Political economy approach
Current approaches[edit]
Robert Keohane, international relations theorist
In its contemporary meaning, political economy refers to different, but related, approaches to studying economic and related behaviours, ranging from the combination of economics with other fields to the use of different, fundamental assumptions that challenge earlier economic assumptions:
Political economy most commonly refers to interdisciplinary studies drawing upon economics, sociology, and political science in explaining how political institutions, the political environment, and the economic system—capitalist, socialist, or mixed—influence each other.[6] The Journal of Economic Literature classification codes associate political economy with three subareas: the role of government and/or power relationships in resource allocation for each type of economic system,[7] international political economy, which studies the economic impacts of international relations,[8] and economic models of political processes.[9] The last area, derived from public choice theory and dating from the 1960s, models voters, politicians, and bureaucrats as behaving in mainly self-interested ways, in contrast to a view, ascribed to earlier economists, of government officials trying to maximize individual utilities from some kind of social welfare function.[10] An early and continuing focus of that research program is what came to be called constitutional political economy.[11]
Economists and political scientists often associate political economy with approaches using rational-choice assumptions,[12] especially in game theory,[13] and in examining phenomena beyond economics' standard remit, such as government failure and complex decision making in which context the term "positive political economy" is common.[14] Other "traditional" topics include analysis of such public policy issues as economic regulation,[15] monopoly, rent-seeking, market protection,[16] institutional corruption,[17] and
Robert Keohane, international relations theorist
In its contemporary meaning, political economy refers to different, but related, approaches to studying economic and related behaviours, ranging from the combination of economics with other fields to the use of different, fundamental assumptions that challenge earlier economic assumptions:
Political economy most commonly refers to interdisciplinary studies drawing upon economics, sociology, and political science in explaining how political institutions, the political environment, and the economic system—capitalist, socialist, or mixed—influence each other.[6] The Journal of Economic Literature classification codes associate political economy with three subareas: the role of government and/or power relationships in resource allocation for each type of economic system,[7] international political economy, which studies the economic impacts of international relations,[8] and economic models of political processes.[9] The last area, derived from public choice theory and dating from the 1960s, models voters, politicians, and bureaucrats as behaving in mainly self-interested ways, in contrast to a view, ascribed to earlier economists, of government officials trying to maximize individual utilities from some kind of social welfare function.[10] An early and continuing focus of that research program is what came to be called constitutional political economy.[11]
Economists and political scientists often associate political economy with approaches using rational-choice assumptions,[12] especially in game theory,[13] and in examining phenomena beyond economics' standard remit, such as government failure and complex decision making in which context the term "positive political economy" is common.[14] Other "traditional" topics include analysis of such public policy issues as economic regulation,[15] monopoly, rent-seeking, market protection,[16] institutional corruption,[17] and