Skip to main content
SpringerLink
Log in

Political Economy of Structural Change

  • Chapter
  • First Online:
The Palgrave Handbook of Political Economy

Abstract

This chapter reviews the contributions on structural economic dynamics and extracts from these to which extent one can use them to understand what we might subsume under the political economy of structural change. It reviews the contributions of classical authors as well as more recent analytical contributions to structural economic dynamics and explores in which way they cover political economic aspects within their frameworks. By political economy of structural change we refer to the entire range of how relationships between social groupings get shaped by the positions of these groups in the context of ‘structural interdependencies’ and how, through their actions, they themselves shape these patterns of interdependencies, and also the dynamics of the economic system as a whole. An important role in this analysis is the identification of ‘forces of resistance’ and ‘forces of change’ and the role they play in shaping patterns of innovation, absorption of and adaptation to ‘shocks’ and thus the evolution of economic and social structures. This is the core of what we refer to as ‘political economy of structural change’.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 349.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 449.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    We shall use the notion of ‘forces of change’ to characterise variables (such as technical progress and demographic changes) that impact an economic system in a continuous manner (although often with varying strengths) over a longer period, while ‘shocks’ (or ‘impulses’) refer to more sudden impacts that act over a specific and shorter period.

  2. 2.

    Thus, both Francois Quesnay and Adam Smith pointed to the importance of building canals and other transport infrastructure to connect markets and thus widen the scope of production and market interrelationships within a country.

  3. 3.

    The analysis of stages of economic development in classical political economy is a case in point (see e.g. Smith 1776, Book III ‘Of the different Progress of Opulence in different Nations’).

  4. 4.

    See, however, Landesmann (1991) where a contradiction of two different concepts of ‘productiveness’ in Adam Smith, i.e. that of the employment multiplier and that of the more traditional productivity notion—output relative to inputs used—is explored.

  5. 5.

    The analysis of consumer expenditure patterns was a very active area of theoretical and empirical research, starting with R. Stone’s early work on the linear consumer expenditure system (Stone 1954), see also Deaton and Muellbauer (1980).

  6. 6.

    Pasinetti uses in his model an assumption that falls in labour input coefficients and thus inversely increases in labour productivity take place at differential but constant rates in different subsystems. This is of course a gross oversimplification, as the labour input coefficients of each vertically integrated sector are—any point in time—a linear combination of labour productivity levels in the original sectors of production. The growth rate of the labour input coefficient of the vertically integrated sector would therefore change as a function of the growth rates of the different original sectors, but also because of changing weights of these original sectors in the vertically integrated sector.

  7. 7.

    In a further piece of analysis—which Pasinetti does not undertake—one could also introduce uneven productivity developments into the input coefficient matrices [Ai], which would also affect cost developments and thus relative prices. In turn, changes in relative prices may also introduce substitution effects as determinants into consumers’ expenditure systems.

  8. 8.

    See e.g. Hawkins et al. (1949).

  9. 9.

    See Landesmann (2015) where the two different concepts of ‘rent’ in the classics, on the one hand, and in Marshall and Schumpeter, on the other hand, are explored.

References

  • Aftalion, A. 1913. Les crises périodiques de surproduction. Paris: Rivière.

    Google Scholar 

  • Allen, R.G.D., and J.R. Hicks. 1934. A Reconsideration of the Theory of Value. Economica, Part II 1 (2): 196–219.

    Google Scholar 

  • Amendola, M., and J.-L. Gaffard. 1998. Out of Equilibrium. Oxford: Clarendon Press.

    Book  Google Scholar 

  • Anderson, P.W., K.J. Arrow, and D. Pines (eds.). 1988. The Economy as an Evolving Complex System. The Proceedings of the Evolutionary Paths of the Global Economy Workshop. New York: Addison Wesley.

    Google Scholar 

  • Arthur, B.W., M. Landesmann, and R. Scazzieri. 1991. Dynamics and Structures. Structural Change and Economic Dynamics 2 (1): 1–7.

    Article  Google Scholar 

  • Babbage, C. 1832. On the Economy of Machinery and Manufactures. London: Charles Knight.

    Google Scholar 

  • Baldone, S. 1980. Fixed Capital in Sraffa’s Theoretical Scheme. In Essays on the Theory of Joint Production, ed. L.L. Pasinetti, 88–137. London: Palgrave-Macmillan.

    Google Scholar 

  • Baldone, S. 1996. Vertical Integration, The Temporal Structure of Production Processes and Transition between Techniques. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 81–104. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Baranzini, M., C. Rotondi, and R. Scazzieri (eds.). 2015. Resources, Production, and Structural Dynamics. Cambridge: Cambridge University Press.

    Google Scholar 

  • Baumol, W. 1967. Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis. The American Economic Review 57 (3): 415–426.

    Google Scholar 

  • Belloc, B. 1996. Traverse Analysis in a Neo-Austrian Framework. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 33–80. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Bouniatian, M. 1922. Les crises économiques: essai de morphologie et théorie des crises économiques périodiques et de théories de la conjuncture économique, trans. J. Bernard. Paris: M. Giard.

    Google Scholar 

  • Cardinale, I. 2017. Sectoral Interests and ‘Systemic Interest’, Towards a Structural Political Economy of the Eurozone. In The Political Economy of the Eurozone, ed. I. Cardinale et al., 216–233. Cambridge: Cambridge University Press.

    Google Scholar 

  • Cardinale, I., and D. Coffman. 2014. Economic Interdependencies and Political Conflict: The Political Economy of Taxation in Eighteenth Century Britain. Economia Politica: Journal of Analytical and Institutional Economics 31 (3): 277–300.

    Google Scholar 

  • Cardinale, I., and M. Landesmann. 2017. Exploring Sectoral Conflicts of Interest in the Eurozone: A Structural Political Economy Approach. In The Political Economy of the Eurozone, ed. I. Cardinale et al., 284–336. Cambridge: Cambridge University Press.

    Google Scholar 

  • Cardinale, I., and M. Landesmann. 2018. EMU–Integration and Disintegration: A Structural Political Economy Approach. Unpublished manuscript, Cambridge.

    Google Scholar 

  • Cardinale, I., D. Coffman, and R. Scazzieri (eds.). 2017. The Political Economy of the Eurozone. Cambridge: Cambridge University Press.

    Google Scholar 

  • Deaton, A., and J. Muellbauer. 1980. Economics and Consumer Behaviour. Cambridge: Cambridge University Press.

    Google Scholar 

  • Dosi, G. 1982. Technological Paradigms and Technological Trajectories: A Suggested Interpretation of the Determinants and Directions of Technical Change. Research Policy 11 (3): 147–162.

    Google Scholar 

  • Eltis, W. 2000. The Classical Theory of Economic Growth, 2nd ed. Basingstoke and London: Macmillan.

    Book  Google Scholar 

  • Ferguson, A. 1767. An Essay on the History of Civil Society, ed. A. Kincaid and J. Bell. Edinburgh and London: A. Millar & T. Cadell.

    Google Scholar 

  • Gehrke, C., and H. Hagemann. 1996. Efficient Traverses and Bottlenecks: A Structural Approach. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 140–166. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Georgescu-Roegen, N. 1970. The Economics of Production. The American Economic Review 60 (2). Papers and Proceedings of the Eighty-Second Annual Meeting of the American Economic Association, May 1–9.

    Google Scholar 

  • Georgescu-Roegen, N. 1976. Energy and Economic Myths: Institutional and Analytical Economic Essays. New York: Pergamon Press.

    Google Scholar 

  • Goodwin, R. 1974. The Use of Normalized General Co-ordinates in Economic Analysis. In Economic Theory and Planning. Essays in Honour of A.K. Dasgupta, ed. A. Mitra, 26–38. Calcutta: Oxford University Press.

    Google Scholar 

  • Goodwin, R. 1983. Essays on Linear Economic Structures. Frankfurt: P. Lange.

    Google Scholar 

  • Goodwin, R., and M. Landesmann. 1996. Structural Change and Macroeconomic Stability in Disaggregated Models. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 167–187. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Goodwin, R.M., and L.F. Punzo. 1987. The Dynamics of a Capitalist Economy: A Multi-sectoral Approach. Boulder, CO: Westview Press.

    Google Scholar 

  • Grossman, G.M., and E. Helpman. 2002. Interest Groups and Trade Policy.

    Google Scholar 

  • Hagemann, H. 1990. The Structural Theory of Economic Growth. In The Economic Theory of Structure and Change, ed. M. Baranzini and R. Scazzieri, 144–171. Cambridge: Cambridge University Press.

    Google Scholar 

  • Hagemann, H., and R. Scazzieri. 2009. Capital Structure and Economic Transitions: An Introductory Essay. In Capital, Time and Transitional Dynamics, ed. H. Hagemann and R. Scazzieri, 1–39. Oxon and New York: Abingdon.

    Google Scholar 

  • Haken, H. 1984. The Science of Structure: Synergetics. New York: Van Nostrand Reinhold.

    Google Scholar 

  • Hansen, B.E. 2001. The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity. Journal of Economic Perspectives 15 (4): 117–128.

    Article  Google Scholar 

  • Hawkins, D., H.A. Simon, and A. Herbert. 1949. Some Conditions of Macroeconomic Stability. Econometrica 17 (3/4): 245–248.

    Google Scholar 

  • Helpman, E., and M. Trajtenberg. 1998. A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies. In General Purpose Technologies and Economic Growth, ed. E. Helpman. Cambridge: MIT Press.

    Google Scholar 

  • Hicks, J. 1973. Capital and Time. A Neo-Austrian Theory. Oxford: Clarendon Press.

    Google Scholar 

  • Kurz, H.D., and N. Salvadori. 1995. Theory of Production: A Long-Period Analysis. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Landesmann, M. 1986. Conceptions of Technology and the Production Process. In Foundations of Economics. Structures of Inquiry and Economic Theory, ed. M. Baranzini and R. Scazzieri, 281–310. Oxford and New York: Basil Blackwell.

    Google Scholar 

  • Landesmann, M. 1991. A. Smith’s Stages Theory of Economic Development. Wirtschaft und Gesellschaft, No. 9.

    Google Scholar 

  • Landesmann, M. 2015. Ricardian and Schumpeterian Rents: Fundamental Ingredients for Structural Economic Dynamics. In Resources, Production and Structural Dynamics, ed. M. Baranzini, C. Rotondi, and R. Scazzieri, 186–197. Cambridge University Press.

    Google Scholar 

  • Landesmann, M., and R. Scazzieri. 1990. Specification of Structure and Economic Dynamics. In The Economic Theory of Structure and Change, ed. M. Baranzini and R. Scazzieri, 95–121. Cambridge: Cambridge University Press.

    Google Scholar 

  • Landesmann, M., and R. Scazzieri. 1996a. The Production Process: Description and Analysis. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 191–228. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Landesmann, M., and R. Scazzieri. 1996b. Coordination of Production Processes, Subsystem Dynamics and Structural Change. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 304–343. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Lederer, E. 1931. Technischer Fortschritt und Arbeitslosigkeit. Tübingen: Mohr.

    Google Scholar 

  • Lowe, A. 1976. The Path of Economic Growth. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Luxemburg, R. 1951 [1913]. The Accumulation of Capital, trans. A. Schwarzschild; with an introduction by J. Robinson. London: Routledge and Kegan Paul.

    Google Scholar 

  • Magnan de Bornier, J. 1990. Vertical Integration, Growth and Sequential Change. In The Economic Theory of Structure and Change, ed. M. Baranzini and R. Scazzieri, 122–143. Cambridge: Cambridge University Press.

    Google Scholar 

  • Malthus, T.R. 1815. An Inquiry into the Nature and Progress of Rent and the Principles by Which it is Regulated. London: Murray.

    Google Scholar 

  • Marshall, A. 1893. On Rent. The Economic Journal 3.

    Google Scholar 

  • Marx, K. 1867. Das Kapital. Kritik der politischen Ökonomie, Erster Band. Hamburg: Verlag von Otto Meissner.

    Google Scholar 

  • Marx, K. 1978 [1885]. Capital: A Critique of Political Economy, vol. 2, trans. D. Fernbach; introduced by E. Mandel. Harmondsworth: Penguin Books.

    Google Scholar 

  • Neisser, H. 1931. Der Kreislauf des Geldes. Weltwirtschaftliches Archiv 33: 365–408.

    Google Scholar 

  • Neisser, H. 1942. Permanent Technological Unemployment: Demand for Commodities Is Not Demand for Labor. The American Economic Review 32 (March): 50–71.

    Google Scholar 

  • Olson, M. 1965. The Logic of Collective Action. Public Goods and the Theory of Groups. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Olson, M. 1982. The Rise and Decline of Nations, Economic Growth, Stagflation, and Social Rigidities. New Haven: Yale University Press.

    Google Scholar 

  • Pasinetti, L.L. 1973. The Notion of Vertical Integration in Economic Analysis. Metroeconomica 25 (1): 1–29.

    Article  Google Scholar 

  • Pasinetti, L.L. 1981. Structural Change and Economic Growth. A Theoretical Essay on the Dynamics of the Wealth of Nations. Cambridge: Cambridge University Press.

    Google Scholar 

  • Pasinetti, L.L. 1993. Structural Economic Dynamics. A Theory of the Economic Consequences of Human Learning. Cambridge: Cambridge University Press.

    Google Scholar 

  • Pasinetti, L.L. 2015. The Classical Theory of Rent. In Resources, Production and Structural Dynamics, ed. M. Baranzini, C. Rotondi, and R. Scazzieri, 72–94. Cambridge: Cambridge University Press.

    Google Scholar 

  • Peron, P. 1997. Further Evidence on Breaking Trend Functions in Macroeconomic Variables. Journal of Econometrics 80 (2): 355–385.

    Article  Google Scholar 

  • Petri, P. 1972. Convergence and Temporal Structure in the Leontief Dynamic Model. In Input-output Techniques: Proceedings of the Fifth International Conference on Input-output Techniques, ed. S. Brody and A.P. Carter, 563–573. Amsterdam: North-Holland Publ.

    Google Scholar 

  • Quadrio Curzio, A. 1986. Technological Scarcity: An Essay on Production and Structural Change. In Foundations of Economics. Structures of Inquiry and Economic Theory, ed. M. Baranzini and R. Scazzieri, 311–338. Oxford and New York: Basil Blackwell.

    Google Scholar 

  • Quadrio Curzio, A. 1996. Production and Efficiency with Global Technologies. In Production and Economic Dynamics, ed. M. Landesmann and R. Scazzieri, 105–139. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Quadrio Curzio, A., and F. Pellizzari. 1999. Rent, Resources, Technologies. Berlin: Springer.

    Google Scholar 

  • Quesnay, F. 1758. Tableau économique. Versailles.

    Google Scholar 

  • Ricardo, D. 1815. An Essay on Profits. London: John Murray.

    Google Scholar 

  • Ricardo, D. 1817. Principles of Political Economy and Taxation, 3rd ed., 1821. London: Murray.

    Google Scholar 

  • Rosenberg, N. 1976. Technological Change in the Machine Tool Industry, 1840–1910. In Perspectives on Technology, ed. N. Rosenberg, 9–31. Cambridge: Cambridge University Press.

    Google Scholar 

  • Scazzieri, R. 1993. A Theory of Production. Tasks, Processes and Technical Practices. Oxford: Clarendon Press.

    Google Scholar 

  • Scazzieri, R. 2009. Traverse Analysis and Methods of Economic Dynamics. In Capital, Time and Transitional Dynamics, ed. H. Hagemann and R. Scazzieri, 96–132. Abingdon, Oxfordshire, and New York: Routledge.

    Google Scholar 

  • Schefold, B. 1978. Fixed Capital as a Joint Product. Jahrbücher für Nationalökonomie und Statistik 192: 415–439.

    Article  Google Scholar 

  • Schumpeter, J.A. 1934. The Theory of Economic Development. Cambridge, MA: Harvard University Press (originally published in German in 1911).

    Google Scholar 

  • Segerstrom, P.S., T.C.A. Anant, and E. Dinopoulos. 1990. A Schumpeterian Model of the Product Life Cycle. The American Economic Review 80 (5): 1077–1091.

    Google Scholar 

  • Simon, H.A. 1962. Architecture of Complexity. Proceedings of the American Philosophical Society 106 (6): 467–482.

    Google Scholar 

  • Simon, H.A., and A. Ando. 1961. Aggregation of Variables in Dynamic System. Econometrica 29 (2): 111–138.

    Article  Google Scholar 

  • Smith, A. 1976 [1776]. An Inquiry into the Nature and Causes of the Wealth of Nations, general ed. R.H. Campbell and A.S. Skinner, textual ed. W.B. Todd. Oxford: Clarendon Press.

    Google Scholar 

  • Sraffa, P. 1960. Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.

    Google Scholar 

  • Stock, J.H., and M.W. Watson. 1996. Asymptotically Median Unbiased Estimation of Coefficient Variance in a Time Varying Parameter Model, NBER Technical Working Papers, National Bureau of Economic Research, Washington.

    Google Scholar 

  • Stone, R. 1954. Linear Expenditure Systems and Demand Analysis: An Application to the Pattern of British Demand. The Economic Journal 64 (255): 511–527.

    Google Scholar 

  • Stone, R., and J.A.C. Brown. 1962a. A Computable Model of Economic Growth, A Programme for Growth, 1, Published for the Department of Applied Economics. Cambridge: University of Cambridge; London: Chapman and Hall.

    Google Scholar 

  • Stone, R., and J.A.C. Brown. 1962b. Output and Investment for Exponential Growth in Consumption. The Review of Economic Studies 29 (80): 241–545.

    Article  Google Scholar 

  • Tugan Baranovsky, M.I. 1913 [1894]. Les crises industrielles en Angleterre. Paris: Giard et Brière.

    Google Scholar 

  • Turgot, A.R.J. 1769–1770. Réflexions sur la formation des richesses. Ephémérides du citoyen 1769 (11, 12); 1770 (1).

    Google Scholar 

  • von Böhm-Bawerk, E. 1889. Kapital und Kapitalzins, vol. II: Positive Theorie des Kapitals. Innsbruck: Wagner.

    Google Scholar 

  • von Hayek, F.A. 1941. The Pure Theory of Capital. London: Routledge & Kegan Paul.

    Google Scholar 

  • von Neumann, J. 1935–1937. Uber ein Okonomisches Gleichungs-System und eine Verallgemeinerung des Brouwerschen Fixpunktsatzes. In Ergebnisse eines Mathematischen Kolloquiums, VIII, 73–83. Vienna (English translation: A Model of General Equilibrium. The Review of Economic Studies 9: 1–9).

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. The Vienna Institute for International Economic Studies and Johannes Kepler University, Vienna, Austria

    Michael Landesmann

Authors
  1. Michael Landesmann
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Michael Landesmann .

Editor information

Editors and Affiliations

  1. Goldsmiths, University of London, London, United Kingdom

    Ivano Cardinale

  2. Department of Economics, University of Bologna, Bologna, Italy

    Roberto Scazzieri

Copyright information

© 2018 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Landesmann, M. (2018). Political Economy of Structural Change. In: Cardinale, I., Scazzieri, R. (eds) The Palgrave Handbook of Political Economy. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-44254-3_19

Download citation

  • DOI: https://doi.org/10.1057/978-1-137-44254-3_19

  • Published:

  • Publisher Name: Palgrave Macmillan, London

  • Print ISBN: 978-1-137-44253-6

  • Online ISBN: 978-1-137-44254-3

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation