Canadian Political Economy Analysis and Attractiveness

Running Head: CANADAIAN POLITICAL ECONOMY ANALYSIS AND ATTRACTIVENESS 1
CANADAIAN POLITICAL ECONOMY ANALYSIS AND ATTRACTIVENESS
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CANADAIAN POLITICAL ECONOMY ANALYSIS AND ATTRACTIVENESS 2
1.0 Executive Summary
Globalization has enabled many countries to enter international trade. This is due to the
benefits associated with international trade the major one being availability to diverse market
(Levitt, 2013). The political system of every nation matters a lot in determining the scope of its
trading activities with other nations. The country of choice is Canada. Canada is ranked number
ten among the large and developed economies in the world. It has a mixed economy with the
major dominant sector being the service sector which accounts for more than three quarters of
the nation’s total employment (Norrie & Crime, 2011). Canada has almost all its industries open
to foreign competition and highly skilled labor is readily available. The government of Canada
has undertaken various reforms to improve its foreign direct investment. They include increase in
government expenditure more so the infrastructure sector, reduction of small businesses’ tax and
reduction of tariffs among others. However various costs have been involved such as social
consent involved in pipeline construction for oil companies which should be adjusted
accordingly to prevent foreign investment collapsing. In a nutshell, Canada continues to be a
center of attraction for foreign investors and its political system is anticipated to remain stable in
future.
2.0 Table of Contents
1.0 Executive Summary.................................................................................................................................2
3.0 Introduction..............................................................................................................................................3
4.0 Political Economy Analysis.....................................................................................................................3
4.1 Canadian Political System...................................................................................................................5
4.2 Canadian economic system..................................................................................................................6
4.3 Canadian legal system..........................................................................................................................7
5.0 Recommendations....................................................................................................................................8
6.0 Conclusion...............................................................................................................................................8
7.0 References................................................................................................................................................9

CANADAIAN POLITICAL ECONOMY ANALYSIS AND ATTRACTIVENESS 3
3.0 Introduction
Canada is among the richest nations in the world. According to the gross domestic
product which is commonly used to measure a country’s size of economy, Canada is ranked
number ten (Clement, 2014).
Canada is ranked among the top ten nations countrywide with most free economies with
an economic freedom score of more than 77 percent. Almost all the Canadian industries are open
to foreign competition and high skilled labor force is readily availed by the government. Canada
also has a strong rule of law which highly supports an open market economy. For these reasons
Canada has remained the centre of attraction for investors both internally and internationally.
The purpose of this report is to analyze the political system Canada affects its economic
growth and investment both by foreign and national investors.
4.0 Political Economy Analysis
Political economy generally involves studying the production and trade in a given
country and analyzing the relationship with the government, custom and law (Drazen, 2012). It
also analyzes the production and trade relationship with the wealth and national income
distribution and expenditure.
Canada comprises of a mixed-economy which is highly developed and is ranked number
ten according to the gross domestic product worldwide. The country’s economy is majorly
dominated by the service industry which actually accounts for more than three quarters of the
total employment of Canada. The political system in any country plays a vital role in
determining its economic prosperity. The government policies formulated to control its economy
depend much on the political system of the country (Van Loon & Whittington, 2011). The level
of interest rates, taxation system and barriers to trade are majorly controlled by a nation’s
political system. All these factors affect the foreign direct investment in the country. It is
therefore crucial to analyze the economic performance and attractiveness of Canada by a close
look at its political system since it nearly controls everything prevailing in its economy.
The political economy analysis table is shown below: