The Impact of the Political and Economic Systems on the Society - Research Paper

Paper Type:  Research paper
Pages:  6
Wordcount:  1567 Words
Date:  2022-04-16


Politics and economics are two sides of the same coin and inseparable. In the current economic or political discourse, people may tend to reject the other depending on their interests. For instance, if the interest is in economic aspects, people's attention shifts to matters and news dealing with economics and excludes politics and vise versa. However, politics and economics are so intertwined and as much as people might neglect economics and talk politics, it is not viable. Therefore, the political and economic systems of a nation have a huge impact on the society. For example, the economic future of millennials is determined by the present system of elections. Likewise, in the last few years, the world has experienced how political events have become a key determinant in evaluating economic factors. Economists now explore and evaluate the political business cycles. They not only study the monetary and technological shocks, but also the shocks emanating from political nature. With this note, the paper will evaluate the impact of political and economic systems on the US, Chinese, and Kenyan societies.

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The United States

The US has a market-driven economic system whereby individuals, labor organizations, businesses, and social institutions play different roles in the economy. In a market economy, the private sector and businesses determine what, how and when to produce goods and services without the government intervention. The US is widely renowned because of its capitalistic economic system. Therefore, in the United States of America, the general public has numerous roles; they function as workers, consumers, investors, and savers (Heppen & Otterstrom, 2011). Most importantly people vote for political leaders (policy makers) and public policy.

In the political arena, there are two major parties that compete for the government jobs that are the Democrats and Republicans. In the recent presidential campaigns, the Republicans won the race and President Trump ascended into power. The Democrats presidential runner came in second. Currently, the Republicans in the Congress are many than Democrats. The election of Donald Trump created a ripple economic effect in the global economies. The presidential policies implemented by Trump have had severe economic effects. Presently, there is a trade war with China after Trump initiated tariffs against the Chinese products which may also affect US goods too (Yueh, 2018). Economically, the US is ranked among the countries with the highest income and wealth disparities. Therefore, the trade-war with China has an impact on the poor Americans who could only afford cheap imports from China. On the other hand, the economic and political system of the US has promoted gender and ethnic inequality. Women earn 78% of a dollar as compared to their male counterparts (Heppen & Otterstrom, 2011). Furthermore, women are underrepresented in top-level management and in the fields of engineering, aerospace, science, and mathematics. Besides, there is a growing concern about the wage inequality, especially for women. Women in the same level jobs as men are underpaid. On the other hand, the poverty index ranks the Native Americans and Blacks as ethnic groups highly affected by poverty accounting to 27% and 25.8% respectively. Hispanics minority groups follow suit with 23.2% (Lankford, 2013). Therefore, the political and economic systems have somehow neglected the women and minority groups because most policies positively impact the upper-middle income US society. Nonetheless, the economic and political nature of the US has made it the leader of the free world due to a strong military, foreign policies and economic output.


China is the second-largest economy and the largest country by population in the world. As of 2016, the Chinese population was 1.379 billion people (Guo, 2016). Apart from that, China has a distinct political and economic system as compared to the West. China is a nation of growing political and economic significance in the global affairs. Politically, China pretends to be a multi-party democracy with eight minor registered parties. In essence, China is ruled by one party that is the Communist Party of China (CPC) (Guo, 2016). All the minor political parties agree with the leadership of the CPC. In the last few weeks, China was in the spotlight after the communist party delegates voted for the elimination of the presidential term limits. The current president Xi Jinping will rule China until he decides to retire or even until death (Campbell, 2018). President Jinping has acquired more power that has never been experienced since the reign of Mao Zedong. The Communist Party has abandoned the collective leadership style in favor of strongman, and President Xi Jinping has proven to be a powerful leader (Campbell, 2018). The Chinese political arena has a significant influence on the country's economic performance. Although a socialist or communist government, China uses a mixed-economy economic system. The type of economic system implies that China uses both a capitalist and command form of governance. China has both state-run and private businesses which have steered the economy towards economic growth and development (Rongxing, 2009).

Unlike the western form of governance, the strong communist government has implemented policies that favor Chinese industries and businesses. The government encourages the funding of local industries and businesses to encourage entrepreneurship and economic performance. Presently, China is the largest exporter and the country that has the highest foreign reserve currency accounting to $3 trillion US dollars (Guo, 2016). As a result, the economic and political incentives undertaken by the Chinese government have lowered the rate of unemployment and poverty in China. The poverty rate in China was 6.5% in 2012 (Guo, 2016). On the other hand, the Communist Party has denied the Chinese the freedom of expression due to autocratic leadership and the state manages media outlets. Nevertheless, the political and economic system has favored economic growth for every Chinese and non-Chinese people.


Kenya is an African country that is the largest economy in East Africa. The country is a gateway to landlocked countries such as Uganda, Burundi, and Rwanda because imported goods pass through the Kenyan coastal port of Mombasa. The country has a population of 45 million people (Pateman & Elias, 2014). Most importantly, the country is renowned for its strong democracy in Africa. The country runs a capitalist or market-driven economy. The political and economic institutions are intertwined because the policies implemented by the government affect economic performance. During 2017, the country experienced the longest political competition in preparation for general elections that led to ethnic/tribal divisions in the country and a slow-down in the economy (Business Daily, 2018). The greatest impact was felt when President Uhuru Kenyatta's election was annulled by the Supreme Court that led to the Nairobi Security Exchange to lose at least 50 billion Kenyan Shillings or $500 million (Amadala, 2017). However, after a second presidential election, Uhuru Kenyatta retained his seat and the country is back on an economic and political healing. The Kenyan government is criticized for lack of equal tribal representation in the government's positions and in the public service sector. Tribal politics is always on the list of the agenda during the general elections held every five years.

However, Kenya's political and economic system has done little to address the rising inequality in the country. The gap between the rich and the poor is on the rise. Besides, the country is experiencing a growth in the middle-class especially the urban and suburban dwellers. Moreover, Kenyans are recognized as highly entrepreneurial people and the government is working hard to promote the manufacturing sector instead of the over-reliance on agriculture, which is the backbone of the economy. For instance, Volkswagen established a vehicle assembly plant in Kenya, the third in Africa due to the country's economic potential. Other automakers such as Porsche, Toyota, Nissan, BMW, and GM East Africa have offices in Kenya, a factor associated with the rising middle-class with a large spending power (Pateman & Elias, 2014). Political stability in Kenya leads to economic growth, development, and stability, hence important systems in running the country.


In summation, the political and economic systems are vital components of any economy in the world. Apart from the economic activities, politics and economics can be classified as the backbone of a country because a stable political system leads to economic stability, growth, and development. From the above case study of the US, China, and Kenya, it is evident that politics and economics are two sides of the same coin and inseparable. The public policy incentives determine the economic outlook and have a significant impact on the society. Therefore, positive economic and political policies have a positive impact on the society because they promote equality, eliminate poverty and enhance entrepreneurial growth.


Amadala, V. (Nov 21, 2017). NSE, Shilling triumph in Supreme Court ruling. The Star, Kenya. Retrieved 5 April 2018, from

Business Daily. (Jan 21, 2018). How economics can help bridge the political divide.Retrieved 5 April 2018, from

Campbell, C. (March 12, 2018). Why China's Xi Jinping May Have to Rule for Life. Time. Retrieved 5 April 2018, from

Heppen, J., & Otterstrom, S. (2011). Geography, history, and the American political economy. Lanham: Lexington Books.

Lankford, R. (2013). What is the future of the US economy?. Farmington Hills, Mich.: Greenhaven Press.

Guo, R. (2016). How the Chinese Economy Works: A Multiregional Overview (4th ed.). Palgrave Macmillan.

Pateman, R., & Elias, J. (2014). Kenya. New York, NY: Cavendish Square.

Rongxing, G. (2009). Political-Economic Systems in Transition. How the Chinese Economy Works, 66-98. Doi:10.1057/9780230245686_4

Yueh, L. (2018). How a US-China trade war would hurt us all | Linda Yueh. the Guardian. Retrieved 5 April 2018, from

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