Political Economics
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From Zeuthen Lectures

Political Economics

Explaining Economic Policy

By Torsten Persson and Guido Tabellini

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Summary

What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis.

Combining the best of three separate traditions—the theory of macroeconomic policy, public choice, and rational choice in political science—Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.

Hardcover

Out of Print ISBN: 9780262161954 560 pp. | 9 in x 7 in

Paperback

$53.00 S | £41.00 ISBN: 9780262661317 560 pp. | 9 in x 7 in

Endorsements

  • The field of modern political economics needed this book. We now have an outstanding teaching tool, a splendid reference book, and a coherent treatment of the field. Persson and Tabellini have done a great service to the profession.

    Alberto Alesina

    Professor of Economics, Harvard University

  • Analytical models of political institutions frequently neglect the economy. Theories of economic policy making often ignore political institutions altogether. Political Economics, a bold and original enterprise, leads a new wave of more thoroughly synthetic treatments. Reading this superb book is an enriching experience.

    Kenneth A. Shepsle

    Markham Professor of Government, Harvard University

  • During the last decade, Persson and Tabellini have done more than advance the frontier of research in political economics; they have elevated to a new level the art of writing survey articles that simultaneously clarify, synthesize, and extend the literature. Here they have combined all these skills in an outstanding book.

    Avinash K. Dixit

    Sherrard University Professor of Economics, Princeton University