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 |  Power & Choice, 8/e W. Phillips Shively,
University of Minnesota---Minneapolis
Political Economy of the State
Chapter Overview| This chapter introduces the basic aspects of political economy. It discusses three economic issues that states have to grapple with—economic growth, controlling inflation and unemployment, and the distribution of economic resources and inequality. The chapter then explores the role of central banks in helping governments manage their economies and how corruption hampers the ability of governments to do so. The chapter ends with two detailed examples. The first is a discussion of the main features of Germany’s political economy (highlighting its labor policy; its regulatory polices regarding how goods are produced, classified and sold; and its anti-inflation policy). The second example discusses Indonesia’s economic growth under Suharto and how its economy is faring in the aftermath of the Asian economic crisis.
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2003 McGraw-Hill Higher Education