October, 2019

Governance within a system of entangled political economy

  • Richard Wagner

    Distinguished Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
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Economists necessarily use models in thinking about their material because there is no alternative given the complexity of the material we face. But through what kinds of models might we use to theorize about the problem of governance? There is a choice between theoretical frameworks in this respect. The most common framework is organized around an equilibrium allocation of resources. One major problem with this framework is that resources cannot allocate themselves, for only people can do that. And they do so through interacting with one another inside some institutional framework that governs those interactions. In consequence, this paper conceptualizes governance from within a framework of entangled political economy, in contrast to the standard framework of additive political economy. This paper explores several respects in which entangled political economy diverges from additive political economy.