PACS 314: Political Economy
Political economy begins with the political nature of collective decision making and is concerned with how politics affect public choices in a society – including not only countries but also firms, social groups, or other organizations. In contrast to either economics or political science in isolation, political economy emphasizes understanding the mechanisms that societies use in choosing policies in the face of conflicts of interest. A motivating question would be: how does a society make collective decisions that affect it as a whole when individual members have conflict of interests? In this course, we focus on answering simultaneously two central questions: how do institutions evolve in response to individual incentives, strategies and choices; and how do institutions affect the performance of political and economic systems? By focusing on how political and economic institutions constrain, direct and reflect individual behavior, political economy attempts to explain collective outcomes like group decision making, resource allocation and public policy in a unified fashion.