TM6 Political Economy of Growth and Distribution

Brief Outline:

Historically, thinkers like Adam Smith and David Ricardo gave primacy to economic mechanisms in their attempt to explain the big questions on the material conditions of human welfare, i.e., the growth and distribution of income and wealth. However, other social sciences recognized quite early that political power and resultant contestations were as important in determining these outcomes. Thus, during much of the twentieth century, thinking on these issues diverged between economics on the one hand, and other social sciences including political science and sociology on the other. This dichotomy in the analysis of political economy issues continued for large parts of the long twentieth century.

A very significant ‘metamorphosis’ of this dichotomous approach towards an analysis of the ‘political’ started towards the end of the twentieth century. It happened as a result of the increasing influence of ‘institutionalism’, on economics, political science and sociology. This school of thought argued that, rather than individual choices, it was the rules of human behaviour – either formally adopted or informally agreed to – that organize social, political and economic interactions in a society, which are the most important determinants of socio-economic outcomes. This approach also stressed that the nature of these institutions were themselves the outcome of complex sociological, political and even historical processes. All these ideas gave rise to a large and growing literature that redefined the theme of political economy of growth and distribution in contemporary settings. The upshot of this metamorphosis was the rejection of the dichotomous approach and the adoption of a more multi-disciplinary approach towards growth and distribution.

While these existing contributions to the literature have definitely provided a solid base to this research, it is well understood that the constant ‘metamorphosis’ in the nature of institutions and their ‘political’ ramifications means that there are newer avenues of research that are opening up constantly. The module on ‘Political Economy of Growth and Distribution’ will attempt to take this literature forward.

The module will focus on four research themes between 2018 and 2021. These themes are 1) Political Economy of Economic Transformation; 2) Political Economy of Financial Developments; 3) Political Economy of Corruption; and 4) transformation of economic dynamic. The Political Economy of Economic Transformation will include issues such as i) investigating the institutional and political determinants of structural transformation of an economy, and its relationship with medium term episodes of growth accelerations and decelerations; ii)investigating the effect of economic and political institutions on long-run development; iii) investigating the comparative role of political and economic factors in determining investment decisions within firms; and iv) the political economy of specific sectors like the extractive industries sector or the electricity sector; v) economic development and the outcome of elections. This theme will explicitly focus upon the complex contexts that constitute the various relationships between economy and society in general and citizens and democratic processes in particular. It seeks to re-orient traditional ways of exploring ‘the economic’, ‘the social’ and ‘the political’ as separate realms of inquiry in order to interrogate the broader contexts within apparently economic decisions are located and the ways in which the separation occludes relationships between political motives, economic decision-making and life in a democratic polity. The second theme Political Economy of Financial Developments will include issues such as i) studying the effect of geopolitics on the sub-national allocation and effectiveness of foreign aid; and ii) analyzing the relationship between financial deepening and the real economy within the framework of ‘financialisation’. This theme seeks to open up the importance of financial relations for contemporary national economic systems by exploring new practices, dynamics and financial instability. Financialisation is then used to explore the way in which the economic transforms societies more generally and here connects to other modules such as  TM 2 ‘Labour as a Political Category’ and TM 5 ‘The Challenge of Gender’. It is assumed that these widely observed changes have a global financial dimension. The third theme Political Economy of Corruption will include issues such as i) analyzing the links between development, democracy and corruption and ii) investigation into causes and consequences of corruption and the actions of the monitoring authorities. The fourth theme Transformation of Economic Dynamics will include issues such digitalization, technology and the changing function of social welfare systems in a digitalized economy with a particular focus on questions of development and health.

In order to build linkages with other international institutions and consortiums, which is a major objective of the ICAS program, the module has included key academics from two of these institutions as members of the module committee. The first such institution/consortium is the Effective States and Inclusive Development (ESID) Centre at the University of Manchester. The joint Research Director of ESID, Professor Kunal Sen, is a member of the module committee. The second institution/consortium is the Political Economy Department of the King’s Collage of London. Professor Amrita Dhillon, who is a faculty at this department, has also joined the module committee. The module proposes to carry out joint activities with these institutions, during the next few years.

Module Coordinators (in alphabetical order of last name), profiles

Module Committee Members (in alphabetical order of last name), profiles