LEGAL

SYSTEMS
Legal system refers to a procedure or process
for interpreting and enforcing the law. It
elaborates the rights and responsibilities in a
variety of ways. Three major legal systems of the
world consist of civil law, common law and
religious law.

PROPERTY RIGHTS
Is the exclusive authority to

determine how a resource is

used, whether that resource is
owned by government or by
individuals.

PRIVATE PROPERTY RIGHTS

includes the right to delegate,

rent, or sell any portion of the

rights by exchange or gift at
whatever price the owner
determines( provided someone is
willing to pay that price).

ATTRIBUTES OF PRIVATE
PROPERTY RIGHTS:
Right to the service of the resource.
Right to determine the use.

Division of Law:
Religious Law

Secular legal systems

The source of religious law is

the deity, legislating through
prophets.
Perceived to be eternal and
immutable.
Tells people what to believe as
well as how to behave.
Disputes are usually
adjudicated by an officer of
that religion, so the same
person is both judge and
priest.

It is made by human beings,

and one of its most famous
example begins with the word
we the people.
Can be changed by their
makers.
Deals with our external actions
as they affect others.
By contrast, the office of judge
is separate, and is often
reinforced by guarantees of
judicial independence.

A NUMBER OF COUNTRIES HAVE

DUAL SYSTEMS IN WHICH
RELIGIOUS COURTS ADJUDICATE
ON, SUCH MATTERS AS
MARRIAGE, DIVORCE, FAMILY
RELATIONSHIPS AND POSSIBLY
FAMILY PROPERTY, WHILE A
SECULAR SYSTEMS WITH THE
STATE COURTS COVERS THE
WIDER FIELDS OF PUBLIC AND
COMMERCIAL LAW.

THE BASIC ELEMENT OF

PRIVATE PROPERTY ARE:
Exclusivity of rights to choose the use of

a resource.
Exclusivity of rights to the service of a

resource.
Right to exchange the resource at

mutually agreeable terms.

REASONS WHY ECONOMIST BELIEVE

THAT MOST RESTRICTIONS ON
PROPERTY RIGHTS ARE DETRIMENTAL
SOCIETY:
Under the privateTO
property
systems the market values of
property reflect the preferences and demands of the rest of
society.
The fundamental purpose of property rights, and their

fundamental accomplishment, is that they eliminate

destructive competition for control of economic resources.

The two extremes in weakened property rights are : (1)

Socialism (2) commonly owned "resources.

Private property rights of a resource need not be held by a

single person.
Private property rights do not conflict with human rights.

PRODUCT
SAFETY AND
PRODUCT
LIABILITY

CONSUMER
PRODUCT
SAFETY ACT
Establishes stricter guidelines for reporting
product defects and any injury or death
resulting from such defects.

PRODUCT
LIABILITY
Theresponsibilityofamanufacturerorvendoro
fgoodstocompensateforinjurycausedby
defectivemerchandisethatithasprovidedfors

CLAIMS REGARDING
PRODUCT LIABILITY:
Negligence
Warranty
Strict liability
Misrepresentation

CONTRACT LAW

Body of law which regulates the enforcement of

contracts.
It is based on the principle expressed in the Latin
phrase pacta sunt servanda, which is usually
translated agreement must be kept but more
literally means pacts must be kept.

Property- any physical or intangible that is owned by a person or

jointly by a group of people or a legal entity like a corporation.

DETERMINANTS OF
ECONOMIC DEVELOPMENT
Economic factors:
Natural Resources

Capital

Labor

Power

Transport and Communication

Human Capital

Economic Development usually refers to the adoption of new technologies,

transition from agriculture based economy, and general improvement in

living standards.

CAPITAL FORMATION OR
ACCUMULATION
Refers to the process of adding the stock capital over time.

Sources of Capital Formation:

1) Act of Saving- involves the postponing of consumption

whether voluntarily or involuntarily so that funds made

available.
2) Capital Market- consist of financial institutions, like

development banks, stock exchanges and investment banks.

3) Act of investment

HOW TO INCREASE CAPITAL

FORMATION?
In developing countries, the capital formation is around 5%. It should be

raised to the level of at least 20% by adopting the following measures:

Since voluntarily saving is not forth coming in low income

countries, the government should resort to force saving. The

various method of forced saving are: (A) Taxation (B) Deficit
Financing (3) Borrowing.
Obtaining of external resources in the form of loans and grants

for development progress.

Increasing exports and reducing imports can also provide

funds for capital formation.

POWER
Power resources- foundation of economic development.

Types of power sources:

1. Commercial
2. Non-commercial- oil, gas coil, hydel, thermal electricity and

nuclear.

POLITICAL
ECONOMY
The original term for studying the various acts of
production, buying and selling and their relations
with the laws, customs and governance.
From the Greek word Polis (City or State) and Oikonomos(One

ECONOMIC
PROGRESS
Continuous gain in the relative efficiency of
the coordination and utilization of goal
directed human labor.

TECHNOLOGICAL
PROGRESS
Continuous gain in the knowledge of how
best to coordinate and utilize goal directed
human labor.

THE SPREAD OF
DEMOCRACY
Among he criteria that Freedom House uses to determine ratings for
political freedom are the following:
Free and fair elections of the head of state and legislative

representatives.
Fair electoral laws, equal campaigning opportunities, and fair polling.
The right to organize into different political parties.
A parliament with effective power.
A significant opposition that has a realistic chance of gaining power.

NATURE OF ECONOMIC
TRANSFORMATION
Deregulation
Privation
Implications

PRODUCT
SAFETY
Requirements ensure the safety of all non
food products proposed to individual
consumers in he internal market.