Political Economy

Definitions

Corporatism is the sociopolitical structure of a community composed of major interest groups that are also called corporate groups, including business, ethnic, agricultural, military or scientific groups on the premise of their common interest. It relies on the idea of society as an organic item.

Pluralism is the assumption that decision-making and politics are represented within the structure of government, but many non-governmental organizations use their resources in order to exert influence. The core of classical pluralism is the idea that power and influence are displayed through a political process.

Policy paradigm involves principles that explain the dynamics of policy changes that present the platform for new theories and frameworks that define various spheres of political life.

Keynesianism refers to diverse theories about economic output that is strongly associated with the aggregate demand that does not always equal the productive capacity. In fact, it is affected by a range of factors that can refer to employment, production, and inflation.

Neoliberalism refers to policies of fiscal austerity, privatization, and free trade, as well as the reduction in state expenses for the purpose of enhancing the role of privatization in society and economy.

Punctuated equilibrium is the theoretical framework that derives from evolutionary biology that assumes that as soon as species are documented in the fossil record, they stay stable, demonstrating little evolutionary shift throughout their geological history. The state is referred to as stasis.

Dualization, or dual economy, involves the emergence of two isolated economic sectors within one country split by various stages of technology, development, and demand patterns.

Embedded flexiblization is associated with the extent to which economic activity is hampered by non-economic circumstances. In non-market societies, there are no economic institutions to which traditional economic models and frameworks can be implied, and embedded flexibility is the major outcome of such cases.

Deregulatory liberalization focuses on the removal of governmental limitations and restrictions on the economy for the purpose of greater involvement of private entities. Such a term refers to the classical liberalism, which implies the withdrawal of controls that motivate economic development. High-income countries can introduce the way to economic liberation that seeks to increase the competitive advantage of business environments.

Knowledge regimes focus on the type of networks that rely on a range of organizations, actors, and institutions and create a policy idea aimed at changing overall operation and organization in production and policy-making processes.

Equi-marginal principle identifies the behavior of consumers while distributing their restricted income among diverse services and products. It also defines the way a consumer distributes money income among diverse goods.

Prisoner’s dilemma refers to the fundamental problem in the game theory according to which players cannot cooperate with each other, even when it is beneficial for each party. It is assumed that the prisoners will choose a better reward for them, without taking into consideration the interest of others.

Regulatory c apture is a governmental failure that takes place when a regulatory organization that aims to act in favor of public interest promotes the political and commercial concerns of special interest groups prevailing in the industry and sector charged with the regulatory procedures.

Labor theory of value assumes that the economic value of a product or service is defined by the general amount of the necessary labor required for its production rather than by the pleasure gained by the owner. Currently, the concept relates to Marxian economics.

Significance of Definitions

All the definitions provide various spectrums of political and economic developments and trends that affect the welfare of a specific country. They contribute to both theoretical and practical dimensions of economic analysis, showing how they can be applied at different stages of the country’s growth and development. The assessment of these issues also provides an insight into the historical heritage and introduces explanations for certain phenomena such as economic cycles, political trends, and the reaction of governmental authorities to a number of situations, such as a financial crisis.

Similarities and Differences between Constructivism and Critical Political Economy

One should admit that constructivism has become a significantly important theoretical method in international relations and political economy because it embraces sociological approaches and critical frameworks. According to the theory, the world is composed of social interactions where structures and agents are mutually constructed, and these ideological factors, including identity, norms, and ideas, are essential for promoting dynamics and constitution of the world politics. In this respect, it should be affirmed that constructivism and critical political economy are both variations of the ideational tradition in political economy that differ in terms of several aspects. To enlarge on the issue, constructivism is the assumption that the world is composed of social structures that are united by mutual interests, whereas critical political economy is more associated with individualistic perspectives that affect critical reasoning beyond group discussions. Thus, group vs. individual perspective is the key to other similarities and differences between the two variations.

While focusing on the theory of political economy, one cannot deny the ambivalent nature of structure and agency. From this perspective, the synthesis between structure and agency relies on a strategic and relational dimension that accentuates the mutual intercourse between agency and structure (Clift, 2014). In this respect, a strategic political action is usually carried out by a specific person to guide people to achieve a specific purpose. The problem introduces the connection between ideational analysis and structural rationale for political actions that are artificially emphasized because agents are often demonstrated to be influential but not reflexive. Therefore, the major difference between the two theoretical frameworks lies in the lack of understanding that guides the action and the way it is executed.

The ideational tradition explains the materialistic perspective of human behavior, which is often perceived as an objective response to material circumstances but underestimates the significance of institutions that are often regarded as uniform and mutually interchangeable. The ideational realm is complicit in terms of how political actions occur because some types of agenda establishment are revealed through the display of power. However, the ideational tradition also allows asking agents about their beliefs and perceptions to collect information about the rationale for their actions (Clift, 2014). In this respect, constructivism pays more attention to the ideational realm, demonstrating new forms of institutionalism that rely on structures that are not merely exogenous to the agency but are mediated by agencies that represent individual thinking.

It should be stressed that constructivism is the leading method for ideational tradition in political economy, considering its body of framework that provides distinction between rationalist and materialist approaches. Constructivism implies that structure and agency should be prioritized, but the individual importance should not be ignored, accepting the concept of duality, which is the major difference from other political economy theories. Thus, it also rejects absolute reliance on behaviorism and subjectivism because they do not explain the nature of the emergence of specific groups and communities with reliance on common interest. It also denies the emergence of societies and interest groups. Some of the groups do not rely on common interest but on common origin or calling, including ethnic or professional groups. Furthermore, it can also provide communities with regular functions and algorithms for actions.

In conclusion, both theories, constructivism and political theory, accept the existence of agencies that shape specific political structures. However, constructivism relies more on the group interest, ignoring the pure display of human behavior and subjectivism. In contrast, political economy is more concerned with the individual assessment of the situation, according to which all the groups are guided by perceptions, identities, and individual beliefs. Such an approach does not accept the privileged group of agencies. Regardless of the differences and similarities of each of theoretical perspectives, both theories complement each other and explain the nature and structure of the current society, which is closely associated with the dualistic nature of all currently existing groups.