Politics and Economics: An Interdisciplinary Perspective
It seems as though politicians are ever-changing. The recent wave of liberalization in the developing countries and even in formerly authoritarian ones have led to renewed interest in this relationship between politics and economics. There is a growing consensus that in order to achieve economic development in a country, political policies should be given a high priority.
As the number of countries where economic development has been a major concern grows, there is an increase in the number of economists who have started to take a closer look at this connection between political and social policy. Political economic policy has been studied by several authors of different fields who argue that while the economic aspects of a country may not be important to the stability and prosperity of a country’s political system, it can play an important role in shaping political behavior and even, in some cases, even in determining the future course of political events.
The various economic theories put forth in this regard include those based on the concept of public goods and the theory of economic rent. These theories assume that the presence of any specific resource in a society determines the political preferences of citizens who live in that area. This theory can also explain why certain groups often vote according to their interests while others do so based on ethnic or religious grounds.
Another type of theory put forward by various economists is one that examines how the distribution of power is affected by different types of institutions. Different types of institutions that affect the political landscape of a country include political parties, elected bodies, labor unions, and political systems, among others. Many of these models argue that if the political system is set up in such a way that political leaders have less power compared to other individuals, the power of this group will determine its political behavior.
Even though political economic theory is still relatively young, many experts feel that it holds much promise for countries that are facing challenges in terms of economic growth and development. The increasing importance of economic policies to a country’s political life has led to an increase in international collaboration and interaction. In fact, many scholars of this field feel that economic research and theory should become more integrated with the international development in order to better serve the political agenda of developing nations.
Although politics and economics are often viewed as separate entities, many economists agree that both are interrelated in that they are closely intertwined with each other. There are several factors that determine the future course of political development and the impact that politics has on economies, including the role of government, the degree of political stability and legitimacy, the extent of the involvement of private capital in politics, and economic incentives such as tax incentives and the existence of international institutions and trade policy.