Collectivist-inclined totalitarian states tend to enact laws that seve

QUESTION

Collectivist-inclined totalitarian states tend to enact laws that severely restrict private enterprises, whereas the laws enacted by governments in democratic states,

where individualism is the dominant political philosophy, tend to be pro-private enterprise and pro-consumer. This indicates that the:
A. economic system of a country is independent of its legal system.

B. legal system of a country is not influenced by the prevailing political system.

C. legal system does not affect the attractiveness of a country as an investment site or market.

D. all countries have the same legal environments.

E. the legal framework of a country reflects the rulers’ dominant political ideology.

ANSWER

E
The government of a country defines the legal framework within which firms do business, and often the laws that regulate business reflect the rulers’ dominant political ideology. For example, collectivist-inclined totalitarian states tend to enact laws that severely restrict private enterprise, whereas the laws enacted by governments in democratic states where individualism is the dominant political philosophy tend to be pro-private enterprise and pro-consumer.