The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Politics and Economics

  • V. K. Borooah
Reference work entry


No great powers of persuasion are required to establish the connection between politics and economics. In democracies it is ‘obvious’ that, to quote Harold Wilson, former Prime Minister of Great Britain, ‘the standing of a Government and its ability to hold the confidence of the electorate of a General Election depends upon the success of its economic policy’. Given this dependence of political popularity on economic performance it is equally ‘obvious’ that a Government will try to manipulate its economic policy in such a way as to produce the most favourable outcomes just before election day, leaving the less favourable outcomes to occur at other times. Such behaviour on the part of governments is described in the literature as generating a ‘political business cycle’.

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


  1. Boddy, R., and J. Crotty. 1975. Class conflict and macro-policy: The political business cycle. Review of Radical Political Economics 7(1): 1–19.CrossRefGoogle Scholar
  2. Borooah, V.K., and F. van der Ploeg. 1984. Political aspects of the economy, Department of Applied Economics occasional paper 55. Cambridge: Cambridge University.Google Scholar
  3. Butler, D., and D. Stokes. 1974. Political change in Britain. London: Macmillan.CrossRefGoogle Scholar
  4. Converse, P.E. 1958. The shifting role of class in political attitudes and behaviour. In Readings in social psychology, ed. E.E. Maccoby, T.M. Newcomb, and E.L. Hartley. London: Methuen.Google Scholar
  5. Frey, B.S. 1984. Public choice and global politics. International Organization 38: 199–223.CrossRefGoogle Scholar
  6. Heclo, H., and A. Wildavsky. 1981. The private government of public money. London: Macmillan.CrossRefGoogle Scholar
  7. Hibbs, D.A. 1982. Economic outcomes and political support for British Governments among occupational classes: A dynamic analysis. American Political Science Review 76: 259–279.CrossRefGoogle Scholar
  8. Kalecki, M. 1943. Political aspects of full employment. Political Quarterly 14: 322–331. Reprinted in Kalecki, M. Essays on the dynamics of the capitalist economy, 1933–70. Cambridge: Cambridge University Press.Google Scholar
  9. Olsen, M. 1965. The logic of collective action. Cambridge: Cambridge University Press.Google Scholar
  10. Stigler, G.J. 1973. General economic conditions and national elections. American Economic Review 63: 160–167.Google Scholar
  11. van Winden, F.A.A.M. 1983. On the interaction between state and private sector. Amsterdam: North-Holland.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • V. K. Borooah
    • 1
  1. 1.