The paper "Political, Economical and Cultural Motives behind Government Intervention in Trade" is a good example of business coursework. Free trade means business without limitations and restricts from the government. In other words, free trade is a trend of imports and exports that happens in the absence of trade barriers. Such businesses are characterized by exploitations and abuse of business ethics and in worse situations can lead to war between conflicting countries. Therefore, the government impose restrictions to regulate free trade for three main reasons; political, cultural and economic. It enforces the reasons, government use instruments such as quotas, subsidies, and tariffs among other instruments.
In most cases the government intervene in trade to protect its citizens, the reason being that they are the same people how voted them into power. Some of the main reasons are discussed below into details. Government’ s political motive in trade Political environment within a government consists of structures, activities and process within which nation governs itself. In democratic nations, government officials are elected directly by people within the nation’ s jurisdictions. The people eligible to vote can be both persons with 18 years and above, and people’ s representatives (Baumol, 2002).
In most democratic nations, individuals are voted from a group of people and they are given powers to govern them (representative democracies). In undemocratic nations, people are governed without their views being considered and any opposing views are not in any way tolerated. Under theocratic leadership, religious leaders are the one that governs the country. This kind of leadership is based on religious and totalitarian beliefs. Another kind of leadership is the secular totalitarianism which is characterized by political leaders depending on the military and bureaucratic power.
It normally comes in three forms; communist, tribal, and fascist totalitarianism. Under all the forms of political leadership systems, there is the likelihood that the government or the society will experience changes that may affect negatively the business activity. This is political uncertainty may arise from; frequent changes in the form of government, political involvement of religious or military leaders, corrupt or poor political leadership, unstable political systems and poor relations with other countries. If these uncertainties are not maintained and well managed, they can lead to one or all of the following risks; conflict and violence, property seizure, terrorism and kidnapping and local content requirements.
Therefore, the political environment determines the way things are done in and outside a country. It also dictates business relationships within domestic industries and those of other countries (Capuano, 2006). In general, favourable political relations lead to increased opportunity and stable business environments. I say, one political system of a certain country differ from another political system which they have earlier established a business contract, it may cause uncertainties between the two countries.
It is, therefore, upon international business to protect the following; rights of property, intellectual property, antitrust regulations, taxation policies, product liability and ethical dilemmas. By so doing, the international trade ensures that there is peaceful coexistence between members though their political systems differ. Political motives for government interventions Due to the above mentioned political issues, government officials more often than not make trade-related interventions based on political motives. This is so because leaders are subject to people they represent in their country and group. They, therefore, intervene because they want to be re-elected and pleasing the voters who put them into office.
The main common interventions based on political arena include; job protection, preserving national security, responding to other nations’ unfair trade practices and finally, gaining influence over other nations (Andersen, Bjø rn-Andersen & Dedrick, 2003).
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