Question

What are the differences in the legal and institutional foundations of the Anglo-Saxon, European and Asian models of capitalism?

Answer 1

1.The Anglo-Saxon model

Originated in England in the 18 century and it is patterned after the classical liberal ideas of A. Smith; It uses common law, which operates with lay judges, broader legal principles, oral arguments.It is based on the principle that government intervention in the economy should be limited,example-USA

2. The European model

It is patterned after the econ principles from the 19 century in France and Germany that places less faith in the invisible hand and call for more state intervention in econ activity, including more state ownership and uses civil (roman) law, which is based on professional judges, legal codes and written records, examples- Germany,France etc

3.The Asian model

It is closer in its institutional arrangements to the European model; it focuses on high rates of capital formation,It exists in variety of forms and involves a considerable amount of experimentation.The high rate of investment in human and physical capital are common in this model.

Examples-Japan