Question

In recent times, we have seen numerous example of people around the world expressing their voices in opposition to proposed changes to society (Les Gilets Jaune in France, university students in Hong Kong) and in support of others (Racial equality in the wake of the George Floyd killing in the US; Extinction rebellion in favour of global action on climate change). And yet, many have warned about a retreat from democracy that is occurring in many places internationally, including Hong Kong, Hungary, Russia and the US. What are the likely impacts on international business of the loss of democracy in several large countries?

Answer 1

Democracy goes hand in hand with the international trade.It can be understood in following reasons:

A democratic political system is necessary for the economic development and promoting closer economicintegration may help to achieve better economic outcome by bulidinb better economic institutions.

A positive link between trade and democratic governance is a good reason for policy makers to deepen trade liberalisation at both global and regional levels.

In case of china,its recent success stand as a counter point to the idea that democracy is better for business and economic development.Multinational companies as well as local companies have fared extremely well over the case of China's last 10years of economic development which was accomplished under a autocratic regime.

In Hungary,combines features of an exclusive ,delegative,illiberal and tutelary democracy.The lack of consensus on how to categorise Hungary's regime as well as the difficulty international and regional organization have in dealing with de-democratisation in Hungary.

All these shows that there is a significant relationship between Democracy and trade.

Another highlighted point is that firstly the larger and more open the country is ,the higher the democratisation is;secondly a bit suprisingly landlocked and small island developing countries are more democratised than countries which do not belong to this group,and oil exporting countries are less democratized.

Thus international trade can foster not only economic development but also the emergencies of economic regimes.

Democracy can modernise economies, improve social condition and integrate into the international community.