Politics of Econ Reform

3 Credits · Level: Graduate, Undergraduate

Why are some countries rich and other countries poor? This has been a subject of heated debate among policymakers and scholars stretching as far back as Ancient Greece. Until recently, modern thought on why some countries are wealthy and others are not has tended to focus primarily on narrow economic issues, such as openness to trade and macroeconomic policy. However, a consensus is growing that politics, not economic policy, is the most important factor that determines countries growth trajectories. Macroeconomic policies may be proximate causes of economic growth (or lack thereof) yet these policies derive from political incentives. This raises the fundamental paradox of the political economy of development: why do leaders choose policies that discourage economic growth? Understanding why countries choose the economic policies they do is the main objective of this course.