Category: Theories Of Political Economy

Could objectives of the Nehru-Mahalanobis model and the planned economic development in terms of industrialization, asset and infrastructure creation, poverty alleviation and employment generation be achieved? If not, then what are the factors that have influenced the state policies and their operation? Are there interest groups that have influenced the resource distribution away from the…

The Constitution of India has envisioned a liberal-democratic-welfare state with socialist goals. Sounds a bit torn between different directions but the goals of welfare democracy with equitable redistribution of resources are considered important. A result of this goal has been the importance given to the planning process for long-term development. This goal is also reflected…

Application of rational-choice assumptions in understanding political process and for carrying out political analysis has resulted in public-choice theory. How government’s policies and decisions regarding resource allocation are made? How public and social policies are decided? Do preferences and policies of government reflect the actions of specific interest groups within the economy? Answers to these…

It applies mathematical assumptions to analyse individual behaviour in the context of choices and options or what is called the ‘prisoners’ dilemma. The game theory has been discussed in detail in Chapter 2, relating to approaches to the study of politics. The focus of this approach is on analysis of strategic choice by decision-makers in a…

One of the contemporary theories to politics that uses economic assumptions in explaining and understanding politics is known as ‘political economy’, or ‘public-choice’ or ‘rational-choice’ theory. It is also called ‘formal political theory’.9 It applies rules and assumptions of the economic theory to analyse the behaviour of human beings in a situation of decision-making. It involves decision-making…

Marx adopted the conception of ‘economic determinism’ as part of his materialistic explanation of history. It implies that economic and material conditions of human life are basic and primary factors for understanding all the other activities. Economic relations, as they prevail in the context of ownership of the means of production, are the determining factors…

Classical Political Economy Approach Classical political economy approach is said to have started with the Physiocrats (a school of economic thought in France led by Quesnay and Mirabeau) who advocated liberty of production and non-interference of state in the economic activity (primarily agricultural), a policy of laissez-faire. However, Adam Smith, Robert Malthus and David Ricardo advocated the policy of laissez–faire as…

Political economy relates to application of economic concepts and assumptions in understanding aspects of politics, political behaviour of citizens, decision-makers, interest groups and the states in their interaction with other states. Political economy approach offers economic explanation for public policy; that decision and policy-makers would choose or formulate such policies that would present an optimal…