Political Systems

Question 1

Political Ideology

Answer 1

a set of principles, ideas, and doctrines used to organize and administer social order

Question 2

Political systems

Answer 2

the principles, laws, and procedures relating to a particular form of government

Question 3

Individualism

Answer 3

A political philosophy that prioritizes individual freedoms, rights, and liberties over the collective. It supports the idea that individual rights are best for society as long as they don’t infringe on others

Question 4

Collectivism

Answer 4

The belief that societal good should be prioritized over individual interests, often advocating for state ownership of resources and production for equitable distribution.

Question 5

Democracy:

Answer 5

Democracy: A political system where citizens participate in decision-making, typically through voting. It is often associated with individualism but can be aligned with collectivism in the form of social democracy.

Question 6

Representative Democracy

Answer 6

Representative Democracy: A form of democracy where citizens elect representatives to make decisions and govern on their behalf.

Question 7

Presidential Democracy

Answer 7

Presidential Democracy: A system of democracy where political power is divided into branches (executive, judicial, legislative) and the president is elected directly.
t.d USA og South Korea

Question 8

Parliamentary democracy

Answer 8

Parliamentary Democracy: A democratic system where the legislative branch (parliament) elects ministers to govern, rather than a president elected by popular vote.

Question 9

Social Democracy

Answer 9

Social Democracy: A system combining democracy with socialist principles, where governments are elected democratically but focus on collective welfare and regulating individualism for equal opportunities.

Question 10

Autocracy:

Answer 10

Autocracy: A political system where power is concentrated in the hands of a single ruler or small elite, often without citizen participation. Nearly 60% of governments were autocratic until the late 1980s and early 1990s.

Question 11

Totalitarianism

Answer 11

totalitarianism an extreme form of autocratic political system in which the government regulates every aspect of public and private life

Question 12

Theocratic government

Answer 12

theocratic government a form of totalitarian government in which leaders rule by a mandate from God by interpreting religious law

Question 13

Infant Industry Protection:

Answer 13

Infant Industry Protection: Friedrich List proposed protecting emerging domestic industries from foreign competition through temporary tariffs until they mature and can compete globally.

Question 14

Stages of Economic Development:

Answer 14

Stages of Economic Development: List outlined five stages for a nation’s economic development:
Savage stage
Pastoral stage
Agricultural stage
Agricultural and manufacturing stage
Agricultural, manufacturing, and commercial services stage

Question 15

Mixed Political Systems:

Answer 15

Mixed Political Systems: Most countries use a combination of political ideologies, blending elements of individualism, collectivism, democracy, and autocracy. These systems are shaped by both internal and external influences and vary by sector.

Question 16

State-Owned Enterprises (SOEs):

Answer 16

State-Owned Enterprises (SOEs): Legal entities created by governments to engage in commercial activities. SOEs are common in strategic sectors such as energy, transportation, and banking, and are designed to generate profit for the government.

Question 17

Political Sensitivity in Trade:

Answer 17

Political Sensitivity in Trade: Some industries, like Japan’s rice farming, are politically sensitive due to cultural significance and strong domestic political influence. Governments protect these industries through regulations, subsidies, and import restrictions.

Question 18

Political Risk:

Answer 18

Political Risk: The risk that political conditions in a host country may change, potentially negatively affecting foreign businesses, such as through expropriation, trade controls, or regulatory changes.

Question 19

Expropriation

Answer 19

Expropriation: A government’s seizure of privately owned assets or businesses, often with minimal compensation, typically under the guise of acting in the public interest.

Question 20

Macro Political Risk:

Answer 20

Macro Political Risk: Political actions that affect all foreign investments and operations in a country, such as expropriation, currency and trade controls, regulatory restrictions, war, terrorism, and changes in labor or tax laws.
Example: Venezuela’s extreme inflation and trade controls that forced many foreign companies out of business.

Question 21

Micro Political Risk:

Answer 21

Micro Political Risk: Political risks that affect only a specific sector, firm, or project, such as corruption, contract breaches, or environmental protests.
Example: Protests against a hydroelectric power plant in Brazil that raised construction costs.

Question 22

State-Owned Enterprises

Answer 22

State-Owned Enterprises

Example: Saudi Aramco. Saudi Arabia’s oil company.

*State owns and operates the business
*Goal is to make a profit
*Profits are returned to the government

Question 23

Partial State-Owned Enterprise

Answer 23

Example: Shanghai Disney. Joint venture between Walt Disney (43% ownership) and three companies owned by the Shanghai government (57% ownership).

*State has partial ownership of the company
*State may or may not have direct control
*Part of the profits are given to the state

Question 24

State Supported

Answer 24

Example: Tesla. Tesla has received nearly $5 billion in government incentives, grants, tax breaks, discounted loans, and environmental credits.

*State backs a company either by guaranteeing loans or directly providing resources
*State provides incentives, grants, tax breaks, subsidies
*State does not have direct control
*State often does not get direct payment rather it gets indirect benefits from job creation and growth

Question 25

State Investor (Sovereign Wealth Fund)

Answer 25

Example: Temasek Holdings Private Limited. Government of Singapore’s investment company. Owns a portfolio of investments worth nearly $200 billion.

*State buys stocks or bonds in private companies
*Fund returns the proceeds to the government
*Government reinvests or spends the proceeds

Question 26

deregulation:

Answer 26

deregulation: the process of removing government regulations, oversight, and involvement from an industry