We live in a world of intensifying global relationships, one in which international business has become the key determinant of economic development and prosperity. This course, Global Business Environment, Part I, introduces students to a fundamental understanding of the socioeconomic political, cultural, and linguistic environment in which international businesses operate. This course utilizes an inquiry-based approach to understanding country level relationships in the Global Business Environment. It surveys the global business environment by asking and answering key questions about society, the global economy, cultures, institutions and languages. The questions we will ask are: 1. What is Globalization?, 2. Is Globalization New?, 3. How do Political and Social Institutions impact National Economic Development?, 4. What is the role of Culture?, 5. What are the Gains from Trade?6. Free Trade, Free-r Trade or Managed Trade?, 7. What are Foreign Currencies and how are Exchange Rates Determined?, 8. What does the Current Global Business Environment look like? This inquiry-based approach creates reflective opportunities for students to better understand the environment in which businesses operate. Lectures are delivered in an engaging manner, which encourages reflection and inquiry.
Module 3, Part 3
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Do curso por University of New Mexico
International Business I
563 classificações
Na lição
Week 3
How do Political and Social Institutions impact National Economic Development?
Conheça os instrutores
Doug E Thomas, Ph.D.Professor
International Management, Anderson School of Management
Welcome back.
This will be the third lecture in module three.
We're looking at economic development, economic wealth, and
we've got this key question we're trying to answer.
Last time we looked at education.
We've also looked at natural resources.
And we've kind of critically examined each of those factors and
determined that they're not sufficient for a guaranteed model for
economic development, unfortunately.
We still don't have that answer which we know ultimately won't exist.
Today, we are going to look at another factor which is a very common answer.
Many students when they reflect on this,
when they think about it, they start to wonder if the political system or
the form of government has anything to do with economic success.
And so let's examine that for a few minutes and see if that plays out.
We've got our list of countries, and we've got GDP per capita.
And as we look at this, there's again, quite a bit of diversity across
the top set of countries and their forms of government.
And I'll try to illustrate that by bringing you over to a map of the world,
and a color highlighted way of depicting forms of government across the world.
Now, there are lots of ways of defining forms of government, and
this is just one source, and one way of looking at it.
There are probably finer definitions we could come up with.
But the way that this that this particular map divides countries across
the world is into democratic governments with established multiparty systems,
with the green.
The light green is a democratic government with a recently established multiparty
system, and we see several countries around the world with that light green.
The yellow is a one party system where there's no political competition,
that's what's implied.
There's some countries in the world that have military governments.
There are other countries that are governed by monarchy or
theocracy where it's either royalty or a religious based government in charge.
And there are some states that are disordered,
that have that are perhaps involved in civil war or
determining the way that they're going to govern their affairs.
And so, as you look at this map, you may start to try to see some correlations.
For example we see in much of western Europe and Scandinavia a number of
countries that are green, that have this democratic form of government.
And that have multi multiparty systems which implies competition.
We see much of North America and South America in that same position.
Does that correlate with our list?
Do we see the same differentiation?
Well, Luxembourg Norway, Switzerland Denmark, Sweden,
the United States, Canada, are all in that.
Austria, are all in that western European and
North American those North American regions.
We also see Australia, if you look back, was a country that had a multiparty
system representative form of government with elections.
We see other countries like India,
with great economic growth rates with this multiparty system.
Now what about [NOISE] what about some of the smaller mid,
Middle Eastern nations like Qatar and Kuwait?
While they may not have multiparty systems of government, they do and
they're too small to really be depicted here.
They're here in the Middle East but they do not have multiparty systems.
They have one party systems in some cases.
In other cases military governments, and some of the other nations that are in that
region of the world have monarchies or theocracies, and they're still wealthy.
So, so far, we haven't been able to come up with one particular form of government
that seems to be correlated with success, economic success.
Some people will point very quickly to China and
note that it's a one party system.
And while China may not be at the top of the list currently in terms of its
current GDP per capita, we do know that it is growing very rapidly.
And this growth we recognize and
everyone around the world has observed over the last few years.
And you have to ask yourself, is it the case that you must have a democratic
multiparty system form of government in order to be wealthy?
Well, at least for now, it doesn't appear to be the case that China
has needed that form of government in order to experience this growth.
Now, that may may change over time, and that may not be what we would want to
see if, if you're an individual who's in favor of democratic form of government.
But we, we have to look at the facts and accept what we find.
Other research does seem to indicate that over time, political freedom or
the ability to express.
The ci, ci, the citizen's ability to express their
political power through a vote does seem to have some correlation
over time with economic freedom and economic wealth development.
So it's probably best to say that it's inconclusive to,
to determine that the political system is, is the, the answer to the question.
In other words, you can't simply establish a democracy and
expect a country to become wealthy overnight.
It just doesn't work that way.
It takes time.
For example, we'll look at the former Soviet Republics
which very quickly adopted democratic systems of government.
But over time, they have not experienced the wealth creation that China has.
How do we explain that?
People also point to the Scandinavian nations and
say that well, despite the fact that they have multiparty systems,
they have als, they also have very high tax rates.
Which are usually correlated with what we call more social forms of
governing the economy.
So it can't be the case that those countries are it's,
it's necessary for those countries to have a completely open low tax rate
form of government in order to be wealthy.
There is just too much diversity across nations to explain in a very simple
manner, the development of wealth over time by the form of political government.
That is the third explanation we provided here in this third lecture
to the question why some countries are richer than others.
We've looked at natural resources, we've looked at education, and
we looked at political institutions.
We'll close this lecture looking next time to another factor,
property rights, to try to understand the wealth of nations.
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