Democracy: a political system in which citizens Civil law: a legal tradition that uses comprehensive Market economy: an economy

n economy that is Population: rich countries tend to have smarter

elect representatives to govern the country on their statutes and codes as primary means to form legal characterized by the invisible hand of market and hard-working population driven by a stronger
behalf. judgements. forced. motivation for economic success.

Totalitarianism: a political system in which one
person or party exercises absolute political control
over the population. (dictatorship)
Communist: centres on a communist party. System
in which goods are owned in common and are
available to all as needed.
Common law: legal tradition that is shaped y
precedents and tradition from previous judicial
decisions.
Theocratic law: a legal system based on religious
teachings. Examples, Jewish and Islamic law.
Command economy: an economy that is
characterised by government ownership and
control of factors of production.
Mixed economy: an economy that has elements
both market economy and command economy.
Natural: thanks to lucky geographical locations
tend to be well endowed with natural resources.
Institutional: “the basic determinants of the
performance of an economy” because they
provide the incentive structure of a society, formal
political, legal and economical.

Right wing: intense hatred against communism.

Typically backed by military and restricts political
freedom as it would lead to communism.

Theocratic: refers to monopolization of political

power in the hands of one religious party or group

Political Systems
Legal Systems Economic Systems Economic Development Drivers
Democracy
Civil Law Market economy Population characteristics
Totalitarianism
Common Law Command economy Natural resources
- Communist
Theocratic Law Mixed Economy Institutional Frameworks
- Right wing
- Theocratic

Regulatory: the coercive power of governments. E.g. individuals and companies pay taxes out of their duty, a
WEEK 2 Understanding Institutions
large number of them do so in fear of the coercive power of the government if they are caught not paying.

Regulatory Pillar Normative: the mechanism through which norms influence individuals and firm behaviour. The norm from

Understanding Politics, Normative Pillar

Cognitive Pillar
other things.

Cognitive: the internalized values and beliefs that guide individual and firm behaviour. (right or wrong)
Laws & Economics