We’ll be comparing countries today based on their respective approaches to political economy; that is, on how the economic systems apportion the relative influences of the market, state, and civil society sector in the economy. Often, work on political economy tends to focus on the state/market nexus at the expense of civil society. We saw earlier in the course (Alesina and Guiliano) that attitudes and ideologies in the civil society sector can have a dramatic impact on economic patterns within society.
At the end of the lecture today, we’ll look at trends in economic liberalization worldwide over the last decade or so by means of a report from the US Federal Reserve Bank of Dallas, and this map from the Heritage Foundation annual report on economic freedom around the world.
(The darker the color, the more economically free is that country’s economy.)