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GOOD ECONOMIC

ENVIRONMENT
AND
GOOD BUSINESS
ENVIRONMENT

STAGE OF
DEMOCRATIZATION

1. Non-democracy
2. Minimalist democracy
(Electoral democracy)
3. Procedural minimum democracy
4. Expanded procedural minimum
democracy
5. Established industrial democracy
6. Maximalist democracy
(Liberal democracy)
(David Collier and Steven Levitsky)

GOOD ECONOMIC
ENVIRONMENT
1.

CLASSIFICATION OF ECONOMIC

SYSTEM
- Free market
- Managed market
- Command economy
2.

CLASSIFICATION OF COUNTRY
-

developed country
developing country
less developed country
least developed country

3.

CLASSIFICATION OF SECTOR
- Formal Sector
- Informal Sector

4.

FIVE KEY FACTOR


-

Economic Growth
Privatization
Inflation
Balance of Payment
Debt-service ratio

5.

FIVE RESERVE FACTOR


-

6.

Size of market
Educated work force
Wage labor
Property
Entrance
FDI, Port-folio

POLITICAL STABILITY

7.

GOVERNMENT SECTOR
(a) Socialization of production and consumption.
(Socialism)
(b) Socialization of Consumption
(Welfare State)
(c) Ideology based on John Maynard Kenyes
(d) Chaos

8.

LAW
- Common Law System
- Legal Code System
- Islamic Law

9.

CULTURE

GOOD BUSINESS
ENVIRONMENT

KEY FACTORS
1.
2.
3.
4.

Infrastructure
Regulatory institutions
Education
Culture

DOING BUSINESS IN ------ .

1. Start a business in terms of local


rules, regulation and license fees.
2. hire and fire workers
3. enforce a contract
4. Get credit
5. Close a business that goes bankrupt
or is failing.

TO START A BUSINESS

- Australia - 2 days
- Haiti - 203 days
- Congo - 215 days

TO START NEW BUSINESS

- Denmark - no monetary costs


- Cambodia- more than 5 time income
per capita
- Sierra Leone - more than 13 times
income per capita

A SIMPLE COMMERCIAL CONTRACT


IS ENFORCED

- Tunisia
- 7 days
- Netherlands - 39 days
- Guatemala - 1,500 days

TO GET CREDIT

BANKS
INCUBATOR
SEED CAPITAL
OTC

CORRUPTION

CORRUPTION EQUATION
C=R+DA
C = Corruption
R = Economic rent
D = Discretionary powers
A = Accountable