic political freedoms are denied to citizens of the state. There are four broad types of economic systems: a market economy, a command economy, a mixed economy, and a state-directed economy. In a market economy, prices are free of controls and private ownership is predominant. In a command economy, prices are set by central planners, productive assets are owned by the state, and private ownership is forbidden. A mixed economy has elements of both a market economy and a command economy. A state-directed economy is one in which the state plays a significant role in directing the investment activities of private enterprise through industrial policy and in otherwise regulatin