Question

Consider the following statement: “Democratic political systems, as opposed to totalitarian ones, provide international companies with more stable environments in which to do business.” Do you agree or disagree with this statement, and why?

Answer 1

Democratic political system the people elect their leaders where as government is run by these people representatives.

eg: India

Totalitariani system one person or one political party has absolute power and opposing political parties parties is prohibited.

eg: China

I agree with the above statement that democratic political systems provide international companies more stable environments to do business.

In a totalitarian form the market economy is closed and is controlled by these individuals there will be no scope for international companies to create market in their countries because the government will not support any such activity as the market will be hands of individuals there will be no government support to the companies unless the company is pro government. If this totalitarian political system there will growth in economy and have development very faster as their will be more investments of their own companies and they will invest in other countries where the market is open but they always maintain there markest closed.

In a democratic system the growth rate is slow but the government will always want to make a market for other companies and provides rules and policies which will attract foriegn investment. These are developing markets but are open. In these countries there will be government support and provide support even though you are anti to the government.

Thus it is always better to invest in democratic governments.