The modern business environment has been shaped by political and economic events. Rapid growth and change in many areas have been typical in the past two or three decades. In the midst of growth and change, some trends have emerged as the drivers of change. Political and economic trends have different dynamics. The international business manager needs a clear vision and understanding of world events and the markets and countries in which he or she operates. Putting current events into the historical context provides the manager with the ability to distinguish anomalies from trend events. The same vision and understanding offer the manager insights into timing and opportunity.

The transformation of the political economy of the world's nations has been driven by a wave of democratic revolutions and the strong move toward a more free market economic model. International business managers must assess the attractiveness of specific locations. Countries with democratic regimes, market-based economic policies, and strong protection of property rights are more likely to attain a high and sustained growth rate. These countries are attractive locations for international business.

Select whether each trend below is primarily political or economic in nature.

1. Markets move more freely, and private enterprise grows in a supportive environment.

a. Political Trend.
b. Economic Trend

2. Sub-Saharan Africa was the poorest region in the world for decades, but democratic reform has allowed it to revel in an annual growth rate of 5 percent over the past decade.

a. Political Trend
b. Economic Trend

3. The end of the Cold War ushered in a "new world order."

a. Political Trend
b. Economic Trend

4. Privatization is a way to stimulate growth and efficiency by offering private investors the incentive of profits. Privatization can mean increases in productivity, entering new markets, and leaving losing ones.