CHAPTER 3
GOVERNMENT AND CITIZENS IN A GLOBALLY
INTERCONNECTED WOLRD OF STATES
LERNING OBJECTIVE
At the end of chapter, the students should able to:
1. Distinguish nation from state;
2. Identify the elements of the state;
3. Explain the political, legal, and regulatory environments of
global states.
4. Explain the impact of political risk and government;
5. Distinguish Common law, Civil Law and Islamic, and
6. Explain the principle and concepts of bribery and corruption.
State Nation
A state is a community A large body of people
of persons, more or less united by common
numerous, occupying a descent, history, culture, or
definite territory, language, inhabiting a
possessing an organized particular country or
government, and enjoying territory.
independence from
external control.
State and
Nation
- Cultural Unit
- Political Unit
- Latin word “Natio” and
- Latin word “Statum”
Old French word “Nacion”
Status (To stand)
(To birth)
- Defined Boundaries
- Common religion,
- Independent Country
language
- Ethic identity
Elements
of
State
PEOPLE
This is the entire body of
those citizens of a state
who are invested with
political power for political
purpose.
TERRITORY
It is a geographical area
under the jurisdiction of
another country or the
sovereign power of the
state.
MODES
OF
TERRITORY
Discovery Subjugation
and Prescription and
Occupation Annexation
Cession Accretion
GOVERNMENT
Government is the totality
of authorities which is rule
a society by prescribing
and carrying out
fundamental rules which
regulate the freedom of its
members
Kind of Government
De Jure or Legitimate De Facto or Illegitimate
Government Government
This is established A government that maintains
according to the itself by a display of force
constitution, and lawfully against the will of the rightful
legal government and
entitled to recognition and
successful, at least
supremacy and temporarily, in overturning the
administration of the institutions of the rightful
nation, but which is government by setting its own
actually cut off power of in lieu thereof.
control.
Three Kinds
of
De Facto Government
Government by
Government by
Government by Occupation
Revolutions is established in the
Secession
course of war by the
is established by the invading forces of one
is established by the
inhabitants who rise belligerent country in
inhabitants of a
in revolt against and the territory of another
state who secede belligerent country, the
depose the
therefrom without government of which is
legitimate.
overthrowing. also displaced.
SOVEREIGNTY
It is the supreme, absolute
and uncontrollable power
by which an independent
state is governed.
Two Kinds of Sovereignty
External Sovereignty
The power of an
Internal Sovereignty independent state to
The power to control and control and direct its
direct the internal affairs of external affairs such as the
a country such as the authority to enter into
authority to enact, treaties with other states,
execute, and apply laws. to wage war, and to receive
and send diplomatic
mission.
POLITICAL, LEGAL, AND
REGULATORY ENVIRONMENT
AMONG STATES
- The Political, legal, and - Example:
regulatory environment is The Conducting of
mostly often operates nuclear weapon tests of
when it comes to India and Pakistan.
international trades and
global making activies.
POLITICAL
ENVIRONMENT
-Political Culture
are the beliefs, opinions, and
emotions of the citizens toward
their form of government.
-It exercises
Note: Corporations that wanted
Power to establish business outside the
home country should examine
the target states’ Political
Culture.
NATION – STATES AND
SOVERIEGNITY
Two Important
Criteria
-Sovereignity - a country’s stage of
promotes development
- Economic system in
Independence the place of the
country
POLITICAL RISK
- is the risk of a change in - it’s the risk of financial,
political environment or market or personnel loses
government policy that because of political
would affect a company’s decisions or disruptions.
ability to operate
effectively and profitably.
CATEGORIES OF
POLITICAL RISK
CATEGORIES OF
POLITICAL RISK
CATEGORIES OF
POLITICAL RISK
CATEGORIES OF
POLITICAL RISK
4 CAUSES OF POLITICAL RISK
TENSION TAXES
INTERNATIONAL
SEIZURE AND ASSET
LAW
TENSION
- Is the fundamental - In high income
cause of political risk countries, the gap
between the residents’ between aspirations and
aspiration and goal and reality and in high
the real conditions at a income countries is
given time. seldom enough to
generate a significant
level of political risk.
TENSION
TAXES SEIZURE OF ASSET
- Is a lifeblood of every
- The ultimate threat a
governments.
government can pose toward a
- Government taxation policies
company.
on the sale of goods and
- Expropriation government
services frequently motivate
action to dispossess a foreign
companies and individuals to
company or investors.
profit by not paying taxes.
- Confiscation
- Corporate Taxation is
- Domestication
another issue.
INTERNATIONAL LAW
- May be defined as the
- International law
rules and principles that
nation states consider applies only the extent
binding upon themselves. that countries are
- Pertains to property, willing to assume all
trade, immigration and rights and obligations
other that have traditionally
in these areas.
been under the jurisdiction
of individual nations.
Public International Private
law International law
• Governs the relationship
between states and
international entities • Otherwise called “conflict of
(mainly through treaties) laws”
• It has several fields: • Governs relationship between
private entities
treaty law, international • Addresses questions such as
human rights law, which jurisdiction may hear a
international specific case and the law of
humanitarian law (or which jurisdiction applies to
laws of war), refugee law, the issues to be discussed in a
international criminal given case
law, law of the sea
Common law Civil law
•There is not always a written constitution • There is generally a written
or codified laws; constitution based on specific
•Judicial decisions are binding – decisions
codes (e.g., civil code, codes
of the highest court can generally only be covering corporate law,
overturned by that same court or through administrative law, tax law
legislation. and constitutional law)
enshrining basic rights and
•Extensive freedom of contract - few
duties; administrative law is
provisions are implied into the contract by
law (although provisions seeking to protect however usually less codified
private consumers may be implied); and administrative court
judges tend to behave more
•Generally, everything is permitted that is like common law judges;
not expressly prohibited by law.
Common law
Civil law Countries
Countries
China
• The United
States Japan
• England Germany
• India France
• Canada
Spain
• Known as the Sharīʿah (literally, “the path leading to the
watering place”), the law represents a divinely ordained
path of conduct that guides Muslims toward a practical
expression of religious conviction in this world and the goal
of divine favour in the world to come.
• Islamic Law is also called and known by Sharia. Sharia is
the moral code and religious law of Islam. Sharia deals with
many topics addressed by secular law, including crime,
politics, and economics, as well as personal matters such as
sexual intercourse, hygiene, diet, prayer, everyday etiquette
and fasting.
2 Sources of Islamic law (Sharia)
The Quran is viewed as the unalterable word of God. Much of the
Quran exhorts Muslims to general moral values; only 80 verses of the
Quran contain legal prescriptions
The Sunnah is the life and example of the Islamic prophet
Muhammad P.B.U.H. The Sunnah's importance as a source of Sharia,
is confirmed by several verses of the Quran The process of
interpreting the two primary sources of Islamic law is called fiqh
(literally meaning "intelligence") or Islamic jurisprudence
Balances in Globalization
1. Traditonal balance between nation-states
2. Balance between nation-states and Global Markets
3. Balance between individuals and nation-states.
