Political Economy Glossary

In Marxist political economy, the fundamental struggle between social classes with opposing economic interests, particularly between capital owners (bourgeoisie) and workers (proletariat).

A situation in which rational individuals fail to cooperate for mutual benefit because each has an incentive to free-ride on others' efforts.

The principle that a country benefits from specializing in producing goods for which it has the lowest opportunity cost, forming the basis for arguments in favor of free trade.

The practice of international financial institutions (IMF, World Bank) attaching policy reform requirements to loans, requiring borrowing nations to implement specific economic changes.

A theory that underdevelopment in poor countries results from their structural dependence on wealthy core nations, which extract surplus through unequal trade and investment.

The post-WWII compromise in which states agreed to open international markets while retaining domestic policy space for social protection and full employment.

The use of government spending and taxation to influence the economy, a central tool in political-economic analysis of state intervention.

The tendency of individuals to benefit from collective goods without contributing to their provision, undermining cooperation and the supply of public goods.

The dominance of one state or social group over others, particularly in shaping the rules, norms, and institutions of the international economic order.

The formal rules (constitutions, laws, property rights) and informal constraints (norms, conventions, customs) that structure political and economic interactions in a society.

A model predicting that in majority-rule elections with single-peaked preferences, the outcome reflects the preference of the median voter, pulling parties toward the political center.

An early modern economic doctrine holding that national power is maximized by accumulating precious metals through trade surpluses, export promotion, and import restriction.

A political-economic ideology emphasizing free markets, deregulation, privatization, fiscal austerity, and free trade as the best paths to economic growth.

The theory that incumbent politicians manipulate macroeconomic policy to create favorable conditions before elections, generating economic cycles tied to electoral timing.

The interdisciplinary study of the interaction between political institutions and economic systems, analyzing how government policies shape markets and how economic forces influence political outcomes.

Legal and institutional frameworks that define and protect ownership of assets, considered a fundamental determinant of economic incentives and growth by institutional economists.

A school of thought applying economic analysis (rational choice, utility maximization) to political decision-making by voters, politicians, and bureaucrats.

A situation in which government regulatory agencies come to serve the interests of the industries they regulate rather than the public interest.

The expenditure of resources to manipulate policy or economic conditions to redistribute wealth toward oneself without creating new productive value.

The paradox that countries rich in natural resources, especially oil and minerals, often experience slower growth, higher corruption, and weaker governance than resource-poor countries.

Economic policy reforms, typically imposed as conditions for IMF or World Bank loans, requiring recipient countries to adopt fiscal austerity, privatization, and trade liberalization.

In Marxist theory, the difference between the value a worker produces and the wage they receive, representing the profit extracted by the capitalist.

An analytical framework distinguishing between liberal market economies (market-coordinated) and coordinated market economies (institutionally coordinated), developed by Hall and Soskice.

A set of ten policy prescriptions (fiscal discipline, tax reform, trade liberalization, privatization, deregulation, etc.) promoted by Washington-based institutions for developing countries in the 1980s and 1990s.

Immanuel Wallerstein's macro-level framework analyzing the global economy as a hierarchical system divided into core, semi-periphery, and periphery, connected by unequal exchange.