Government and Business

PUAD A302 Government and Business is a one-year, 10-credit, higher-level course. It is one of the required courses of the Bachelor of Social Sciences in Public Administration with Honours programme. This course is neither a political science course per se nor an economics course per se. As the title of this course indicates, it is an interdisciplinary course dealing with political economy, i.e. the interrelationship between government and business, or between politics and economics. To be more specific, it is a course dealing with how government can affect the economy/business, and vice versa.

The course first introduces you to the general coverage of the course contents, some key concepts in political economy, and the major roles of the government in the economy. Then it introduces the theoretical framework whereby the interacting roles of business and government in the modern economy are analysed. Special reference will be made to the models of governance in Anglo-American capitalism, market socialism, and East Asian capitalism. Within the model of East Asian capitalism, special emphasis will be given to the development of greater China: i.e. mainland China, Hong Kong and Taiwan. The course then introduces international political economy. A nation's economy does not operate or develop in isolation. There is some kind of internationalregime that guides or governs international trade and commerce. A nation's economy, especially that of a major economic power, may affect the world's economy and in turn it is affected by the latter. Besides the international economic institutions, the course also introduces you to the strategies and politics employed by the nation states for the conduct of their foreign trade and commerce. Finally, the course introduces you to the responses made by both governments and business as a result of the environmental changes that occur both nationally and internationally.

Those of you who have taken POLS A201 Introduction to Political Science, PUAD A202 Introduction to Public Administration or PUAD A203 Introduction to Public Policy, or an introductory course in economics, will find such background helpful when taking this course.

All HKMU courses set out to provide you with a series of aims and course learning outcomes which you find below for this course.

Course aims

PUAD A302 Government and Business aims to provide you with a framework for understanding the role of government and business in general, and their role in promoting economic development in particular. Drawing on the experiences of the developed countries and developing countries, especially those in East Asia, the course is designed to guide you as public administrators to analyse the prospects and problems of the interplay between business and government in fostering economic growth in the age of globalization.

Course learning outcomes

Upon completing this course, you should be able to:

1. Analyse key terms and concepts related to government and business.
2. Examine the relationship, sometimes dialectic, between government and business in fostering economic transformation and growth.
3. Assess the analytical frameworks of the developmental state, the competition state, market failure and government failure.
4. Evaluate the industrial and competition policies in the major developed and newly industrializing countries.
5. Appraise the role of industrial and competition policies in the age of globalization.
6. Analyse issues related to government involvement in the economy in Hong Kong and mainland China.

The approach of this course is designed to be as logical as possible. You will need to read this part very carefully, as it is important from the beginning that you organize your work and time as effectively as possible.

Materials

In addition to this Course Guide, the course has the following important components. Please ensure that you have all of these materials available.

Study units

There are ten study units in Government and Business. The study time required for each unit depends on the number of weeks required to complete the study. For a four-week unit, it requires about 30 hours. The ten units are all for four weeks each. The hours required include reading of the textbooks, doing the activities, writing the assignments, and calling or meeting the tutors or attending the tutorials. The total number of hours required of this course is about 300. It is to be noted, however, that the number of hours required of each unit is just a rough guide. The actual number of hours required depends, to some extent, on the length of the chapter(s) and whether the materials are difficult or not.

The materials of this course are drawn from a number of books and sources. However, most of the study units, except for three of them, are largely organized along the lines of developed countries (Units 3 and 4), developing countries (Unit 5), East Asian countries/areas (Units 5, 6 and 7), and international political economy (Units 8 and 9). The three exceptions are: Unit 1 Introduction; Unit 2 Market failure and government failure; and Unit 10 Managing business-government relations.

1. Introduction. In this unit, we introduce and explain the interdisciplinary nature of the course, and the basic concepts and terminology we'll be using. We describe briefly the various economic theories. We then explain, again briefly, the role of business and government in a nation's economy. Finally, we introduce the topic of international political economy. This introductory unit essentially introduces the subject matter that will be dealt with in subsequent units.
2. Market failure and government failure. The major components of Adam Smith's theory are the laws of supply and demand, and competition. The 'market' will take care of things. But sometimes the 'market' fails. John Maynard Keynes' theory emphasizes the complementary role of the government in the economy. But the government can also fail. This unit evaluates these two theories and tries to provide an alternative, which is not perfect either.
3. Government and business in advanced countries I: National systems, and government as manager and owner. Every country's economic system is different. This unit deals with the economic systems of some of the advanced countries — Britain, the US, Germany, and Japan, but only in regard to these governments' role as a manager, or owner/operator. This unit also discusses the overall trend towards deregulation and privatization in these countries and its impact on the rest of the world.
4. Government and business in advanced countries II: Government as promoter and regulator. This unit is a continuation of Unit 3. It deals with the role of government as a promoter and regulator. It provides a rationale for regulation. The regulation of the work place (for the welfare of workers), and the protection of consumers and the environment are particularly emphasized.
5. Late development, and newly industrializing East Asian countries. This unit identifies the major problems for developing countries in achieving economic development. It explains the special role of the state in cases in which economic development is lagging behind. It discusses the strategic industrial policies and concrete action plans of the newly industrializing East Asian countries.
6. Government-business relations in Hong Kong, mainland China, and Taiwan. While Unit 5 deals with the role of business and government in developing and East Asian countries in general, this unit deals with mainland China, Hong Kong and Taiwan in particular. It also discusses the importance of the economy of a potential Greater China (encompassing mainland China, Hong Kong and Taiwan). Emphasis is also placed on the negligence of environmental protection by all three.
7. Re-examining the East Asian development model. Parts of Unit 5 and Unit 6 convey, at least indirectly, the success story of several East Asian countries in economic development, which is largely based on the so-called 'developmental model' or 'developmental state theory'. Then came the 1997 Asian financial crisis, which brought most of these hitherto viable economies into trouble. This unit thus re-examines the theory of a developmental state or developmental model.
8. International political economy I: Theories and institutions. A national economy does not operate in isolation. As long as there is foreign trade or international commerce, a nation's economy is subject to the influences of other countries' trade and foreign policies, and the influences of international economic and financial institutions. In sum, this unit deals with international political economy. It includes a discussion of the different theories on international trade, international economic and financial institutions, and the role of multinational corporations.
9. International political economy II: Cooperation, competition and governance. This unit is a continuation of Unit 8. It discusses competition, cooperation and regulation in international trade. Special emphasis is given to types and effectiveness of various trade barriers, and competition between developed countries and between developed and developing countries. Due to the globalization of the economy, the viability of nation-states is also evaluated.
10. Corporations, government and society. The final unit, Unit 10, analyses corporate governance, the changing business environment and businesses' responses to the changing environment. Most importantly, this unit discusses the relationship between business and society. With the recent Enron case, special emphasis is placed on business ethics and responsibility to society.

Set textbook

As an upper level course, there is one textbook for PUAD A302. It is:

Gilpin, R (2001) Global Political Economy: Understanding the International Economic Order, Princeton, NJ: Princeton University Press.

Gilpin's book provides a perspective on the international political economy. It is in this environment that international commerce or transactions take place.

Supplementary readings

Besides the set textbook, there are some additional readings. They will be appended to the appropriate study units.

However, in order to maximize your learning from this course, it is advisable that you read on a regular basis at least one of the following: Asian Wall Street Journal (www.wsj.com), The Economist (www.economist.com), Financial Times (www.ft.com) or the South China Morning Post (www.scmp.com). These publications carry a great deal of material related to the study of government and business, and they will keep you informed about current events. China Daily and other newspapers published in Hong Kong are also useful. The key point is that you have to read a newspaper or magazine on a regular basis, and that you try to make sense of what you read in that newspaper or magazine based on what you have learned from this course.

Assignment File

There are four assignments for this course. Each deals with some important aspects covered by this course. I have tried to introduce different types of assignments, which encourage the development of different skills. They involve: the application of analytical concepts to real-world problems; descriptive and perceptual analysis; collecting, analysing and synthesizing data, and rendering dispassionate opinions; using international or comparative perspectives; and writing an essay.

Presentation Schedule

The Presentation Schedule is available on the Online Learning Environment (OLE). It gives you the dates for completing assignments, and attending tutorials and day schools, and so on.

Assessment

Assignments

There are four assignments. You will be assessed on your ability to understand and apply concepts, and to analyse and process information from relevant materials. For full details on the assignment questions and the deadlines for submission, please refer to your Assignment File.

Final examination and grading

There will be a three-hour written examination. The written examination carries 50% of the total marks for the course.

The written examination will be in two parts. In the first part there will a series of short answer questions from which you will be able to select. The second part will be in essay form, with four questions from which you can choose two.

For the assignments and the final examination, I shall tell you what we are looking for in a good answer. We are looking for critical thinking, pertinence, good organizational skills, clear presentation, evidence of reading and independent thought, and good writing. Although creativity is a rare commodity, try to surprise your instructor.

Course marking scheme

Course overview

The table shows the units, the time needed to complete them, and the assignments.

This course deals with government and business. Governments and businesses everywhere are constantly changing. In 1978, for example, China started its economic reforms that are still continuing. In 1989, Eastern European countries underwent drastic changes, and in 1991 the Soviet Union disappeared. In 1997, the architect of China's economic reforms, Deng Xiaoping, died. In July 1997 the Asian financial crisis began, and its impacts are still being felt in some Asian countries — for example, Indonesia — even to this date. On September 11, 2001, Muslim terrorists conducted suicide attacks on the Twin Towers of the World Trade Center in New York City that totally destroyed the Twin Towers and killed thousands of people. The attack and destruction sent the US stock markets down and worsened an economy already in a downturn. As the country went into recession, all previous doubts became irrelevant. In December 2001, both China and Taiwan joined the World Trade Organization, after years of frustration in applying for admission. Their participation in the WTO will have significant impacts on their economic as well as political relations. In December 2001, Enron, once the seventh largest company in the Fortune 500, sought bankruptcy protection. This hurt the financial markets in the US and also had repercussions in other parts of the world. The Enron case has raised all kinds of questions about government-business collusion, business ethics, accounting and auditing systems, the greed of top company executives, the proper role of the board of directors, auditors, lawyers, etc. In May 2003, Liu Jinbao, Chief Executive of the Bank of China (BOC) in Hong Kong, was removed and under investigation for corrupt lending to a Shanghai real-estate tycoon Zhou Zhengyi (or known as Chou Ching-ngai in Hong Kong). The BOC incident raised the issue of collaborative relationships between government and business, often resulting in bad lending from China's state-owned banks to the entrepreneurs favoured by government or bank officials.

Obviously, to get the most from the course you will need to keep up with events as they happen. To this effect, I have recommended that you need to read a good newspaper or magazine on a regular basis. Alternatively, but less effective, you could follow news programmes on television and on the radio on a regular basis. Do not forget that the Internet carries much information, both in factual form and in opinion, and it is fun to log on and find it. The Internet has another advantage books and journals do not usually enjoy. The information provided there is usually very current. Information contained in a book or magazine is usually dated. Integrating what you have studied from the textbooks and study units with current events is the best way to learn this subject. Tutors and tutorials are also helpful, as you'll see below.

Tutors and tutorials

There will be 12 two-hour tutorials. You will be notified of their dates, times and location.

Tutorials are a wonderful opportunity to exchange your ideas with others and to interact in a meaningful way. Of course, such exchanges must have structure and purpose, allowing you to explore the themes under consideration. Remember we have a special telephone tutoring service where you can talk through any problems you might experience. Do not be shy in contacting these people should you feel that you need any assistance.

PUAD A302 Government and Business is a course integrating political science and economics; that is, it's an interdisciplinary course. It emphasizes the relationship between government and business, since both are dynamic and stimulating. You will be able to find something interesting and important about them every single day in the news media. I genuinely believe that you will enjoy this course and find that it helps you in all kinds of ways. Not least, it will allow you to understand more fully the environment in which we all live and work. As you begin to explore the exciting world of government and business, all we can say is enjoy it and good luck to you in your journey.

Richard Y Chuang is Emeritus Professor of Political Science and Emeritus Dean of the College of Arts and Sciences at Northern State University (NSU), Aberdeen, South Dakota. He was a Fulbright Professor at Beijing Foreign Studies University, 1976–77. He was Sasakawa Fellow, Bush Fellow at Harvard University's Institute for Educational Management, Scholar at the US Department of State, and former president of the Association of Chinese Social Scientists in North America. He is the author of The International Air Transport Association: A Case Study of a Quasi-Government Organization (Leyden, The Netherlands: A W Sijthoff), co-author of The Politics of Hong Kong's Reversion to China (New York: St. Martin's Press; London: Macmillan, 1998), and course developer of Introduction to Political Science, The Open University of Hong Kong, 2001.