[skip to content]

Centre for Development, Environment and Policy (CeDEP)

Political Economy of Public Policy

Course Code:
Unit value:

About this Module

Technical specialists (researchers, development workers, even policy advisors) often get frustrated that policies that are actually adopted and/or implemented deviate far from their technical recommendations. In economics, this is often referred to as ‘state failure’: the state does not do what economists would like it to do to promote market development and efficiency, what those concerned with poverty would like it to do to reduce poverty, or what those concerned with the environment would like it to do to protect environmental resources. Glaring inequality may be reproduced for generations. Whilst there are technical dimensions to ‘state failure’, including imperfect information, there are clearly also other factors at play. It is rarely straightforward to talk about an undisputed ‘public interest’ that the state should be pursuing and indeed it can be quite misleading to talk about ‘the state’ as if it were a single, monolithic entity. Instead, multiple actors with competing or conflicting interests seek to influence the actions of a variety of state agencies to protect or further their own ends. The relative power of these groups is then important in determining outcomes.

This module explores the interactions between politics and policy, seeking to understand actual policies as the outcome of interaction between rational politicians and the people and groups who help them acquire and retain power. Moreover, policy-making both faces economic constraints and generates economic outcomes that affect future distributions of power within society. Thus, political economy explores the two-way interaction between economics and politics.

This module is aimed at policy-makers, policy analysts, advocates and practitioners – from academia, government departments, international development agencies, NGOs, private business or other civil society groups – who are involved in the design of policy to promote development, to combat poverty or to protect the environment. The module draws on theory from both developed and developing countries, but the application is more to the latter. In common with some other CeDEP modules, there is also an emphasis on policies affecting rural space. However, more general lessons can be drawn from the module.

As a result of studying this course, students will be equipped to understand how political processes and forces influence policy-making and to assess what needs to change if policy is more effectively to promote rural development, poverty reduction or environmental protection in the area where they work.

Objectives and learning outcomes of the course

On successful completion of the module students will be able to:

  • apply the concept of rents to the analysis of state organisations, policy and performance
  • explain how political and economic power interact to create and perpetuate inequality, and what might be done to challenge it
  • assess the potential for competitive electoral politics to encourage more pro-poor policy-making in countries where the majority of the electorate is poor, and to identify interventions that could reinforce this
  • examine the influence of bureaucracies and interest groups over policy in practice, in the light of alternative theoretical models and experience in different parts of the world
  • describe the impacts of mineral resources and aid flows on governance and policy-making
  • explain and critically interpret how domestic political and economic considerations and power shape the outcomes of international negotiations.

Scope and syllabus

The module is broadly structured in three parts.

Part I: The first four units of the module introduce foundational political economy theories explaining how political and economic forces interact, describing how both leaders and policies are selected, examining the influence of voters and interest groups, and also exploring the role of the bureaucracy in policy implementation. These theories seek both to explain the dynamics of, and to contrast, oligarchic political systems and more open democratic systems. A critical question for development is what determines the transition from one system to the other.

Part II: The next five units apply these theories to a range of development debates, spanning sub-Saharan Africa, Latin America and Asia. Unit 5 explores the political, as well as the technical, determinants of state capacity. Unit 6 explores global trends in inequality and the drivers of these. Unit 7 considers the political as well as economic lessons to be learned from the Asian experience of broad-based growth in the latter half of the 20th century. In the light of the widespread transition to competitive electoral politics in most countries of Latin America and Sub-Saharan Africa, Unit 8 explores the conditions under which competitive politics may lead to more pro-poor policy-making in contexts where the majority of the electorate are poor. Unit 9 examines the political as well as economic impacts of mineral wealth and overseas development assistance (aid) on ‘beneficiary’ countries.

Part III: The final unit explores how domestic economic interests are projected into international negotiations, using negotiations on agricultural trade and climate change as examples.

Module sample

P527 module uses a core text which is specially written and will take you through your self-directed study. Exercises, assignments and other activities, such as self-assessment questions, film clips and animations are included to help you with learning. Most module study guides are now provided in electronic format on a USB flash memory stick, but can also be downloaded from the online learning environment. Click the linked image below to view a sample of our e-study guide: