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International Marketing

Notes dissatisfaction among citizens. The Institutional Revolution Party (IRP) had ruled Mexico since
its revolution but economic problems caused dissatisfaction among the citizens, as a result of
which the opposition gained ground for shadowing the transition of the single party system.
In a dominated one party system, the dominant party does not allow any opposition resulting
in no alternative for the people. In contrast, a single party system does allow some opposition
parties. The former Soviet Union, Cuba and Libya are good examples of dominated one party
system. Such a system tends to easily transform itself into dictatorship. In order to maintain its
power, a single dominated party may use force or any necessary means to eliminate the
introduction and growth of other parties. China is another example of single dominated party.
The economy of a country depends upon the political stability of that country. South Africa,
which is a developed nation, has been suffering with internal and external problems, which
resulted in poor economic development. Italy is another politically unstable developed country.
Its political atmosphere is marred by weak economy, recurring labour unrest and internal
dissension. In contrast, Vietnam, despite being a developing country, is politically more stable
than Italy. This stability is due to Vietnam’s relatively closed society.

Did u know? Democratic political system is a pre requisite for political stability also.
India, the largest democracy in the world, possesses a sound political infrastructure and political
institutions that have withstood many crises over the years. The democratic system is so strongly
embedded in India that it is almost inconceivable and impossible that Indians will choose any
other system. Yet regional, ethnic, language, religion and economic problems hamper India’s
political stability. In other democratic nations like Australia, such problems have been resolved
but India’s difficulty still remains. These geographic, ideological and ethnic problems inhibit
the government’s ability to respond to any one sector’s demands.
Dictatorial systems, monarchies and oligarchies may be able to provide great stability for a
country but when a ruler dies suddenly, the risk of widespread disruption and revolution can be
very high.

3.2.2 Economic Systems

Classification of government based on economic system can be another basis of its types. In the
economic systems, the basis explains whether business is privately owned or government owned
or whether there is a combination of private and government ownership. Basically, there are
three economic systems that have been identified as the basis for classification of government:
communism, socialism and capitalism.
A socialist government owns and operates the basic major industries but leaves small business
to private ownership. Communist theory holds that all resources should be owned and shared
by all the people (not by profit seeking enterprises) for the benefit of the society. In actual
practice, it is the government that controls all productive resources and industries and as a result
the government determines jobs, production, price, education and just about anything else. The
emphasis is on human welfare. Profit making is not the government’s main motive; hence, there
is a lack of incentive for the workers and managers to improve productivity.
Centrally planned economies are often used to refer to the former Soviet Union, East European
countries, China, Vietnam and North Korea. These economies tend to have a number of
characteristics – a communist philosophy, an active government role in economic planning, a
non-market economy, a weak economy, large foreign debt and rigid and bureaucratic political/
economic systems. In this context, the example of North Korea and South Korea, which gives a
contrast between these two countries, is quite striking. While North Korea’s economy is shrinking,

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