Political Economy

Political economy studies how political institutions, collective choices, and power shape economic outcomes and how economic incentives, inequality, and shocks in turn reshape politics.

Overview

Political economy connects markets to the rules that govern them, from laws and regulation to taxation, public spending, and redistribution, and asks why these policies vary across places and time and who ultimately gains or loses from them. In doing so, it examines how voters, parties, bureaucracies, firms, unions, and the media interact to set policy and allocate resources. Using both theory and data, political economy helps explain patterns in growth, welfare, public goods provision, corruption, conflict, and development. Overall, it shows how economies and political systems co-evolve, and what that means for sound policy design and institutional reform.