In Quest of the Political: The Political Economy of Development Policy Making

CID Working Paper No. 17

Merilee S. Grindle
June 1999


This paper explores some of the central debates in the application of political economy to development policy making. It is particularly concerned with the connection between theory, empirical observation, and the practice of policy decision making. It explores distinct traditions of political economy, some drawn from economics, others based in sociological theory, that generate distinct insights about why and when change is likely to occur in policies and institutions. The paper then raises the question of whether such traditions provide effective guidance about the politics of decision making and the process of policy reform and whether they generate helpful insights for reformers interested in encouraging such processes. It suggests that current approaches to political economy present a stark tradeoff between parsimony and elegance on the one hand and insight into conflict and process on the other. Both both traditions of political economy borrow assumptions about political interactions from contexts that may not be fully relevant to developing and transitional countries. In addition, when theory is compared to the extensive empirical literature that now exists about experiences for policy and institutional change, it fails to provide convincing explanations for some of the most important characteristics of real world politics--leadership, ideas, and success. Further, much theoretical and empirical work in political economy has fallen far behind in exploring the policy agendas that now confront developing and transitional countries.

Keywords: political economy of development, policy making in developing countries, policy reform, development policy choice

JEL codes: O20