Political Economy (Explanation of Economic Policies)

Author: Perotti, Tabellini, translated by Fang Min et al.
Publisher:
Publish Date: 2007-01-01
Features: What determines the quantity and form of redistribution plans, the scope and type of public goods provision, the tax burden of different tax bases, the size of government deficits, and the state of monetary policy during business cycles and election cycles? A large body of literature in the field of political economics has attempted to answer these questions. However, so far, there has been no consensus on appropriate analytical models or answers to these issues. Perotti and Tabellini combine the essence of three academic traditions—macroeconomic policy theory, public choice theory, and rational choice theory in political science—to propose a unified analytical approach. As in modern macroeconomics, the behavior of individual citizens is rational, and their preferences for economic outcomes lead to preferences for policies. Like public choice theory, granting political decision-making power to elected representatives may give rise to agency problems between voters and politicians. In rational choice theory, political institutions determine the processes for making policies and electing rulers. The two authors outline a general analytical approach for us, prove several new conclusions, and point out the main unresolved issues. The readership of this book includes economists or political scientists who wish to learn about recent developments in political economics, as well as graduate students in economics or political science, and also upper-level undergraduate students. Although the book is self-contained and most introductions to concepts and methods are presented in a step-by-step manner, readers are expected to have a certain background in microeconomics, macroeconomics, and the application of game theory. This book provides a core textbook for graduate courses and will become the standard reference for scholars in this field.