8 Legal systems Rules – Laws – Regulation of behaviourProcesses by which laws are enforced and grievances are resolved Three main types of legal systems – used worldwide: Common Law Civil Law Theocratic Law A country`s legal system is of paramount importance for international affairs. A country`s laws regulate business practices, define how business transactions are to be conducted, and determine the rights and obligations of those involved in business transactions. Like the economic system of a country, the legal system is influenced by the dominant political system (although it is also strongly influenced by historical tradition). A country`s government sets the legal framework within which companies do business – and often the laws governing business reflect the dominant political ideology of those in power. 19 Differences in economic development: gross national productGNI and PPP data paint a static picture of development. They tell us, for example, that China is much poorer than the United States, but they do not tell us whether China is closing the gap. To judge this, we need to look at the rates of economic growth achieved by countries. Although countries like China and India are currently very poor, their economies are growing faster than those of many developed countries. Thus, over time, they can become advanced nations and be huge markets for the products of international companies.

(Map 2.3 – Growth of Gross National Product, p. 63). The PPP card can be found on page 62 of the manual. 27 The New World Order and Global TerrorismThe resurgence of Islam is both a product and an attempt to take charge of modernization. The underlying causes are those that are generally responsible for indigenization trends in non-Western societies: urbanization, social mobilization, rising literacy and education levels, increased communication and media consumption, and increased interaction with Western and other cultures. These developments undermine traditional ties between villages and clans, creating alienation and identity crisis. Islamist symbols, commitments and beliefs address these psychological needs and Islamist charities address the social, cultural and economic needs of Muslims trapped in the modernization process. Muslims feel the need to return to Islamic ideas, practices and institutions to provide the compass and engine of modernization. Huntington. The clash of civilizations and the reshaping of the world order. New York: Simon & Schuster, 1996.

Unlike Fukuyama, Huntington sees a world divided into different civilizations, each with its own value systems and ideologies. In addition to Western civilization, Huntington predicted the emergence of strong Islamic and Sinian (Chinese) civilizations, as well as civilizations based on Japan, Africa, Latin America, Eastern Orthodox Christianity (Russian) and Hinduism (Indian). Huntington also sees civilizations on the path to conflict, especially along the «fault lines» that divide them, such as Bosnia (where Muslims and Orthodox Christians clashed), Kashmir (where Muslims and Hindus meet), and Sudan (where a bloody war between Christians and Muslims has been going on for decades). 11 Corruption since 2004 Corruption is well documented in all societies, from Congo`s banks to the Dutch royal family`s palace, from Japanese politicians to Brazilian bankers, from Indonesian government officials to the NYPD. According to Transparency International, an independent nonprofit organization dedicated to detecting and fighting corruption, companies and individuals around the world spend about $400 billion a year on bribes related to government procurement contracts alone. In the middle, however, there is a large gray area. It is possible to have democratic societies that emphasize a mixture of collectivism and individualism. Similarly, it is possible to have totalitarian societies that are not collectivist. 18 Differences in economic development: purchasing power parityGNI income per capita GNI per capita Growth rate (%) Brazil $2,710 $7,480 2.6% China $1,100 $4,990 9.3% Germany $25,250 $27,460 1.2% India $530 $2,880 6.1% Japan $34,510 $28,620 Nigeria $320 $900 3.1% Poland $5,270 $11,450 4.8% Russia $2,610 $8,920 0.1% Switzerland $39,880 $32,030 0.9% United Kingdom $28,350 $27,650 2.8% United States $37,610 $37,500 3.2% As can be seen, there are striking differences in living standards. Table 2.1 suggests that the average Indian citizen can only afford to consume 7.7% of the goods and services they consume in PPP. 30 The nature of economic transformationDeregulation Removal of legal restrictions on market forces Allowing the creation and operation of private enterprises Privatization Transfer of ownership of public enterprises to individuals Legal systems Laws promoting a market economy The transition to an economic market system often involves a number of stages: deregulation, privatization and the creation of a legal system for the protection of property rights.