International Business: The New Realities, 5th Edition

Democracy

Democracy is characterized by two major features:

• Private property rights. Individuals can own property and assets and increase one’s asset base by accumulating private wealth. Property includes tangibles, such as land and buildings, as well as intangibles, such as stocks, contracts, patent rights, and intellectual assets. Democratic governments devise laws that protect property rights. People and firms can acquire property, use it, buy or sell it, and bequeath it to whomever they want. These rights are important because they encourage individual initiative, ambition, and innovation as well as thrift and the desire to accumulate wealth. People are less likely to have these qualities if there is uncertainty about whether they can control ...