International business the new realities 7 16 the

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International Business: The New Realities 7-16
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The Rule of Law Common in the advanced economies. The legal system is: (i) applied to all citizens equally; (ii) issued via recognized government authorities; and (iii) enforced fairly and systematically by police forces and formally organized judicial bodies. Economic activity suffers and uncertainty increases when the rule of law is weak. International Business: The New Realities 7-17 Existence of a legal system where rules are clear, publicly disclosed, fairly enforced, and widely respected by individuals, organizations, and the government.
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Legal Systems: Common Law A legal system that originated in England and spread to Australia, Canada, USA, and other former members of the British Commonwealth (also known as case law ). The basis of law is tradition, past practices, and legal precedents set by courts via interpretation of statutes, legislation, and past rulings. Judges have much power to interpret laws based on the circumstances of individual cases. Thus, common law is relatively flexible. International Business: The New Realities 7-18
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Legal Systems: Civil Law Found in France, Germany, Italy, Japan, Turkey, and much of Latin America. Based on an all-inclusive system of laws that have been “codified”—clearly written by legislative bodies. Laws are more ‘cast in stone’ and not strongly subject to interpretation by courts A key difference is that common law is mainly judicial in origin and based on court decisions, whereas civil law is mainly legislative and based on laws passed by national and state legislatures. International Business: The New Realities 7-19
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Sampling of Differences between Common Law and Civil Law International Business: The New Realities 7-20
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Legal Systems: Religious Law Strongly influenced by religious beliefs, ethical codes, and moral values, viewed as mandated by a supreme being. Most important religious legal systems are based on Hindu, Jewish, and Islamic law. Islamic law spells out norms of behavior regarding politics, economics, banking, contracts, marriage, and many other social and business issues.
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Legal Systems: Mixed Systems Two or more legal systems operating together. The contrast between civil and common law has become blurred as countries combine both systems Totalitarianism is most associated with religious law and socialist law. Democracy is associated with common law, civil law, and mixed systems. International Business: The New Realities 7-22 Example Legal systems in Lebanon, Morocco, and Tunisia share elements of civil law and Islamic law.
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Dominant Legal Systems in Selected Countries International Business: The New Realities 7-23
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Actors in Political and Legal Systems The government , or the ‘public sector’, operating at national and local levels. International organizations such as the World Bank, World Trade Organization, and the United Nations Regional economic blocs , such as the European Union, NAFTA, and many others.
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