"The Nature of Political Economy” Essay

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Pages: 4

An essay on Robert Gilpin
“The Nature of Political Economy”
This chapter introduces differences and similarities between politics and economics. Both of them affect one another. In another hand, politicians and economists have different ideas and consumptions about the same facts. Also, they choose different ways of analysis. Moreover, Mr. Gilpin talks about the importance of the understanding the nature of political economy. In today’s rapidly changing world, where globalization takes place and deeply influences national economics, international affairs, government’s decisions and international politics are very popular topics among people to discuss. What’s why the study of political economy becomes more vogue among scientists from
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interpretations of this case and can show us difference between economical and political analysis. Economists ware interested in the economic sights of the crisis and they try to learn its dynamics, but not in the reasons caused this financial crisis. On the over hand, political economists were interested in political dynamics that caused the difficulties in 1992 and its long term consequences. In the end, it proves again that politicians and economists have different views and interests. They study cases trough different point of view and ask different questions and lead us to different answers.
After that, author returns to the explanation of differences between three schools: neoclassical institutionalism, the theory of public choice and new political economy. Mr. Gilpin says that these schools differ by understanding the purpose of institutions. Neoclassical institutionalism theory is based on belief, that institutions are created to solve economic problems and they improve economic efficiency. On the other hand, the theory of public choice believes that government institutions are created by powerful groups and they act according to their self-interest and decrease economic efficiency. Last one, new political economy, is based on the belief that, institutions are created for rational or irrational motives. As I mentioned above, if we want to study political economy fundamentally, all of this approaches are