The Strategic Model of Politics and Policy

Abstract

A major limitation of neoclassical economic theory, which dates back to the late nineteenth century, is an inability to model both economic and political change. Chapter 3 made it clear that the neoclassical growth model has nothing to say about the political process. Even the new political economy, which emerged in the 1970s and 1980s, involves only the application of static neoclassical theory to an analysis of policy formulation. It is also theoretically indeterminate in the sense that it contains no criteria for discriminating between a large number of possible theoretical forms. And it is totally divorced from the economic growth literature. An attempt will be made in this chapter to show how economic and political change can be related, by employing the dynamic-strategy model.