Week 7 - Political economy of regulation

Week 7 - Political economy of regulation - Chapter 8 The...

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Chapter 8: The Political Economy of Environmental Regulation and Resource Management Professor Steven C. Hackett Humboldt State University
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Political Economy Overview: What is political economy? A simple analytical framework Supply of regulatory policy Demand for regulatory policy Equilibrium in the political market for regulation
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Political Economy Overview, Continued: Application: Political economy of environmental regulation Social choice theory and the median voter theorem Application: Self-governance of localized common pool resources Case: Montreal Protocol
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What is Political Economy? History: In the time between Adam Smith’s Wealth of Nations ( 1776) and John Stuart Mill’s Principles of Political Economy ( 1848), what is now called economics was more generally called political economy. The term political economy reflected the belief that politics and economics are inseparable, and in fact that political factors are crucial in determining economic outcomes.
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What is Political Economy? History: Much of the focus in political economy was on what we might now call the economics of public policy.
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What is Political Economy? R. Keohane, 1984. After Hegemon y . p. 21: Wherever, in the economy, actors exert power over one another, the economy is political. Alt and Shepsle, 1990. Perspectives on Positive Political Economy : Political economy is the study of rational decisions made in the context of political and economic institutions.
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What is Political Economy? Allen Drazen, 2000. Political Economy in Macroeconomics, p. 7: Political economy begins with the observation that actual policies are often quite different from ‘‘optimal’’ policies, the latter defined as subject to technical and informational, but not political, constraints. Political constraints refer to the constraints due to conflict of interests and the need to make collective choices in the face of these conflicts.
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What is Political Economy? Within microeconomics, political economy is an approach used to understand how political and legal institutions influence the economic behavior of people, firms, and markets, as well as the economics of how interest groups influence the formation of laws and regulatory policy.
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What is Political Economy? From the standpoint of international economics, political economy is concerned with understanding how national policies influence international trade, investment, and finance, with the processes that lead to the formation of international economic treaties and institutions, and with the economic consequences of these laws and institutions.
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What is Political Economy? Positive Political Economy : These relatively recent approaches to political economy – sometimes referred to as the new political economy – borrow economic approaches for modeling incentives as a way to understand the political and economic forces that shape public policy.
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What is Political Economy?
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