Comparative Political Economy - Syllabus & Key Concepts

Vocabulary flashcards covering core terms, concepts, events, and methodological ideas from the lecture notes on Comparative Political Economy.

Comparative Political Economy (CPE)

A field that studies how markets and governments interact to shape economic outcomes across countries and over time; emphasizes the political context of economic processes.

Markets & Governments (in CPE)

Two fundamental forces in CPE; markets allocate resources through prices and contracts, while governments create rules and provide public goods and regulation.

An Intertwined Relationship

The idea that markets and governments are mutually dependent and shape each other; neither can be fully understood in isolation.

Varieties of Capitalism

A framework distinguishing different institutional configurations—primarily Liberal Market Economies (LMEs) and Coordinated Market Economies (CMEs)—that organize economic activity.

Liberal Market Economies (LMEs)

Competitive market arrangements with formal contracts and arm's-length relations; limited long-term commitments; emphasize radical innovation and general skills.

Coordinated Market Economies (CMEs)

Economies relying on coordinated efforts, network-based relationships, and long-term, trust-based relationships; emphasize incremental innovations and skills specific to jobs and firms.

Logic of Markets

A principle that channels resources toward the most competitive and profitable economic activities.

Logic of Governments

A principle that exercises political authority on behalf of the public interest to guide economic outcomes.

Market Failures

Situations in which markets on their own do not allocate resources efficiently, prompting government intervention (e.g., public goods, negative externalities).

Provision of Public Goods

Goods or services that are non-excludable and non-rivalrous and typically provided or financed by the government.

Regulations to combat negative externalities

Policies aimed at reducing costs external to private actors, such as pollution, through rules and standards.

Providing information and standardizing reporting

Policies to improve transparency and information availability to reduce market failures.

Markets need laws, regulations, and standards

A statement that regularizes market behavior and reduces information asymmetries.

Government Failures

When government intervention creates inefficiencies due to political incentives, bureaucratic constraints, or budget overruns.

State Capacity

The ability of a government to collect taxes, enforce laws, provide public goods, and implement policy; higher capacity supports stronger policy outcomes; limited capacity constrains it.

Economic Voting

Electoral outcomes influenced by the state of the economy; good economic performance increases the chance of incumbents being reelected.

Principal-Agent Problem

A situation where elected governments (agents) may not perfectly represent voters’ (principals) preferences, leading to accountability issues.

Society/History (missing piece in analysis)

Societal norms, culture, and historical trajectories shape economic institutions and policy outcomes, complementing markets and governments.

Reshaping following WWII

A key historical event that reorganized global economics and political economy institutions after World War II.

Global Pandemic (COVID-19) as a crucial event

A major shock affecting populism, protectionism, austerity, and policy variation across states, with lasting comparative implications.

Economic Institutions

Formal and informal rules governing production, exchange, and distribution, including property rights, financial systems, and regulation.

Theory, Definitions, and Ontology

Foundational concepts and philosophical stance about what exists and how to study economic phenomena.

Scientific Method in CPE

A sequence of Observation/Question, Theoretical Explanation/Hypotheses, and Data Collection/Analysis used to build empirical knowledge.

Observation/Question

The initial stage of inquiry where a phenomenon is noticed and questions are asked.

Theoretical Explanation/Hypotheses

Proposed reasoned explanations and testable predictions about a political-economic phenomenon.

Data Collection/Analysis

Empirical gathering and analysis of data to test hypotheses and support or refute theory.

Assumptions

Premises that simplify reality to guide inquiry and shape what questions are asked and how answers are interpreted.

Causation vs Correlation

Distinction between a causal relationship and a mere association between variables.

Large N vs Small N

Two methodological approaches: Large N uses many observations for generalizable conclusions; Small N uses in-depth, contextual case studies.

Seven-high Emission Sectors

Sectors targeted by the EU carbon border tax starting in 2026 to reduce emissions.

Carbon Tax on Imports (EU CBAM)

EU policy taxing imports to prevent carbon leakage and level the global playing field; designed to reduce industrial emissions and may affect developing countries.

Intended to protect European producers

Criticism that the carbon tax serves protectionist aims under the guise of climate policy.

Why a carbon tax?

Motives include leveling the playing field, preventing leakage, and reducing emissions; policy can have global effects.

Ramen and CPE

A teaching example linking micro-price changes (ramen) to macro shocks (inflation, energy costs) and to Japan’s economy.

Japan’s Government: A New Hope or Attack of Intervention?

Discussion of policy shifts (e.g., minimum wage) and how government action interacts with Japan’s economy.

Economic policy and inflation dynamics

How rising energy costs and inflation affect consumers, wages, and pricing within a capitalist economy.

Yen and exchange rate dynamics (contextual)

How currency values relate to inflation, growth, and price transmission in macroeconomic contexts.

Roll-out of carbon taxation: de-carbonization costs

Policy implications that decarbonization can be costly for developing countries and for global trade patterns.

Large N. vs. Small N. (expanded)

Generalization from many cases vs. deep dive into few cases to test theories across contexts.

Role of Comparative Analysis in CPE

Contextualizing other political economies, classifying typologies, and testing theories across countries.

Global Economic Shocks as teaching tools

Episodes like WWII reshaping institutions, the 2007-2008 crisis, 2016 austerity, and COVID-19 used to illustrate CPE dynamics.