1.5 Summary: Part B
In Part B we defined political economy and noted that the three major elements in a political economy are the political system, the economic system and the legal system.
Political systems are based on either collectivism or individualism and they may be democratic or totalitarian. Economic systems may be of the free market type or a command economy. There are few 'pure' economies: most are mixed economies, a few are state-directed economies.
Legal systems vary widely, but international businesses are concerned with the way legal systems deal with property rights (including intellectual property), product safety and liability, and contracts.
The determinants of a country's ability to grow economically include its natural resources (including people), its geography and history, and whether its political system is democratic and has a market economy.
Finally, we noted many facets of the changing global business environment. The most significant of these are probably the spread of democracy and market economies and the ramifications of new technology.
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