LO3-2 States in Transition

What are the three major global political/economic trends since the late 1980s?

• Spread of democracy

• Shift toward free‑market economies

• Since 2005: rise in authoritarianism + rising protectionism

What does Freedom House measure?

Political freedom (free, partly free, not free).

What is the first reason democracy spread?

Totalitarian regimes failed economically.

What is the second reason democracy spread?

New technologies (internet, satellite TV, social media) weakened government control over information.

What is the third reason democracy spread?

Rising middle classes demanded rights and accountable government.

What happened to democracy after 2005?

Many countries shifted back toward authoritarianism.

What does authoritarian backsliding look like?

• Rigged elections

• Restricted civil liberties

• Attacks on press

• Arresting opposition

• Limiting free speech

Türkiye (Turkey) under President Erdogan.

• Arrested opposition

• Arrested journalists

• Criminalized “insulting the president”

• Expanded presidential powers

• Restricted press and civil liberties

What major geopolitical debate followed the Cold War?

Whether the world would become democratic (Fukuyama) or divided into clashing civilizations (Huntington).

What did Fukuyama argue?

Liberal democracy is the “final form” of human government.

What did Huntington argue?

The world is divided into civilizations that will clash (e.g., West vs Islam, West vs China).

• 9/11

• Rise of ISIS

• China’s assertiveness

• Russia’s invasion of Ukraine

Why does Huntington’s theory matter for business?

Countries in conflict become risky for investment and operations.

• Western companies exiting Russia after the 2022 invasion of Ukraine.

What is a “multipolar world”?

A world with several major powers (U.S., China, India, Russia) instead of one dominant power.

Why does a multipolar world increase business risk?

More geopolitical tension → more uncertainty → more disruption.

What does Huntington say about terrorism?

It comes from civilizational and ideological conflict.

What economic trend paralleled the spread of democracy?

Shift from command economies → market-based economies.

Examples of countries that moved toward market systems?

Former Soviet states, Eastern Europe, China, Vietnam, Angola, Ethiopia, Mozambique.

What is privatization?

Selling state-owned businesses to private investors.

Why did countries shift toward market economies?

Command/mixed economies failed to deliver strong economic performance.

What does the Heritage Foundation’s Index of Economic Freedom measure?

• Government intervention

• Trade policy

• Property rights

• Foreign investment rules

• Taxation

• Corruption

• Labor freedom

Why did China’s economic freedom decline after 2020?

The state tightened control over private enterprises, especially tech companies.

Does economic freedom always mean political freedom?

No — example: Singapore is economically free but only “partly free” politically.