Student Number: 2020-09411-MN-0 Date: November 08, 2021

Name: Salazar, Mary Rose C. Section: BAPE 1-2

Homework 01
I. Discussion Questions
1. What does political economy mean?
The study of how individuals, governments, and public policy interact is known as political
economy. It's used to refer to government activities that have an economic influence on a country.
Its economic theory is also a technique for distributing limited resources to benefit the largest
number of people. Also, Political Economy is the study of how a country is managed or governed
(Balaam and Veseth 2020).

2. What is the primary concern of political economy?

Political economists study how public policy, the political environment, and political institutions
impact a country's economic state and future from a sociological, political, and economic
viewpoint. Political economy draws on sociology, economics, political science, and even
geography to determine how government, an economic system, and politics interact (Dili 2020,
7).

3. What are the types of political economy?

Socialism, capitalism, and communism are the three types of political economy. To be more
specific, socialism aims to bridge the gap between the rich and the poor. Communism, on the
other hand, is the concept that promotes equal resources by the government. Lastly, a profit-
centered system is promoted as an incentive for advancement in capitalism.

4. Who coined the term political economy?

The term Political Economy was coined by Antoine de Montchrestien, a French writer and
economist. He authored "Traité de l'économie politico" in 1615, a book in which he explored the
need for production and wealth to be distributed on a far larger scale than Aristotle had suggested.
In addition, the link between economics and politics was also examined in the book (Dili 2020, 8).

5. How does the economy affect political stability? Public policy/governance?

The economy influences the political economy through investment and economic
development. Government collapse and political turmoil might emerge from poor economic
performance. In contrast, if the economy succeeds in attracting foreign direct investment, the
political environment will be stable and predictable (Hussian 2014). On the other hand, economic
conditions have a considerable impact on economic growth and the formation of new firms, hence
they have an impact on public policy. A country’s economic activity represents what individuals,
companies, and governments want to buy and sell in the broadest sense. Therefore, the economy
is mostly shaped by consumers and producers (“What Impact Does Economics Have on
Government Policy?” 2021).

6. How does political stability affect economic growth? Public policy/governance?

Investment and economic development may suffer if the political system is unstable,
potentially leading to government collapse and political turmoil. Political stability, on the other
hand, helps the country's long-term progress by offering a predictable economic plan for
investors, taxpayers, and lenders to follow. Political stability grants advancement and execution of
policies set by a political superior regime in terms of public policy, whereas political instability
produces conflict in the implementation of laws and policies.

7. How does political economy explain the culture, social structure/segmentation, and level of
literacy in a country?
Political Economy describes a country's culture by uncovering the underappreciated
significance of culture in historical literature. It also explores its continued role in contemporary
economic processes, which play a role in both constituting different forms of economic life.
Political Economy studies society and its interrelationships with the economy, allowing readers to
have a better understanding of how the public's household is managed or regulated, taking into
consideration both political and economic issues. While professions were previously used to
represent literacy levels, we now need to focus more on the economic side of political economy
to better understand literacy levels. Finding a job that pays more than a decent wage might be
challenging for people with low literacy. Furthermore, once they are hired in these roles, it is
difficult for them to be promoted or earn a raise, significantly restricting their career mobility.

8. Can the current actions, policies and preparedness of the government on the COVID-19
pandemic through the lens of political economy? In what way/s?
At the beginning of the pandemic, it is clear that the government's actions, policies and
preparedness are inadequate. First, our first occurrence of COVID was caused by two Chinese
nationals visiting our country at a time when we were supposed to be under lockdown. Second,
our country alternates between ECQ and MGCQ, resulting in greater encounters amongst people
who are still unvaccinated at the time. Third, it is acceptable that obtaining vaccines is difficult for
the government due to a lack of funds and vaccines are still under clinical testing, yet they should
have implemented their policies strictly. These are only a handful of the scenarios that have arisen
in the last several months as a result of the epidemic. It is understood that the government cannot
abandon our economy as it is one of the crucial factors of development. Thus, our country is made
up of individuals. Even if we succeed in saving our economy but lose half of our population, it will
still endanger our economy in the future. Therefore, government officials should learn the
boundary of political and economical actions they should implement.

9. Will your present learnings of political economy affect your view/prospects of the 2022
elections? In what way/s?
The learnings I have gained from political economy has a significant impact on my opinions
regarding the approaching election. First, I was able to widen my visualizations of what the
government might be like if that particular individual was elected to lead the country. Second,
given that we are in the middle of a pandemic, knowing and understanding what and how the
candidates will implement their program will aid me in selecting the best candidate among them.
Lastly, I can determine if they are a benefit or a hindrance to political institutions, knowing that the
requirements for the president are a bit lacking.

II. Give each two examples of Economic Rent and Rent-Seeking Behavior
Economic Rent
1. A laborer may be eager to work for $15 per hour, but if they are a member of a union, they
will be paid $18 per hour for the same task. The $3 difference represents the worker's
economic rent, commonly known as unearned income.
2. A property owner in an elite shopping mall is ready to rent it out for $10,000 per month, but a
corporation interested in having a retail outlet in the mall may be willing to pay $12,000 per
 month to secure the property and avoid competition. In this scenario, the $2,000 difference
represents the owner's economic rent.

Rent-Seeking Behavior
1. 1. Businesses can request support from the government in areas like as competition, special
subsidies, grants, and tariff protection. A corporation can collect economic rents without
increasing productivity or putting its capital at risk if it can get legislation passed to limit
competition or create barriers to entry for others.
2. Individual landlords can use social welfare money to collect economic rents. Welfare, housing
assistance, and medic aid are all sources of support. Individual tenants can use their eligibility
for these programs to receive government money without having to pay anything back.
 References

Balaam, David N., and Michael A. Veseth. 2020. “Political Economy.” Encyclopedia

Britannica. https://www.britannica.com/topic/political-economy.

Dili, Ramces. 2020. “Introduction to the Study of Political Economy.” In Political Economy

in Historical Perspective, 8.

Dili, Ramces. 2020. “Introduction to the Study of Political Economy.” In Political Economy

in Historical Perspective, 7.

Hussian, Zahid. 2014. “Can political stability hurt economic growth?” worldbank.org.

https://blogs.worldbank.org/endpovertyinsouthasia/can-political-stability-hurt-

economic-growth.

“What Impact Does Economics Have on Government Policy?” 2021. Investopedia.

https://www.investopedia.com/ask/answers/031615/what-impact-does-

economics-have-government-policy.asp.