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Jean-Jacques Rousseau, Discours sur l'oeconomie politique, 1758
Political economy is a term used for studying production and trade, and their re
lations with law, custom, and government, as well as with the distribution of na
tional income and wealth. Political economy originated in moral philosophy. It w
as developed in the 18th century as the study of the economies of states, or pol
ities, hence the term political economy.
In the late 19th century, the term economics came to replace political economy,
coinciding with the publication of an influential textbook by Alfred Marshall in
1890.[1] Earlier, William Stanley Jevons, a proponent of mathematical methods a
pplied to the subject, advocated economics for brevity and with the hope of the
term becoming "the recognised name of a science."[2][3]
Today, political economy, where it is not used as a synonym for economics, may r
efer to very different things, including Marxian analysis, applied public-choice
approaches emanating from the Chicago school and the Virginia school, or simply
the advice given by economists to the government or public on general economic
policy or on specific proposals.[3] A rapidly growing mainstream literature from

the 1970s has expanded beyond the model of economic policy in which planners ma
ximize utility of a representative individual toward examining how political for
ces affect the choice of economic policies, especially as to distributional conf
licts and political institutions.[4] It is available as an area of study in cert
ain colleges and universities.
Contents [hide]
1
Etymology
2
Current approaches
3
Related disciplines
4
See also
5
Notes
6
References
7
Journals
8
External links
Etymology[edit]
Originally, political economy meant the study of the conditions under which prod
uction or consumption within limited parameters was organized in nation-states.
In that way, political economy expanded the emphasis of economics, which comes f
rom the Greek oikos (meaning "home") and nomos (meaning "law" or "order"). Thus,
political economy was meant to express the laws of production of wealth at the
state level, just as economics was the ordering of the home. The phrase conomie p
olitique (translated in English as political economy) first appeared in France i
n 1615 with the well-known book by Antoine de Montchrtien, Trait de l economie polit
ique. The French physiocrats, along with Adam Smith, John Stuart Mill, David Ric
ardo, Henry George, and Karl Marx were some of the exponents of political econom
y. The world's first professorship in political economy was established in 1754
at the University of Naples Federico II, Italy (then capital city of the Kingdom
of Naples). The Neapolitan philosopher Antonio Genovesi was the first tenured p
rofessor. In 1763, Joseph von Sonnenfels was appointed a Political Economy chair
at the University of Vienna, Austria. Thomas Malthus, in 1805, became England's
first professor of political economy, at the East India Company College, Hailey
bury, Hertfordshire. Glasgow University, where Adam Smith had been Professor of
Logic and of Moral Philosophy, changed the name of its Department of Political E
conomy to the Department of Economics (ostensibly to avoid confusing prospective
undergraduates), in the academic year 1997 98. This left the class of 1998 as the
last to be graduated with a Master of Arts in Political Economy.
In the United States, political economy first was taught at the College of Willi
am and Mary, where in 1784, Smith's The Wealth of Nations was a required textboo
k.[5]
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 combin
ation of economics with other fields to the use of different, fundamental assump
tions that challenge earlier economic assumptions:
Political economy most commonly refers to interdisciplinary studies drawing upon
economics, sociology, and political science in explaining how political institu
tions, the political environment, and the economic system
capitalist, socialist,
or mixed influence each other.[6] The Journal of Economic Literature classifica
tion codes associate political economy with three subareas: the role of governme
nt and/or power relationships in resource allocation for each type of economic s
ystem,[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 v
oters, politicians, and bureaucrats as behaving in mainly self-interested ways,

in contrast to a view, ascribed to earlier economists, of government officials t

rying 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 appro
aches using rational-choice assumptions,[12] especially in game theory,[13] and
in examining phenomena beyond economics' standard remit, such as government fail
ure and complex decision making in which context the term "positive political ec
onomy" is common.[14] Other "traditional" topics include analysis of such public
policy issues as economic regulation,[15] monopoly, rent-seeking, market protec
tion,[16] institutional corruption,[17] and distributional politics.[18] Empiric
al analysis includes the influence of elections on the choice of economic policy
, determinants and forecasting models of electoral outcomes, the political busin
ess cycles,[19] central-bank independence, and the politics of excessive deficit
s.[20]
A recent focus has been on modeling economic policy and political institutions a
s to interactions between agents and economic and political institutions,[21] in
cluding the seeming discrepancy of economic policy and economist's recommendatio
ns through the lens of transaction costs.[22] From the mid-1990s, the field has
expanded, in part aided by new cross-national data sets that allow tests of hypo
theses on comparative economic systems and institutions.[23] Topics have include
d the breakup of nations,[24] the origins and rate of change of political instit
utions in relation to economic growth,[25] development,[26] backwardness,[27] re
form,[28] and transition economies,[29] the role of culture, ethnicity, and gend
er in explaining economic outcomes,[4] macroeconomic policy,[30] the environment
,[31] fairness,[32] and the relation of constitutions to economic policy, theore
tical[33] and empirical.[34]
New political economy may treat economic ideologies as the phenomenon to explain
, per the traditions of Marxian political economy. Thus, Charles S. Maier sugges
ts that a political economy approach "interrogates economic doctrines to disclos
e their sociological and political premises.... in sum, [it] regards economic id
eas and behavior not as frameworks for analysis, but as beliefs and actions that
must themselves be explained."[35] This approach informs Andrew Gamble's The Fr
ee Economy and the Strong State (Palgrave Macmillan, 1988), and Colin Hay's The
Political Economy of New Labour (Manchester University Press, 1999). It also inf
orms much work published in New Political Economy, an international journal foun
ded by Sheffield University scholars in 1996.[36]
International political economy (IPE) is an interdisciplinary field comprising a
pproaches to the actions of various actors. In the United States, these approach
es are associated with the journal International Organization, which in the 1970
s became the leading journal of IPE under the editorship of Robert Keohane, Pete
r J. Katzenstein, and Stephen Krasner. They are also associated with the journal
The Review of International Political Economy. There also is a more critical sc
hool of IPE, inspired by thinkers such as Antonio Gramsci and Karl Polanyi; two
major figures are Matthew Watson and Robert W. Cox.[37]
Anthropologists, sociologists, and geographers use political economy in referrin
g to the regimes of politics or economic values that emerge primarily at the lev
el of states or regional governance, but also within smaller social groups and s
ocial networks. Because these regimes influence and are influenced by the organi
zation of both social and economic capital, the analysis of dimensions lacking a
standard economic value (e.g., the political economy of language, of gender, or
of religion) often draws on concepts used in Marxian critiques of capital. Such
approaches expand on neo-Marxian scholarship related to development and underde
velopment postulated by Andr Gunder Frank and Immanuel Wallerstein.
Historians have employed political economy to explore the ways in the past that
persons and groups with common economic interests have used politics to effect c
hanges beneficial to their interests.[38]
Political Economy and Law is a recent attempt within legal scholarship to engage
explicitly with political economy literature. In the 1920s and 30s, legal reali
sts (e.g., Robert Hale) and intellectuals (e.g., John Commons) engaged themes re

lated to political economy. In the second half of the 20th century, lawyers asso
ciated with the Chicago School incorporated certain intellectual traditions from
economics. Since the crisis in 2007, however, legal scholars especially related
to international law, have turned to more explicitly engage with the debates, m
ethodology and various themes within political economy texts.[39][40]
Related disciplines[edit]
Because political economy is not a unified discipline, there are studies using t
he term that overlap in subject matter, but have radically different perspective
s:
Sociology studies the effects of persons' involvement in society as members of g
roups, and how that changes their ability to function. Many sociologists start f
rom a perspective of production-determining relation from Karl Marx. Marx's theo
ries on the subject of political economy are contained in his book Das Kapital.
Anthropology studies political economy by investigating regimes of political and
economic value that condition tacit aspects of sociocultural practices (e.g., t
he pejorative use of pseudo-Spanish expressions in the US entertainment media) b
y means of broader historical, political, and sociological processes. Analyses o
f structural features of transnational processes focus on the interactions betwe
en the world capitalist system and local cultures.
Archaeology attempts to reconstruct past political economies by examining the ma
terial evidence for administrative strategies to control and mobilize resources.
[41] This evidence may include architecture, animal remains, evidence for craft
workshops, evidence for feasting and ritual, evidence for the import or export o
f prestige goods, or evidence for food storage.
Psychology is the fulcrum on which political economy exerts its force in studyin
g decision making (not only in prices), but as the field of study whose assumpti
ons model political economy.
History documents change, often using it to argue political economy; some histor
ical works take political economy as the narrative's frame.
Human geography at times draws on theories of politico-economic processes. Typic
ally under the moniker of political ecology, political ecology has been used by
geographers to understand human systems and their relationship with the environm
ent, broadly defined.[42]
Ecology deals with political economy, because human activity has the greatest ef
fect upon the environment, its central concern being the environment's suitabili
ty for human activity. The ecological effects of economic activity spur research
upon changing market economy incentives.
Cultural studies examines social class, production, labor, race, gender, and sex
.
Communications examines the institutional aspects of media and telecommuncation
systems. As the area of study focusing on aspects of human communication, it pay
s particular attention to the relationships between owners, labor, consumers, ad
vertisers, structures of production, and the state, and the power relationships
embedded in these relationships.
See also[edit]
Economic sociology
Economic study of collective action
Constitutional economics
European Association for Evolutionary Political Economy (EAEPE)
Economic ideology
Institutional economics
Land value tax
Law of rent
Important publications in political economy
Perspectives on Capitalism
Social model
Social capital
Notes[edit]
Jump up ^ Marshall, Alfred. (1890) Principles of Economics.

Jump up ^ Jevons, W. Stanley. The Theory of Political Economy, 1879, 2nd ed. p.
xiv.
^ Jump up to: a b Groenwegen, Peter. (1987 [2008]). "'political economy' and 'ec
onomics'", The New Palgrave: A Dictionary of Economics, v. 3, pp. 905-06. [Pp. 9
04 07.]
^ Jump up to: a b Alesina, Alberto F. (2007:3) "Political Economy," NBER Reporte
r, pp. 1-5. Abstract-linked-footnotes version.
Jump up ^ Image of "Priorities of the College of William and Mary"
Jump up ^ Weingast, Barry R., and Donald Wittman, ed., 2008. The Oxford Handbook
of Political Economy. Oxford UP. Description and preview.
Jump up ^ At JEL: P as in JEL Classification Codes Guide, drilled to at each eco
nomic-system link.
For example:
Brandt, Loren, and Thomas G. Rawski (2008). "Chinese economic reforms," The N
ew Palgrave Dictionary of Economics, 2nd Edition. Abstract.
Helsley, Robert W. (2008). "urban political economy," The New Palgrave Dictio
nary of Economics, 2nd Edition. Abstract.
Jump up ^ At JEL: F5 as drilled to in JEL Classification Codes Guide.
For example:
Gilpin, Robert (2001), Global Political Economy: Understanding the Internatio
nal Economic Order, Princeton. Description and ch. 1, " The New Global Economic
Order" link.
Mitra, Devashish (2008). "trade policy, political economy of," The New Palgra
ve Dictionary of Economics, 2nd Edition. Abstract.
Jump up ^ At JEL: D72 with context for its usage in JEL Classification Codes Gui
de, drilled to at JEL: D7.
Jump up ^
Tullock, Gordon ([1987] 2008). "public choice," The New Palgrave Dicti
onary of Economics. Abstract.
Arrow, Kenneth J. (1963). Social Choice and Individual Values, 2nd ed., ch. V
III, sect. 2, The Social Decision Process, pp. 106-08.
Jump up ^
Mueller, Dennis C. (2008). "constitutions, economic approach to,' The
New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
Buchanan, James M., and Gordon Tullock (1962). The Calculus of Consent. Unive
rsity of Michigan Press. Chapter-preview links.
Hayek, Friedrich A. (1973). Rules and Order, Description and chapter-preview
links.
Brennan, Geoffrey, and James M. Buchanan (1985). The Reason of Rules: Constit
utional Political Economy , Chicago. Chapter links, Econlib.
Buchanan, James M. (1990). "The Domain of Constitutional Economics," Constitu
tional Political Economy, 1(1), pp. 1-18.
Jump up ^ Lohmann, Susanne (2008). "rational choice and political science," The
New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
Jump up ^
Shubik, Martin (1981). "Game Theory Models and Methods in Political Ec
onomy," in K. Arrow and M. Intriligator, ed., Handbook of Mathematical Economics
, Elsevier, v. 1, pp. 285-330.
_____ (1984). A Game-Theoretic Approach to Political Economy. MIT Press. Desc
ription and review extract.
_____ (1999). Political Economy, Oligopoly and Experimental Games: The Select
ed Essays of Martin Shubik, v. 1, Edward Elgar. Description and contents of Part
I, Political Economy.
Peter C. Ordeshook (1990). "The Emerging Discipline of Political Economy," ch
. 1 in Perspectives on Positive Political Economy, Cambridge, pp. 9-30.
_____ (1986). Game Theory and Political Theory, Cambridge. Description and pr
eview.
Jump up ^ Alt, James E.; Shepsle, Kenneth (eds.) (1990), Perspectives on Positiv
e Political Economy (Cambridge [UK]; New York: Cambridge University Press). Desc
ription and content links and preview.
Jump up ^ Rose, N. L. (2001). "Regulation, Political Economy of," International
Encyclopedia of the Social & Behavioral Sciences, pp. 12967 12970. Abstract.
Jump up ^ Krueger, Anne O. (1974). "The Political Economy of the Rent-Seeking So

ciety," American Economic Review, 64(3), p. 291 303.

Jump up ^
Bose, Niloy. "corruption and economic growth," The New Palgrave Dictio
nary of Economics Online, 2nd Edition, 2010. Abstract.
Rose-Ackerman, Susan (2008). "bribery," The New Palgrave Dictionary of Econom
ics, 2nd Edition. Abstract.
Jump up ^
Becker, Gary S. (1983). "A Theory of Competition among Pressure Groups
for Political Influence," Quarterly Journal of Economics, 98(3), pp. 371-400.
Weingast, Barry R., Kenneth A. Shepsle, and Christopher Johnsen (1981). "The
Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive
Politics," Journal of Political Economy, 89(4), pp. 642-664.
Breyer, Friedrich (1994). "The Political Economy of Intergenerational Redistr
ibution," European Journal of Political Economy, 10(1), pp. 61 84. Abstract.
Williamson, Oliver E. (1995). "The Politics and Economics of Redistribution a
nd Inefficiency," Greek Economic Review, December, 17, pp. 115-136, reprinted in
Williamson (1996), The Mechanisms of Governance, Oxford University Press, ch. 8
, pp. 195-218.
Krusell, Per, and Jos-Vctor Ros-Rull (1999). "On the Size of U.S. Government: Po
litical Economy in the Neoclassical Growth Model," American Economic Review, 89(
5), pp. 1156-1181.
Galasso, Vincenzo, and Paola Profeta (2002). "The Political Economy of Social
Security: A Survey," European Journal of Political Economy, 18(1), pp. 1 29.
Jump up ^
Drazen, Allan (2008). "Political business cycles," The New Palgrave Di
ctionary of Economics, 2nd Edition. Abstract.
Nordhaus, William D. (1989). "Alternative Approaches to the Political Busines
s Cycle," Brookings Papers on Economic Activity, (2), pp. 1-68.
Jump up ^
Buchanan, James M. (2008). "public debt," The New Palgrave Dictionary
of Economics, 2nd Edition. Abstract.
Alesina, Alberto, and Roberto Perotti (1995). "The Political Economy of Budge
t Deficits," IMF Staff Papers, 42(1), pp. 1-31.
Jump up ^
Timothy, Besley (2007). Principled Agents?: The Political Economy of G
ood Government, Oxford. Description.
_____ and Torsten Persson (2008). "political institutions, economic approache
s to," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
North, Douglass C. (1986). "The New Institutional Economics," Journal of Inst
itutional and Theoretical Economics, 142(1), pp. 230-237.
_____ (1990). Institutions, Institutional Change and Economic Performance, in
the Political Economy of Institutions and Decisions series. Cambridge. Descript
ion and preview.
Ostrom, Elinor (1990). Governing the Commons: The Evolution of Institutions f
or Collective Action. Cambridge University Press. Description and preview links.
ISBN 9780521405997.
_____ (2010). "Beyond Markets and States: Polycentric Governance of Complex E
conomic Systems," American Economic Review, 100(3), pp. 641-72.
Jump up ^ Dixit, Avinash (1996). The Making of Economic Policy: A Transaction Co
st Politics Perspective. MIT Press. Description and chapter-preview links. Revie
w-excerpt link.
Jump up ^ Beck, Thorsten et al. (2001). "New Tools in Comparative Political Econ
omy: The Database of Political Institutions," World Bank Economic Review,15(1),
pp. 165-176.
Jump up ^ Bolton, Patrick, and Grard Roland (1997). "The Breakup of Nations: A Po
litical Economy Analysis," Quarterly Journal of Economics, 112(4), pp. 1057-1090
.
Jump up ^ Alesina, Alberto, and Roberto Perotti (1994). "The Political Economy o
f Growth: A Critical Survey of the Recent Literature," World Bank Economic Revie
w, 8(3), pp. 351-371.
Jump up ^ Keefer, Philip (2004). "What Does Political Economy Tell Us about Econ
omic Development and Vice Versa?" Annual Review of Political Science, 7, pp. 247 7
2. PDF.
Jump up ^ Acemoglu, Daron, and James A. Robinson (2006). "Economic Backwardness
in Political Perspective," American Political Science Review, 100(1), pp. 115-13

1.
Jump up ^
Mukand, Sharun W. (2008). "policy reform, political economy of," The N
ew Palgrave Dictionary of Economics, 2nd Edition. Abstract.
Sturzenegger, Federico, and Mariano Tommasi (1998). The Poltical Economy of Re
form, MIT Press. Description and chapter-preview links.
Jump up ^
Roland, Grard (2002), "The Political Economy of Transition," Journal of
Economic Perspectives, 16(1), pp. 29-50.
_____ (2000). Transition and Economics: Politics, Markets, and Firms, MIT Pre
ss. Description and preview.
Manor, James (1999). The Political Economy of Democratic Decentralization, Th
e World Bank. ISBN 9780821344705. Description.
Jump up ^ Drazen, Allan (2000). Political Economy in Macroeconomics, Princeton.
Description & ch. 1-preview link., and review extract.
Jump up ^
Dietz, Simon, Jonathan Michie, and Christine Oughton (2011). Political
Economy of the Environment An Interdisciplinary Approach, Routledge. Descriptio
n and preview.
Banzhaf, H. Spencer, ed. (2012). The Political Economy of Environmental Justi
ce Stanford U.P. Description and contents links.
Gleeson, Brendan, and Nicholas Low (1998). Justice, Society and Nature An Exp
loration of Political Ecology, Routledge. Description and preview.
John S. Dryzek, 2000. Rational Ecology: Environment and Political Economy, Bl
ackburn Press. B&N description.
Barry, John 2001. "Justice, Nature and Political Economy," Economy and Societ
y, 30(3), pp. 381 394.
Boyce, James K. (2002). The Political Economy of the Environment, Edward Elga
r. Description.
Jump up ^
Zajac, Edward E. (1996). Political Economy of Fairness, MIT Press Desc
ription and chapter-preview links.
Thurow, Lester C. (1980). The Zero-sum Society: Distribution and the Possibil
ities For Economic Change, Penguin. Description and preview.
Jump up ^
Persson, Torsten, and Guido Tabellini (2000). Political Economics: Exp
laining Economic Policy, MIT Press. Review extract, description and chapter-prev
iew links.
Laffont, Jean-Jacques (2000). Incentives and Political Economy, Oxford. Descr
iption.
Acemoglu, Daron (2003). "Why Not a Political Coase Theorem? Social Conflict,
Commitment, and Politics," Journal of Comparative Economics, 31(4), pp. 620 652.
Jump up ^ Persson, Torsten, and Guido Tabellini (2003). The Economic Effects Of
Constitutions, Munich Lectures in Economics. MIT Press. Description and preview,
and review extract.
Jump up ^ Mayer, Charles S. (1987). In Search of Stability: Explorations in Hist
orical Political Economy, Cambridge University Press, Cambridge, pp.3 6. Descripti
on and scrollable preview. Cambridge.
Jump up ^ cf: Baker, David (2006). "The political economy of fascism: Myth or re
ality, or myth and reality?", New Political Economy, 11(2), pp. 227 250.
Jump up ^ Cohen, Benjamin J. "The transatlantic divide: Why are American and Bri
tish IPE so different?", Review of International Political Economy, Vol. 14, No.
2, May 2007.
Jump up ^ McCoy, Drew R. "The Elusive Republic: Political Economy in Jeffersonia
n America", Chapel Hill, University of North Carolina.
Jump up ^ Kennedy, David (2013). "Law and the Political Economy of the World" (P
DF). Leiden Journal of International Law. Retrieved December 24, 2015.
Jump up ^ Haskell, John D. (2015). Research Handbook on Political Economy and La
w. Edward Elgar. ISBN 978 1 78100 534 7.
Jump up ^ Hirth, Kenneth G. 1996. Political Economy and Archaeology: Perspective
s on Exchange and Production. Journal of Archaeological Research, 4(3):203-239.
Jump up ^ Biel,R. and Mu-Jeong Kho (2009)"The Issue of Energy within a Dialectic
al Approach to the Regulationist Problematique," Recherches & Rgulation Working P
apers, RR Srie ID 2009-1, Association Recherche & Rgulation: 1-21." (PDF). http://
theorie-regulation.org. 2009-11-23. Retrieved 2013-11-09. External link in |publ

isher= (help)
References[edit]
Baran, Paul A. (1957). The Political Economy of Growth. Monthly Review Press, Ne
w York. Review extrract.
Commons, John R. (1934 [1986]). Institutional Economics: Its Place in Political
Economy, Macmillan. Description and preview.
Leroux, Robert (2011), Political Economy and Liberalism in France : The Contribu
tions of Frdric Bastiat, London, Routledge.
Maggi, Giovanni, and Andrs Rodrguez-Clare (2007). "A Political-Economy Theory of T
rade Agreements," American Economic Review, 97(4), pp. 1374-1406.
O'Hara, Phillip Anthony, ed. (1999). Encyclopedia of Political Economy, 2 v. Rou
tledge. 2003 review links.
Pressman, Steven, Interactions in Political Economy: Malvern After Ten Years Rou
tledge, 1996
Rausser, Gordon, Swinnen, Johan, and Zusman, Pinhas (2011). Political Power and
Economic Policy. Cambridge: Cambridge U.P.
Winch, Donald (1996). Riches and Poverty : An Intellectual History of Political
Economy in Britain, 1750 1834 Cambridge: Cambridge U.P.
Winch, Donald (1973). "The Emergence of Economics as a Science, 1750 1870." In: Th
e Fontana Economic History of Europe, Vol. 3. London: Collins/Fontana.
Journals[edit]
Constitutional Political Economy
Economics & Politics
European Journal of Political Economy
Latin American Perspectives
International Journal of Political Economy
New Political Economy
Description, aims & scope.
Public Choice
Studies in Political Economy
External links[edit]
Wikibooks has a book on the topic of: Political Economy
Wikisource has the text of the 1905 New International Encyclopedia artic
le Political Economy.
The Economic Sociology and Political Economy global academic community
NBER (U.S.) "Political Economy" working-paper abstract links.
VoxEU.org (Europe) "Politics and economics" article links.
List, Friedrich. National System of Political Economy
Carey, Henry C. Harmony of Interests - compares American and British systems[cla
rification needed] of political economy
International Political Economy at Jacobs University Bremen
Global Political Economy at City University London
Centre for Global Political Economy at the University of Sussex, UK
O'Neil Center for Global Markets and Freedom at the SMU Cox School of Business D
allas, TX USA
Institute for the study of Political Economy and Law (IPEL) at the International
University College of Turin (IUC), Italy
European Centre for International Political Economy
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