Content:

  •  Introduction to Political Economy
  • Theories of Political Economy
  • History and Development of Political Economy
  • Nature of Pakistan's Political Economy
  • Importance of Political Economy
  • Political Economy in Academia
  • Modern Applications of Political Economy

                                            Introduction of Political Economy

Definition:

               Political Economy is an interdisciplinary branch of the social sciences. It focuses on the interrelationships of individuals, governments and public policy.

Scholars Definition:

   ''The study of economic and political forces that shape the world around us''

                                                                                                                              (David Harvey)

Who coined the term ''Political Economy''?

            Adam Smith is generally considered the father of economics and of the political economy. But J.S Mill and Jean-Jacques Rousseau also used the term political economy in their theories.

Landmarks:

  •  The wealth of nations by Adam Smith
  • Principles of political economy by John Stuart Mill

Theories of Political Economy

  There are several type of political economies:

  • Socialism:

This type of political economy promotes the idea that the production and distribution and wealth are maintained and regulated by society, rather than a particular group of people.

The idea behind this is that whatever is produced by society is done so because of those who participate, regardless of status' position or wealth. Socialism aims to bridge the between rich and poor.

  • Capitalism:

              This theory advocates the concept of free markets to regulate and drive the economy on their own. The idea behind capitalism is that private individuals and entities are driven by their own interests, they control production and distribution, set prices, and create supply and demand.

  • Communism:

              Communism was a theory developed by who Karl Max felt that capitalism was limited and created a big divide between rich and poor. He believed in shared resources, including property.

History and Development of Political Economy 

             The roots of political economy found in  18th century, some of the earlier works that examined this phenomenon include by Adam Smith and John Stuart Mill.

Adam Smith

               Smith was a Scottish philosopher, and writer who is referred to as the father of economics and of the political economy. His most famous work, An inquiry into the nature and causes of the wealth of nations (The Wealth of Nations) helped shape classical economic theory.

John Stuart Mill

        The Englishman Mill combined economics with philosophy. He believed in utilitarianism that actions that lead to peoples good will are right that lose that lead to suffering are wrong. His famous works include principle of political economy, utilitarianism, A system of Logic.

Nature of Pakistan's Political economy:

 Pakistan's political economy is characterized by:

Hybrid political system and Elite groups dominance:

  A mix of democratic and authoritarian elements, with a powerful military and bureaucratic establishment. Feudal landlords, industrialists, and military officers hold significant political and economic power.

Dependence on external aid:

      Pakistan relies heavily on foreign assistance, which can impact its economic sovereignty.
 Informal Economy: 
        A large portion of economic activity across regions, with legal dominating the economy. Frequent changes in government and political unrest hinder long-term economic planning and development.
 

Regional disparities and political instability:

         Economic development varies significantly across, with legal dominating the economy. Frequent changes in government and political unrest hinder long-term economic planning and development.

Military's economic role:

 The military has significant economic interests and influence, including control over key sectors like defense production and real state. 

Corruption and nepotism:

  Widespread corruption and favoritism hinder economic growth and perpetuate inequality.
 

Importance of Political Economy:

Political Economy studies both how the economy affects politics and how politics affect the economy. As political parties come to and leave power, economic policy often changes in a country accordance with the ideology and goals of the party in power.
Political changes can impact many areas  of the economy, which can in turn impact elections and government politics. These areas include:

  • Monetary and fiscal policy (is the use of government spending and taxation to influence the economy)
  • Food security
  • Global trade 
  • Labor supply, demand and crises
  • Gross Domestic Product (GDP)
  • Financial inequality 
  • Disaster management 
  • Environmental stability

Political Economy in Academia:

    Political economy has become an academia discipline of its own. Many major institutions offer the study as part of their political science, economies and sociology departments. Political economists conduct research to determine how public policy influences behaviour, productivity, and trade. Also how money and power are distributed between people and different groups.
The study may be approached in any of three ways:

  • Interdisciplinary studies:

           The interdisciplinary approach draws on sociology, economies and political science to define how government institutions  an economic system and political environment affect and influence each other.