Political Economy II:
Core Issues and Conceptual Frameworks in Political Economy
Mandatory elective course
Winter semester, 2015-16 academic year 4 credits – 8 ECTS
Instructor: Borbála Kovács, DPhil (Oxon.) kovacsb@ceu.edu
Office: FT906
Office hours: Mondays 11.00-12.30 Tuesdays 11.00-12.30 Thursdays 11.00-12.30 by appointment Class: Tuesdays, 13.30-15.10
Thursdays, 13.30-15.10 Classroom: FT908
Course webpage: http://ceulearning.ceu.edu/course/view.php?id=4855
Course description
This course introduces political economy as a particular approach to the study of politics and explores foundational theoretical concepts, explanatory traditions and methodological approaches common in political economy. As a continuation to the introductory political economy course in the fall semester (Political Economy I), the discussions in this course engage with generic, macro-level questions about the relationship between political and economic institutions, that between economic development and authoritarian government as well as the economic foundations of democratic and authoritarian governance. At the same time, the course incorporates discussions about key theoretical approaches central to explaining political behaviour and institutional change in political economy, especially rational choice theory, game theory and historical institutionalism. The course asks the following and other questions: What is the ‘stuff’ of political economy? What key concepts and conceptual assumptions does political economy as an approach in political science research rely on? What competing explanations are there for the development and consolidation of democracy and of authoritarian rule? What theoretical frameworks are common in political economic research and what are they for?
The course is structured into three main parts:
• The ‘stuff’ of political economy, focusing on what political economy as an approach to the study of politics is and on the types of questions political economist usually ask;
• Key themes of political economy, bringing together political economic studies about the origins of democracy, the origins and endurance of autocratic rule and the political basis of economic growth across the world among others.
• The conceptual frameworks of political economy, honing in on rational choice and especially game theory and, not least, on historical institutionalism.
Most weeks bring into focus one topic. Most topics comprise two related discussions, one usually focusing on key concepts and the theorisation of behaviour or institutional change and the other on the methods and data underpinning conceptual discussions and theory building.
Learning outcomes
The organisation of classes is aimed to help students develop a good understanding of the subject matter, with a focus on concepts, theoretical and methodological approaches to explaining causal relationships as well as their analytical relevance and value. In addition, however, classroom activities are aimed to help students develop a range of:
• transferable skills: meaningful oral participation in group settings, reflecting deep engagement with the subject matter; concise and precise oral formulation of
opinions, arguments and puzzles; critical listening; presenting and critically discussing scholarly work by others; developing effective PowerPoint presentations; making conference-type presentations;
• study skills: structured note taking, summarising (orally and in written form); critical reading and reading comprehension, metacomprehension; constructive feedback and team work; defining one’s own learning needs, planning progress and
incorporating constructive feedback received; manage a semester-long project in a successful way;
• critical thinking skills: reflexivity; deductive reasoning; hypothesising; structured argumentation; making inferences and articulating assumptions; the application of newly acquired knowledge to new situations.
Class structure
Most meetings consist of a 15-minute student-led critical presentation of a key reading, followed by a structured discussion of key concepts; key arguments; key theoretical and methodological approaches; puzzles & questions; the relevance of the subject matter.
Meetings with a different structure will be announced in due course.
Structured discussions follow the results of reading key readings using the I.N.S.E.R.T.
technique (Estes and Vaughn, 1986). As such, discussions will focus on what students already knew when reading the text; what they knew differently; what they did not know; and the issues they want to find out more about.
Estes, T. H. and Vaughn, J. L. (1986) Reading and Reasoning beyond the Primary Grades. Boston, MA: Allyn &
Bacon.
Class requirements
Students are expected to attend meetings regularly, to participate in class discussions and submit independent work according to assignment descriptions. Furthermore, students will have to (1) present a key reading and, depending on class size, (2) act as discussant. Students will also submit a final assignment.
Students’ final grade will consist of the following assignments:
1. class participation in structured discussions and in-class group activities during minimum 75% (i.e. 18) of sessions – 30% of the final grade;
2. acting as presenter with mandatory handouts uploaded to e-learning 24 hours before class, in .docx format – 30% of the final grade;
3. final assignment – 40% of the final grade:
a written exam drawing on the studied subject matter (details TBA) OR
the making of a conference style presentation based on an original piece of research in line with the topics and themes of the course (details TBA)
OR
the preparation of three argumentative essays (2,500 words each) based on readings from section II of the coursework (including additional readings).
Nota bene: You may not present a text and also write an argumentative essay in connection to it.
Grading and assessment
Students receive on-going feedback in all my courses. This course encourages the use of so- called rubrics or descriptions of standards of performance. They are meant to help students reflect on their performance and identify aspects of their academic performance where they can improve. Specific rubrics are also used to grade assignments. Rubrics are available online on the course website: http://ceulearning.ceu.edu/course/view.php?id=4855.
Note on Citing and Referencing
You will be expected to use Harvard style referencing. Please find an extensive citation and referencing guide on this course’s e-learning page:
http://ceulearning.ceu.edu/course/view.php?id=4855.
At the same time, you are strongly encouraged to use a citation manager software for all your written assignments, in which case you can use Chicago style referencing.
Key texts of the course
Acemoglu, D. and Robinson, J. A. (2005) Economic Origins of Dictatorship and Democracy, Cambridge: Cambridge University Press.
Mahoney, J. and Thelen, K. (eds.) Explaining Institutional Change: Ambiguity, Agency, and Power, Cambridge: Cambridge University Press.
Williams, M. (ed.) The End of the Developmental State?, London: Routledge
Wittman, D. A. and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford:
Oxford University Press.
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Penalties: in case of late submissions of independent work and plagiarism.
Departmental rules on plagiarism apply.
I. INTRODUCTION: KEY CONCEPTS & QUESTIONS OF POLITICAL ECONOMY
Session 1. What do we know about political economy?This session introduces the course, its requirements and its resources. The session then goes on to chart what students know about topics and methodological approaches common in political economy.
No readings assigned.
Session 2. Introducing key concepts: Institutions
This introductory discussion introduces some of the key concepts of political economy, namely institutions and self-interested (political) actors.
Key reading:
North, D. C. (2002) Institutions, Institutional Change, and Economic Performance, Cambridge:
Cambridge University Press. Specifically Chapter I.
Session 3. Introducing key conceptual frameworks: three institutionalisms
Building on the previous discussion, this session hones in on three different approaches to thinking about and analysing institutional continuity and change, i.e. three competing theoretical traditions in political economy.
Key reading:
Hall, P. A. (2010) ‘Historical Institutionalism in Rationalist and Sociological Perspective’, in Mahoney, J. and Thelen, K. (eds.) Explaining Institutional Change: Ambiguity, Agency, and Power, Cambridge: Cambridge University Press, pp. 204-223.
Additional reading:
Hall, P. A. and Taylor, R. C. R. (1996) ‘Political Science and the Three New Institutionalisms’, Political Studies, XLIV: 936-957.
Session 4. The scope of political economy
Building on discussions of the range of concepts that political economists frequently rely on, this session brings into focus a variety of generic research questions that political economists frequently ask.
Key reading:
Weingast, B. R. and Wittman, D. A. (2009) ‘The Reach of Political Economy’, in Wittman, D.
A. and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Additional readings:
Alt, J. E. and Alesina, A. (1996) ‘Political Economy: An Overview’, in Goodin, R. E. and Klingemann, H. D. (eds.) A New Handbook of Political Science, Oxford: Oxford University Press.
Levi, M. (2000) ‘The Economic Turn in Comparative Politics’, Comparative Political Studies, 33(6-7): 822-844.
Session 5. International political economy
Building on the distinctions articulated in week 1, this discussion focuses on a particular branch of political economy: international political economy and its scope.
Key reading:
Lake, D. A. (2009) ‘International Political Economy’, in Wittman, D. A. and Weingast, B. R.
(eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Additional reading:
Underhill, G. (2000) ‘State, Market, and Global Political Economy: Genealogy of an (Inter-?) Discipline’, International Affairs, 76(4): 805-824.
Session 6. Institutions in international political economy
This session focuses on a key reading in (international) political economy, namely
Katzenstein’s seminal work on small states in the context of a global (and further globalising) world economy.
Key reading:
Katzenstein, P. J. (1985) Small States in World Markets: Industrial Policy in Europe. Ithaca, NY: Cornell University Press. Specifically pp. 39-70.
II. CENTRAL ISSUES IN POLITICAL ECONOMY
The following four topics cover key concerns of political economists: the origins and
endurance of authoritarian regimes, theories of democratisation, the relationship between type of governance and redistribution and the puzzling question of uneven economic development around the world.
1. THE POLITICAL ECONOMY OF AUTHORITARIAN GOVERNANCE AND ITS DURABILITY
Session 7. A rational choice argument for government
This session engages with simple conceptual models to explain the emergence of modern government and the endurance of authoritarian governance. It foregrounds more refined political economic theories of autocratic rule and authoritarian regimes’ endurance.
Key reading:
Bates, R. H. (2009) ‘The Role of the State in Development’, in Wittman, D. A. and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Session 8. Dictators as rational actors
Building on the previous discussion, this session presents a more sophisticated explanation for how autocratic rulers come to power and the conditions for their staying in power for long periods of time.
Key reading:
Haber, S. (2009) ‘Authoritarian Government’, in Wittman, D. A. and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Additional reading:
Slater, D. (2010) ‘Altering Authoritarianism: Institutional Complexity and Autocratic Agency in Indonesia’, in Mahoney, J. and Thelen, K. (eds.) Explaining Institutional Change: Ambiguity, Agency, and Power, Cambridge: Cambridge University Press, pp. 132-167.
Session 9. Dictators, launching organsiations and selectorates: a refined theory of authoritarian rule
Reflecting on the previous week’s increasingly more refined models of autocratic rule and durability, this session presents perhaps the most sophisticated theory of autocratic rulers’
political survival.
Key readings:
Bueno de Mesquita, B., Smith, A., Siverson, R., & Morrow, J. (2003) The logic of political survival. Cambridge, MA: MIT Press. Specifically Chapters 2 & 3.
Additional reading:
Bueno de Mesquita, B. and Smith, A. (2009) ‘Political Survival and Endogenous Institutional Change’, Comparative Political Studies, 42(2): 167-197.
2. THE POLITICAL ECONOMY OF DEMOCRATISATION
Session 10. The role of the state in theories of democratisationThe focus of this session is a discussion about ‘the state’ as a key theoretical concept in the study of democratisation and theories of democratisation.
Key reading:
Fortin, J. (2012) ‘Is There a Necessary Condition for Democracy? The Role of State Capacity in Postcommunist Countries’, Comparative Political Studies, 45(7): 903-930.
Session 11. The emergence of democratic institutions in Europe
This discussion centres on a particular political economic theory of democratisation.
Key reading:
Acemoglu, D. and Robinson, J. A. (2005) Economic Origins of Dictatorship and Democracy, Cambridge: Cambridge University Press. Specifically pp. 15-46 (Chapter 2. Our Argument)
Additional reading:
Acemoglu, D., Johnson, S. and Robinson, J. (2005) ‘6. Institutions as the fundamental cause of long-run growth’, in Aghion, P. and Durlauf, S. N. (eds.) Handbook of Economic Growth, Amsterdam: North-Holland / Elsevier. Specifically pp. 439-462. [also available online through CEU Library’s e-books collection]
Session 12. The use of history and historical analysis in political theory
Theories of democracy have often drawn on historical examples to articulate and illustrate causation for the purpose of theory building. However, reliance on historical examples has its pitfalls. This discussion focuses on the (mis)use of historical examples in building theories of democracy.
Key reading:
Capoccia, G. and Ziblatt, D. (2010) ‘The Historical Turn in Democratization Studies: A New Research Agenda for Europe and Beyond’, Comparative Political Studies, 43(8-9): 931-968.
Additional reading:
Mares, I. (2015) From Open Secrets to Secret Ballots: Democratic Electoral Reforms and Voter Autonomy, New York: Cambridge University Press. Especially Chapter 10: ‘From Macro- to Micro-Historical Analysis in Comparative Research’, pp. 231-242.
3. GOVERNANCE AND REDISTRIBUTION
Acemoglu et al. (2005: 446) have argued that “economic institutions are chosen for their distributional consequences. Which specific economic institutions emerge depends on who is able to get their way – who has political power.” The implication of this statement is that democracies, where a majority govern, will be more redistributive that non-democracies, where a minority govern. This week’s discussions engage with literature that tests this assumption and proposes some political economic explanations for why this assumption might be valid or, indeed, not.
Session 13. A political economic model of redistribution under different political regimes The session engages with explanations about (1) why democracies and non-democracies will (re)distribute collective resources differently; (2) why non-democratic regimes also engage in redistribution, although with different outcomes. This session also draws on previous discussions about theories of autocratic rule and theories of democracy.
Key reading:
Mares, I. and Carnes, M. E. (2009) ‘Social Policy in Developing Countries’, Annual Review of Political Science, 12(1): 93-113.
Additional reading:
Mulligan, C. B., Gil, R. and Sala-i-Martin, X. (2004) ‘Do democracies have different public policies than nondemocracies?’, Journal of Economic Perspectives, 18(1): 51-74.
Session 14. The politics of redistribution in democracies: reviewing the literature This session engages with empirical literature focusing on redstribution in democratic nations over recent decades.
Key reading:
Iversen, T. (2009) ‘Capitalism and Democracy’, in Wittman, D. A. and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Additional reading:
Hall, P. A. and Soskice, D. (2001) ‘An Introduction to Varieties of Capitalism’, in Hall, P. A. and Soskice, D. (eds.) Varieties of Capitalism: The Institutional Foundations of Competitive
Advantage, Oxford: Oxford University Press, pp. 1-68.
4. UNEVEN GROWTH AND WEALTH AROUND THE WORLD
Session 15. Uneven economic development: an endogenous modelWhy is it that some countries are wealthier than others? The focus of this session is economist Daron Acemoglu and colleagues’ influential institutionalist explanation about cross-national variations in levels of economic development.
Key reading:
Acemoglu, D., Johnson, S. and Robinson, J. (2005) ‘6. Institutions as the fundamental cause of long-run growth’, in Aghion, P. and Durlauf, S. N. (eds.) Handbook of Economic Growth, Amsterdam: North-Holland / Elsevier. Specifically pp. 396-427 [also available online through CEU Library’s e-books collection]
Additional reading:
Acemoglu, D. and Robinson, J. A. (2012) Why Nations Fail: The Origins of Power, Prosperity and Poverty, New York: Crown Publishers. Especially Chapter 2.
Session 16. Uneven economic development: the developmental state perspective
The question remains: why is it that some countries are wealthier than others? By drawing on arguments from the developmental state literature, this session engages with the role of state structure and state-society relations in explaining growth. It discusses 20th century developmental state conceptualizations.
Key readings:
Chibber, V. (2014), ‘The Developmental State in Retrospect and Prospect: Lessons from India and South Korea’, in Williams, M. (ed.) The End of the Developmental State?, London:
Routledge, pp. 30-54.
Additional reading:
Evans, P. (2014) ‘The Developmental State: Divergent Responses to Modern Economic Theory and the Twenty-First-Century Economy’, in Williams, M. (ed.) The End of the Developmental State?, London: Routledge.
Session 17. Uneven economic development: an international political economic perspective
This final session about uneven economic development, by drawing on previous discussions in international political economy (week 2), engages with the role of trade openness and poverty alleviation through global economic integration in explaining growth.
III. THEORETICAL FRAMEWORKS AND APROACHES IN POLITICAL ECONOMY
Building on the readings from previous weeks, the following four discussions reflect on a range of theoretical and methodological approaches common in explaining behaviour and institutional continuity and change in political research. The section starts with game theory, going on to discuss historical institutionalism as a particular approach to the study of politics.Sessions present these approaches in more general terms, moving onto key concepts and their application in empirical research.
1. RATIONAL CHOICE THEORY
Session 18. Rational Choice Theory and Its Applications
Building on the definition of institutions, this session introduces one of the fundamental conceptual approaches in political economy: rational choice theory and its applications.
Key reading:
Weingast, B. R. (1996) ‘Political Institutions: Rational Choice Perspectives’, in Goodin, R. E.
and Klingemann, H. D. (eds.) A New Handbook of Political Science, Oxford: Oxford University Press.
Additional readings:
Driscoll, A. and Krook, M. L. (2012) ‘Feminism and Rational Choice Theory’, European Political Science Review, 4(2): 195-216.
2. GAME THEORY
Session 19. What is game theory?
This discussion focuses on a particular approach in rational choice theory: game theory. This discussion outlines the key assumptions and conceptual toolkit of game theory.
Key reading:
Schelling, T. C. (2010) ‘Game Theory: A Practitioner’s Approach’, Economics and Philosophy, 26(1): 27-46.
Additional reading:
Austen-Smith, D. (2009) ‘Economic Methods in Positive Political Theory’, in Wittman, D. A.
and Weingast, B. R. (eds.) The Oxford Handbook of Political Economy, Oxford: Oxford University Press.
Osborne, M. J. (2004) An introduction to game theory, Oxford: Oxford University Press.
Specifically pp. 1-9; 13-35.
3. HISTORICAL INSTITUTIONALISM
Session 20. What historical institutionalism isThis session revisits what we already know about institutional analysis that takes history seriously and asks: what is historical institutionalism as a particular theoretical approach?
No key reading assigned.
Additional reading:
Steinmo, S. (2008) ‘What is Historical Institutionalism?’, in Della Porta, D. and Keating, M.
(eds.) Approaches in the Social Sciences, Cambridge: Cambridge University Press.
Session 21. Critical junctures
A key concept in theorising institutional continuity and change using history is critical junctures.
Key reading:
Capoccia, G. and Kelemen, R. D. (2007) ‘The Study of Critical Junctures: Theory, Narrative, and Counterfactuals in Historical Institutionalism’, World Politics, 59(3): 341-369.
IV. CONCLUDING SECTION
Session 22. Closing discussion: topics and methods in political economy
Sessions 23 & 24. Final assignments
The purpose of these two final student-led meetings is to provide, through student presentations, a structured review and analytical clarifications regarding some of the fundamental concepts that political economy operates with and, in a similar vein, of key explanatory models regarding a range of student-identified issues based on course readings.
