International Business Lecture No,12 By Dr.Shahzad Ansar

States in Transition Two Trends Democratic Revolutions Decline in Centrally Planned and Mixed Economies

Spread of Democracy Why? economic progress to the vast bulk of their 1. Totalitarian regimes failed to deliver economic progress to the vast bulk of their populations. 2. New information and communications technologies, Internet, have broken down the ability of the state to control access to uncensored information.

Spread of Democracy have led to the emergence of increasingly Economic advances of the last quarter century have led to the emergence of increasingly prosperous middle and working classes who have pushed for democratic reforms.

FRANCIS FUKUYAMA & his Ideology

The future is in favor of Western liberal democracy The future is in favor of Western liberal democracy. There will be an end of mankind's ideological evolution

Samuel Huntington & his Ideology

Clash of Civilizations There is no “universal” civilization based on widespread acceptance of Western liberal democratic ideals.

The spread of Market-Based Systems Shift Centrally Planned Economies Mixed Market – Based

The Nature of Economic Transformation The shift to market-based economies entails: Deregulation Removal of legal restrictions to free markets. Privatization Transfer of state ownership of property into private hands. Legal Systems Creation of systems to protect property rights.

Implications for Business Risks Political Economic Legal Ethics Human rights Regulations Corruption Foreign Corrupt Practices Act Attractiveness Benefits First-mover advantages Late-mover disadvantages Costs