National Differences in Political Economy Essay

1283 Words Nov 12th, 2011 6 Pages
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National Differences in Political Economy

Global Political Economy
Global political economy (GPE) is an academic discipline within the social sciences that analyzes international relations in combination with political economy. Political economy is most commonly used to refer to interdisciplinary studies that draw on economics, law, and political science in order to explain how political institutions, the political environment, and the economics mix with each other.

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Roles of History and Culture

Political Economy

•Three systems interact and influence each other •Change in one system often impacts the other systems

Political System

Economic System

Legal System

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Political Economy
Political System
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ferent ends of a continuum with many shades of gray in between

BERLIN WALL

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Business in Totalitarian Nations

Risk Factors
• Arbitrary nature of business can mean that laws are vague or do not exist • Bureaucrats may interpret laws however they wish

Property Seizure
Confiscation
Forced transfer of assets from a company to the government without compensation

Expropriation
Forced transfer of assets from a company to the government with compensation

Nationalization
Forced asset transfer to the government of an entire industry

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Political Economy
Political System

Economic System

Legal System

Economic Systems
Political ideology and economic systems are interrelated

- countries where individual goals are given primacy over collective goals, it is more likely to find free market economic systems

- countries where collective goals are given primacy over individual goals, it is more likely to find state control of economic markets and enterprises

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Types of Economic Systems
Market Economy Command Economy Mixed Economy

Market Economy
All productive activities are privately owned What is produced (and quantity) is determined by the interaction of supply and demand and signaled to producers through a price system Consumers are sovereign Government encourages vigorous competition

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Command Economy
All businesses are state owned What is produced, the quantity and price of all goods and services is planned by the

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