scholarly journals Economics versus politics: pitfalls of policy advice

2013 ◽  
pp. 4-28
Author(s):  
D. Acemoglu ◽  
J. Robinson
Keyword(s):  
Political Economy ◽  
Economic Policy ◽  
Economic Efficiency ◽  
Policy Making ◽  
Market Failure ◽  
Careful Analysis ◽  
Economic Policies ◽  
Market Failures ◽  
Main Message ◽  
The Impact

The standard approach to policy making and advice in economics implicitly or explicitly ignores politics and political economy and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be incorrect; because it ignores politics, this approach is oblivious to the impact of the removal of market failures on future political equilibria and economic efficiency, which can be deleterious. We first outline a simple framework for the study of the impact of current economic policies on future political equilibria — and indirectly on future economic outcomes. We then illustrate the mechanisms through which such impacts might operate using a series of examples. The main message is that sound economic policy should be based on a careful analysis of political economy and should factor in its influence on future political equilibria.

scholarly journals Economics versus Politics: Pitfalls of Policy Advice

2013 ◽  
Vol 27 (2) ◽  
pp. 173-192 ◽  
Author(s):  
Daron Acemoglu ◽  
James A Robinson
Keyword(s):  
Political Economy ◽  
Economic Policy ◽  
Economic Efficiency ◽  
Policy Making ◽  
Market Failure ◽  
Careful Analysis ◽  
Economic Policies ◽  
Market Failures ◽  
Main Message ◽  
The Impact

The standard approach to policy making and advice in economics implicitly or explicitly ignores politics and political economy and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be incorrect; because it ignores politics, this approach is oblivious to the impact of the removal of market failures on future political equilibria and economic efficiency, which can be deleterious. We first outline a simple framework for the study of the impact of current economic policies on future political equilibria—and indirectly on future economic outcomes. We then illustrate the mechanisms through which such impacts might operate using a series of examples. The main message is that sound economic policy should be based on a careful analysis of political economy and should factor in its influence on future political equilibria.

Economic Policy and Class Structure in Syria: 1958–1980

1984 ◽  
Vol 16 (3) ◽  
pp. 301-323 ◽  
Author(s):  
Syed Aziz-al Ahsan
Keyword(s):  
Economic Policy ◽  
Foreign Trade ◽  
Social Stratification ◽  
Class Structure ◽  
Economic Policies ◽  
Land Reforms ◽  
The Impact

It is indeed an interesting endeavor to investigate the impact of economic policies on social stratification. Doing so enables us to see to what extent economic policies bring changes in class structure in a society. We take the case of Syria to study its economic policies and their accompanying impact on the evolving pattern of the Syrian elite from the late 1950s to the early 1980s and then look at accompanying impact on class structure.The two poles or aspects of this paper are (1) economic policies themselves and (2) their impact on class structure. The question that we are going to raise in the first pole is the following: what is the nature of the economic policies? This refers to land reforms, industrial and commercial reforms, and foreign trade controls.

scholarly journals Government Failures in Development

1990 ◽  
Vol 4 (3) ◽  
pp. 9-23 ◽  
Author(s):  
Anne O Krueger
Keyword(s):  
Developing Countries ◽  
Market Failure ◽  
The Political ◽  
Economic Policies ◽  
Market Failures ◽  
Political Arena ◽  
Positive Theory ◽  
Government Behavior ◽  
Government Failure ◽  
The Government

By the 1970s and early 1980s, governments in most developing countries were mired down in economic policies that were manifestly unworkable. Whether market failures had been present or not, most knowledgeable observers concluded that there had been colossal government failures. In many countries, there could be little question but that government failure significantly outweighed market failure. This essay focuses on insights relating directly to government behavior affecting economic activity and economic growth in developing countries. It briefly examines each of the following questions: 1) What is “the government”? 2) What is the comparative advantage of government? 3) What are the dynamics of government intervention? 4) Can a positive theory of political behavior be formulated that will help explain when and how alternative policies will evolve in the political arena?

scholarly journals Stabilization Policies and Technological Shocks: Towards a Sustainable Economic Growth Path

2019 ◽  
Vol 11 (1) ◽  
pp. 205 ◽  
Author(s):  
Anelí Bongers ◽  
Carmen Díaz-Roldán
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Policy Making ◽  
Sustainable Growth ◽  
Economic Policies ◽  
Long Run ◽  
Short Run ◽  
Stabilization Policies ◽  
Development Goals ◽  
Sustainable Economic Growth

The purpose of this paper is to explore the extent to which traditional economic policies can be oriented by sound practices. It is becoming widely accepted that sustainable economic growth (and not only economic growth) is the final target of economic policies, but some economic policies are applied just looking to the short-run without taking in account the long-run perspective. Our aim is to show how a sustainable economic policy-making would be possible, making compatible the stabilization of the economy in the short-run with a sustainable economic growth in the long-run. We confront the design of economic policies with the 17 goals of the 2030 Agenda. We argue that all sustainable development goals can be attained by the design and implementation of sustainable economic policies. Finally, to illustrate this point, we will conduct a simulation exercise to show under which combinations of demand policies technological shocks would promote a path of sustainable growth. Our results will provide a reference framework for a sustainable economic policy-making.

Who Supports Global Economic Engagement? The Sources of Preferences in American Foreign Economic Policy

2011 ◽  
Vol 65 (1) ◽  
pp. 37-68 ◽  
Author(s):  
Helen V. Milner ◽  
Dustin H. Tingley
Keyword(s):  
Political Economy ◽  
Economic Policy ◽  
Foreign Policy ◽  
House Of Representatives ◽  
Foreign Economic Policy ◽  
Economic Aid ◽  
Theoretical Predictions ◽  
Trade Preferences ◽  
Economic Engagement ◽  
The Impact

AbstractIn this article we bring together opposing international relations theories to better understand U.S. foreign policy, in particular foreign trade and aid. Using votes in the U.S. House of Representatives from 1979–2004, we explore different theoretical predictions about preferences for foreign economic policy. We assess the impact of domestic factors, namely political economy and ideological preferences, versus foreign policy pressures. Our three main results highlight the differential effect of these factors in the two issue areas. First, aid preferences are as affected by domestic political economy factors as are trade preferences. Second, trade preferences, but not economic aid ones, are shaped by the president's foreign policy concerns; for economic aid, domestic political economy factors matter more than foreign policy ones. Third, aid preferences are shaped more by ideological factors than are trade ones, but ideology plays a different substantive role in each. Different constituencies support aid and trade. This finding has implications for foreign policy substitutability, “the internationalist coalition” in U.S. foreign policy, “statist” theories of foreign policy, and the connection between public opinion and legislative voting.

1. The Study of Global Political Economy

2016 ◽  
Author(s):  
John Ravenhill
Keyword(s):  
Political Economy ◽  
Interwar Period ◽  
Global Financial Crisis ◽  
Economic Policies ◽  
Global Political Economy ◽  
Developed Economies ◽  
The World ◽  
World Poverty ◽  
The Global Financial Crisis ◽  
The Impact

This volume provides an introduction to the field of Global Political Economy (GPE). It explores some of the approaches that have addressed the key concerns of theorists of GPE; for example. what conditions are most conducive to the emergence of collaborative behaviour among states on economic issues, or what are the determinants of the foreign economic policies of states. It examines various aspects of the debate about globalization as well as the impact of globalization on world poverty, inequality, and the environment. It also considers how globalization has changed the relations between industrialized and less developed economies. This chapter discusses the global financial crisis and the world economy pre-1914, in the interwar period, and post-1945. It also analyses the emergence of GPE as a field and describes a number of approaches to the study of GPE.

Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence

2019 ◽  
Vol 26 (8) ◽  
pp. 1344-1357 ◽  
Author(s):  
Cem Işık ◽  
Ercan Sirakaya-Turk ◽  
Serdar Ongan
Keyword(s):  
United States ◽  
Economic Policy ◽  
Explanatory Power ◽  
The United States ◽  
Policy Uncertainty ◽  
Economic Policies ◽  
Tourism Demand ◽  
Economic Policy Uncertainty ◽  
Demand Models ◽  
The Impact

The global economic outlook is more uncertain than ever before and sensitive to uncertainties related to a variety of economic policies decisions of all stakeholders and governments. These perceived uncertainties may be the culprit in shrinking the size of overall economic activity. Under increasing uncertainties, travel and vacation plans of consumers can be canceled or postponed. Therefore, policy-related economic uncertainties are expected to affect tourism demand beyond well-established economic and noneconomic factors. In this study, we explore the efficacy and the impact of the economic policy uncertainty (EPU) index in predicting the tourism demand on international tourist arrivals (a measure of tourism demand) to the United States from Mexico and Canada over the period of January 1996–September 2017. The findings of the study reveal that EPU is a significant predictor as increases in the EPU index lead to decreases in tourism demand to the United States. Canadian tourists seem to be more sensitive to EPUs. Increases in the EPU index cause them to reduce Canadians’ vacations to the United States proportionally more than the Mexicans. To enhance the explanatory power of current models, the uncertainty can be a theoretically significant construct thus needs to be included when calibrating demand models.

An Evolutionary Theory of Economic Policy. Part II: The Necessity of Timely Switching

2006 ◽  
pp. 46-64 ◽  
Author(s):  
V. Polterovich ◽  
V. Popov
Keyword(s):  
Economic Policy ◽  
Gdp Per Capita ◽  
Development Economic ◽  
Small Enterprises ◽  
Economic Policies ◽  
Developed Economies ◽  
Stage Of Development ◽  
Catch Up ◽  
Per Capita ◽  
The Impact

This is the second part (first part: Voprosy Ekonomiki, 2006, No 7) of the work on how economic policy of a developing country should change as it approaches the level of developed economies in terms of welfare (GDP per capita) and the quality of institutions. We focus on the impact of several policies to promote the catch up development: the speed of foreign exchange reserves accumulation ("exchange rate protectionism"); import tariffs; measures to attract foreign direct investment; import of technology versus indigenous R&D; regulation of migration and measures to support large versus small enterprises. The econometric analysis of the data on over 200 countries in 1975-1999 shows that the impact of these policies may be positive or negative depending on a stage of development; in each case we find threshold levels or critical combinations of GDP per capita and/or an institutional quality indicator. Thus, there is additional evidence to support the conclusions made in the first part of the article and based on the analysis of the evolution of economic policies in the Western countries and in the countries of successful catch up development ("economic miracles").

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