Chapter 10: Differences in Political and Legal Systems Around the Globe and Their Impacts on International Trade

10.1 What Is a Political System?

A political system is a set of different formal legal institutions that constitute a government. In other words, a political system is the system of government in a nation (Hill, 2022).

The political system of a country has a direct influence on the economic development of a country and shapes its legal and economic systems. Therefore, we need to understand the structure of different political systems before discussing legal and economic systems and the economic development of countries.

Types of Political Systems

Political systems around the world can be divided into 2 prominent categories: democracy and totalitarianism.

Democracy

Democracy is a type of political system where people govern themselves. The word democracy comes from Greek, and it means “rule of the people.” In a democratic political system, people are involved in the decision-making process, either directly — direct (pure) democracy or through a representative — representative (indirect) democracy.

In a direct (pure) form of democracy, people make their own decisions about policies and issues that affect them directly. This form of democracy was practiced by several city-states in ancient Greece. These days, this form of democracy is only practiced in Switzerland. Citizens in Switzerland can have their say directly on decisions at all political levels.

All other modern societies practice the representative (indirect) form of democracy. This form of democracy is more efficient, where a single official represents a large number of the population based on a city, a region, or a state. People elect officials to represent them in legislative bodies and to vote on policies and issues on their behalf. If elected representatives fail to reflect the will of the people and perform their duties adequately, people will vote them out of office, and that is possible due to periodic elections. In a democratic system, political freedom is guaranteed by a constitution.

Representative democracy is becoming a more widely acceptable form of government globally and most countries are forming their government based on this form. Governments in North America, Western and Northern Europe, some Eastern European, South American, and South Asian countries have adopted representative democracies as a form of government (Desilver, 2019).

Totalitarianism

In this type of political system, the state controls all aspects of a society and takes away individual rights and freedom for the benefit of the state (Longley, 2022).

There are many forms of totalitarianism around the globe today. The most popular and widespread form of totalitarianism is communist totalitarianism. Communism is in decline, however, and many of the communist states in Eastern Europe and the Soviet Union collapsed around the 1990s. Some of the countries that are still run by communist parties around the world are China, Vietnam, Laos, North Korea, and Cuba (Hill, 2022).

Another major form of totalitarianism can be described as right-wing totalitarianism (fascism). This form of totalitarianism gives individuals some freedom in economic aspects because it can be controlled but restricts their political freedom to prevent the rise of social movements such as socialism or communism. (Longley, 2022). The main common characteristics of totalitarian systems are single-party rule and an ideology that dictates all aspects of societal life.

Review: Political Systems

Review your understanding different political systems by reading “Types of Political Systems” in Introduction to Sociology: Understanding and Changing the Social World (published by University of Minnesota Libraries).

Main Institutions of Government

 There are three main institutions in the modern state: the executive, the legislature, and the judiciary.

The legislature passes laws, the executive implements those laws, and the judiciary interprets them and ensures that they are in accordance with the constitution of the country.

In the United States, for example, the legislature, the United States Congress and the Senate, act as a check on the executive, the United States government, and the judiciary is the final court of appeal.

When the Health Care Reform law was ratified by Congress and then contested legally by the Senate, it was brought to the Supreme Court, where the court ruled that the law was constitutional.

In Canada, Parliament is the federal legislature. It includes the Monarch, who is represented by the Governor General, and the two houses of Parliament — the Senate and the House of Commons (Parliament of Canada, n.d.). The executive branch is composed of the monarch (or the Governor General), the prime minister and the cabinet. The judicial branch is made up of a system of courts (supreme court, federal court, provincial and territorial courts). In Canada, the judicial branch is independent of the legislative and executive branches.

The dynamics between the three institutions are what determines the conduct of the nation. In a perfect world, each one of these institutions will operate within their assigned work boundaries and avoid exerting influence on each other. Upholding and protecting the constitution must be the ultimate goal for all three institutions.

The degree to which the three main government institutions are adaptable, protect the constitution and stay within their boundaries of responsibilities can determine the stability of a political system.


References

Desilver, D. (2019, May 14). Despite global concerns about democracy, more than half of countries are democratic. Pew Research Center. https://www.pewresearch.org/short-reads/2019/05/14/more-than-half-of-countries-are-democratic/

Hill, C.W.L. (2022). International business: Competing in the global marketplace (14th ed.). McGraw Hill.

Longley, R. (2022, October 01). What is totalitarianism? Definition and examples. ThoughtCo. https://www.thoughtco.com/totalitarianism-definition-and-examples-5083506

Parliament of Canada. (n.d.). The branches of government. https://learn.parl.ca/understanding-comprendre/en/canada-system-of-government/the-branches-of-government/


Attributions

“Types of Political Systems” includes material from “Types of Political Systems” from Introduction to Sociology: Understanding and Changing the Social World by University of Minnesota, licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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International Trade and Finance, Part 2 Copyright © 2024 by Dina Majid is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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