Political economy
Will you help us to rethink the relationship between government, markets and society, to make our economies work better for everyone?
Helping societies to thrive not just survive
A new political economy has emerged over the last 30 years. It reconnects the discipline of economics to its roots, drawing on the ideas of major figures such as Adam Smith, Friedrich Hayek and Karl Marx, whose questions remain relevant in the world today, and can be studied using modern theoretical approaches and empirical methods.
A corollary of these new approaches is that policy prescriptions must consider how policies will be implemented and can be made politically sustainable. We need to rethink our approach in a new integrated sub-discipline of political economy by building a degree of social and political cohesion that is sensitive to power structures and that understands who gains and loses from policy changes. It will mean connecting not only politics and economics but also drawing on insights from psychology and sociology that stress that the roots of cohesive policy-making lie as much in informal norms and values as in formal rules.
And we must ask fundamental questions about the economies and societies that we live in, as well as about how to change them. We need to explore the values that constitute human flourishing and develop normative frameworks, as well as understanding how are they supported by cherished liberal values such as freedom and self-determination.
These are important inputs into debates about the benefits and costs of market and state-led systems of resource allocation in a world where there is an increased sense that there are limits, political and technical, on the ability of states to extract tax resources from their citizens.
LSE already has enormous expertise in helping to study these issues, providing both an understanding of deep conceptual questions but also practical policy-relevant knowledge. While each community and polity will have its own unique set of challenges, our approach to political economy will facilitate a joined-up understanding as well as exploring points of disagreement through respectful academic dialogue. We will train future leaders, bring together colleagues from across LSE and engage policy makers in creating solutions for our world.
How do we reimagine markets and governments to enable everyone to thrive?
If you would like to discuss how you could partner with us to shape our work on political economy, contact us at shapingtheworld@lse.ac.uk.
Guiding tax reforms in Chile
In 2016, LSE’s Dr Tasha Fairfield presented crucial research that looked not only at profits that companies make in Latin America, but also, for the first time, the proportion of profits retained by firms to avoid taxation. This research has directly informed the design of major tax reforms in Chile.
Join in
Changing the focus of public policy
Channelled through high-profile publications and media work, LSE research has raised public awareness of, and engagement with, the science of wellbeing and happiness. This insight has contributed significantly to promoting subjective wellbeing as a central objective of public policy. It also provided new tools to support measurement of wellbeing.
Join in
Understanding a well-functioning economy
LSE research has made a significant contribution to understanding state development and the causes of state fragility, shaping the work of multilateral development agencies. The insight emphasised that a well-functioning, sustainable market economy should be well-governed, resilient, inclusive, environmentally friendly, and integrated, as well as competitive.
Join in
Shaping ideas for impact
Drive new research that reimagines a political framework where markets and governments work better for everyone.
Shaping transformative learning
Help train future leaders to create joined-up solutions that enable all citizens to thrive.
Shaping our community
Our global LSE community working together to bring about change.