Political economy
We need economies that work in the real world
Too many entrenched economic ideas are failing.
The dominant market systems of the last 50 years won’t survive the next. The world is changing faster than our economic ideas can keep up. Inequality is widening, political unrest is growing, and climate change threatens our very survival. AI promises breakthroughs but also disruption on a scale we’ve never seen before. Meanwhile, power is concentrating in the hands of a small number of technology companies that are reshaping our markets and societies.
The old economic playbook, built on deregulation and globalisation, has run its course. It delivered progress, but also deep flaws: soaring wealth gaps and systems unable to cope with today’s realities.
We need to shape a better way - an economic vision that works for everyone, not just on paper.
This is a moment for bold thinking. If we don’t act soon, the vacuum will be filled by authoritarian populism and state-run capitalism. We need capable and democratic states, able to satisfy citizens’ aspirations not only for widely shared material prosperity, but for meaning, community and respect.
We’re uniting world-leading experts across disciplines to build a positive and practical alternative to the current economic framework – one that not only replaces failing systems but offers a compelling choice over illiberal models. Moving beyond narrow academic silos, we’re fostering dialogue, testing prototypes with governments and institutions, and turning research into impact.
We need to study the entirety of how the economy functions - the kinds of communities it develops, the kind of sensibilities it supports, and the kind of political processes that enable us to have effective economic policies.
LSE has shaped global economic thinking for over a century.
Social democracy and neoliberalism were born here at LSE, and great economic minds like Beveridge and Hayek were fostered here. Today, the need for leadership is urgent again, and no institution is better placed to deliver it. Whether it’s convening world-class scholars and practitioners to explore a successor to the neoliberal Washington Consensus through The London Consensus project, or formulating new thinking about how to create an economic system that works for all through the Programme for Cohesive Capitalism - LSE has the outstanding faculty, vibrant student community, and direct routes to governments and policymakers to shift the dial.
Help us create the new ideas that will shape the next economic paradigm.
By supporting LSE, you will power research that reimagines the relationship between markets, government and society.
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.
How LSE research is shaping the world.
Below are some examples of ground-breaking research that LSE is doing to shape a new political economy.
The Programme on Cohesive Capitalism
Thanks to a transformational gift from the Open Society Foundations LSE launched this major new multidisciplinary initiative in 2024 to address fundamental questions about the kind of world we want and what is needed to bring it about.
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Guiding tax reforms in Chile
LSE presented crucial research that looked not only at profits that companies make in Latin America, but also the proportion of profits retained by firms to avoid taxation. This research directly informed the design of major tax reforms in Chile.
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Understanding a well-functioning economy
LSE research - State capacity: crafting effective development strategies - has made a significant contribution to understanding state development and the causes of state fragility, shaping the work of multilateral development agencies.
Join inI decided to study politics and economics, firstly because growing up in Pakistan, I just had this inclination towards politics and how it sort of interacts with many economic factors. I plan to go back to Pakistan and use my LSE degree to effect good policy changes within the country.
Outstanding students need your support as we shape a new political economy
Support our Scholarship and Hardship Funds.
Shaping ideas for impact
Drive new research that reimagines a political framework where markets and governments work better for everyone.
In this short film, Professor Larry Kramer, LSE President and Vice Chancellor, explains why political economy is one of the global challenges that our Shaping the World Campaign is focusing on.