Political Economy

Ignacio Jurado

Spring Semester, 2021-22

E-mail: ignacio.jurado@uc3m.es
Class Hours: Tuesday 10-13 Office Hours: Tuesday 14.30-15.30
Class Room: 18.1.A04 Office: 18.2.A.05

Course Description
This course aims at introducing students to the main questions, debates, and contributions in the
field of political economy, broadly understood as the study of the effects of social,political and
institutional variables on economic outcomes.

Structure of the Class

Each session will consist of a presentation of the topic by the professor, an introduction to some
required readings by one or more students, and an open discussion with the rest of the class. See
course requirements below

Requirements and Evaluation

Students are expected to attend all seminars, read all the required readings for each week before
each meeting, and participate actively in class. Students will also have to introduce some of the
required readings at least once in the course, setting up the discussion of the texts, and write a
research paper at the end of the course on a topic related to the course and previously agreed
with the professor (the deadline for its submission will be announced in class). In the last meeting
of the course, each student will present an outline of their research paper, to be openly discussed
by the rest of the class

Evaluation
• Research paper (60%)

• Discussion points (20%) .- To be submitted Mondays at midday (12pm).

• Presentation of a reading in class (10%)

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• Participation in class discussions (10%)

Outline
The outline is subject to change. Each week I will indicate any specific change in the readings.

Week 1: Political Institutions, Development and Growth

Required

• Acemoglu, Johnson, and Robinson. 2002. “Reversal of Fortune: Geography and Institutions
in the Making of the Modern World Economy.” Quarterly Journal of Economics 1231-1296.

• Przeworski, Adam. 2004. “The Last Instance? Are Institutions the Primary Cause of
Economic Development?” European Journal of Sociology 15: 165-188.

• Glaeser, E., La Porta R., Lopez-de-Silanes F, Shleifer A. 2004. “Do Institutions Cause
Growth?” Journal of Economic Growth 9: 271-303.

• Banerjee, Abhijit, and Lakshmi Iyer. "History, institutions, and economic performance: The
legacy of colonial land tenure systems in India." American Economic Review 95.4 (2005).

Recommended

• Krugman, Paul. 1991. “History Versus Expectations.” Quarterly Journal of Economics 105:
651-67.

• Barro, Robert. 1997. Determinants of Economic Growth. Cambridge, Mass.: MIT Press.

• Nunn, Nathan. 2008. “The Long-term Effects of Africa’s Slave Trades.” The Quarterly
Journal of Economics. 123(1): 139–176.

• Dell, Melissa. 2010. “The Persistent Effects of Peru’s Mining Mita.” Econometrica. 78(6):1863–1903.

• Wade, Robert. 1990. “Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization.” Princeton: Princeton University Press.

• North, Douglas and Barry Weingast. 1989. “Constitutions and Commitment: The Evolu-
tion of Institutions Governing Public Choice in Seventeenth Century England.” Journal of
Economic History. 49(4): 803-832.

• Sachs, Jeffrey D. 2003. “Institutions Don’t Rule: Direct Effect of Geography On Per Capita
Income.” NBER Working Paper No.9490.

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Week 2: The State

Required

• Abramson, Scott F. "The economic origins of the territorial state." International Organization
71.1 (2017): 97-130.

• Queralt, Didac. "War, international finance, and fiscal capacity in the long run." Interna-
tional Organization 73.4 (2019): 713-753.

• Blaydes, Lisa, and Christopher Paik. "The impact of Holy Land Crusades on state forma-
tion: war mobilization, trade integration, and political development in medieval Europe."
International Organization (2016): 551-586.

• Garfias, Francisco. "Elite competition and state capacity development: Theory and evidence
from post-revolutionary Mexico." American Political Science Review 112.2 (2018): 339-357.

Recommended

• Freeman, John R. and Dennis P. Quinn. 2012. “The economic origins of democracy recon-
sidered.”” American Political Science Review 106(1):58-80.

• Boix, Carles and Susan Stokes. 2003. “Endogenous Democratization.” World Politics 55(4):
517-49.

• Treisman, Daniel. 2020. “Economic Development and Democracy: Predispositions and

Triggers.” Annual Review of Political Science.

• Albertus, Michael, and Victor Menaldo. 2014. “Gaming democracy: elite dominance during
transition and the prospects for redistribution.” British Journal of Political Science. 44(3):
575-603.

Week 3: Preferences for Redistribution

Required

• Lupu, N. and Pontusson, J. (2011). The Structure of Inequality and the Politics of Redistri-
bution. American Political Science Review, 105(2)

• Iversen, Torben and David Soskice. 2001. “An Asset Theory of Social Policy Preferences.”
American Political Science Review. 95(4): 875-893.

• Shayo, Moses. 2009. “A Model of Social Identity with an Application to Political Economy:
Nation, Class, and Redistribution.” American Political Science Review 103: 17-74.

• Rehm, Philipp, Jacob S. Hacker, and Mark Schlesinger. "Insecure alliances: Risk, inequality,
and support for the welfare state." American Political Science Review (2012): 386-406.

Recommended

• Meltzer, A. H. and Richard, S. F. (1981). A Rational Theory of the Size of Government.Journal

of Political Economy, 89(5):914–927

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• De la O, Ana and Jonathan Rodden. 2008. "Does Religion Distract the Poor?: Income and
Issue Voting Around the World." Comparative Political Studies 41: 437-76.

• Holland, A. C. (2018). Diminished Expectations: Redistributive Preferences in Truncated

Welfare States.World Politics, 70(4):555–594

• Rehm, P. (2011). Social Policy by Popular Demand.World Politics, 63(2):271–299

• Fernández-Albertos, José and Alexander Kuo. 2018. “Income perception, information, and
progressive taxation: Evidence from a survey experiment.” Political Science Research and
Methods. 6(1): 83-110.

Week 4: The Macro-Level: Re(distribution)

Required

• Moene, Karl Ove, and Michael Wallerstein. "Inequality, social insurance, and redistribu-
tion." American Political Science Review 95.4 (2001): 859-874.

• Wong, M. (2017) Median Voter and Power Resources Revisited: a Composite Model of
Inequality.European Political Science Review, 9(4): 607-628.

• Diaz-Cayeros, Alberto, Federico Estévez, and Beatriz Magaloni. The political logic of
poverty relief: Electoral strategies and social policy in Mexico. Cambridge University Press,
2016. Chapters to be determined

• Persson, Torsten, and Guido Enrico Tabellini. The economic effects of constitutions. MIT
press, 2005. Chapters 2 and 6.

Recommended

• Alesina, A., Glaeser, E., and Sacerdote, B. (2001). Why Doesn’t the United States Have a
European-Style Welfare State ? Brookings Papers on Economic Activity, 2:1–69

• Iversen, T. and Soskice, D. (2006). Electoral Institutions and the Politics of Coalitions: Why
Some Democracies Redistribute More Than Others. American Political Science Review, 100
(02):165–181

• Persson, T. and Tabellini, G. (2009). Electoral Systems and Economic Policy. In Wittman, D.
A. and Weingast, B. R., editors,Oxford Handbook of Political Economy. Oxford University
Press

• Bradley, D., Huber, E., Moller, S., Nielsen, F., and Stephens, J. D. (2003). Distribution and
Redistribution in Postindustrial Democracies.World Politics, 55(02):193–228

Week 5: Taxes and Voter Responses

Required

• Kenneth Scheve and David Stasavage. 2010. The Conscription of Wealth: Mass Warfare
and the Demand for Progressive Taxation. International Organization, 64(04):529–561

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• Mares, I. and Queralt, D. (2015). The Non-Democratic Origins of Income Taxation.Comparative

Political Studies, 48(14):1974 – 2009.

• Beramendi, Pablo, and David Rueda. "Social democracy constrained: Indirect taxation in
industrialized democracies." British Journal of Political Science (2007): 619-641.

• Orriols, Lluís. "Social spending, partisan bias and vote choice. Evidence from the US."
Electoral Studies 29.1 (2010): 54-65.
Recommended
• Nordhaus, William. 1975. “The Political Business Cycle.” Review of Economic Studies
April: 169-90.

• Hibbs, D. A. (1977). Political Parties and Macroeconomic Policy. American Political Science
Review, 71(4):1467–1487

• Alesina, A. and Passalacqua, A. (2016). The Political Economy of Government Debt.In

Handbook of Macroeconomics, pages 2599–2651. Elsevier, Amsterdam

• Leachman, L. L. and G. Rosas and P. Lange and A. Bester. 2007. The Political Economy of
Budget Deficits. Economics Politics. 19(3):369–420.

Week 6: Models of Capitalism

Required
• Peter Hall and David Soskice. 2001. “Introduction” in Hall and Soskice, eds.,Varieties of
Capitalism, pp 1-70.

• Esping-Andersen, G. (1990).The Three Worlds of Welfare Capitalism. Princeton University

Press, Princeton.

• Fleckenstein, T. and Lee, S. C. (2017). The Politics of Labor Market Reform in Coordinated
Welfare Capitalism. World Politics,69(01):144–183.

• Lindvall, J. and Rueda, D. (2014). The Insider-Outsider Dilemma. British Journal of Polit-
ical Science British Journal of Political Science British Journal of Political Science B.J.Pol.S,
44(2):460–475
Recommended
• Swenson, P. A. (2002).Capitalists against Markets, The Making of Labor Markets and Wel-
fare States in the United States and Sweden. Cambridge University Press, New York

• Calmfors, Lars, and John Driffill. "Bargaining structure, corporatism and macroeconomic
performance." Economic policy 3.6 (1988): 13-61.

• Freeman, R. (2007). Labor Market Institutions Around the World. In The Handbook of
Industrial and Employment Relations.Sage,London.

• Mares, I. (2005). Social Protection around the World. External Insecurity, State Capacity,
and Domestic Political Cleavages. Comparative Political Studies, 38(6):623–65.

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• Fernández-Albertos, J. and Manzano, D. (2014). Dualism and support for the welfare
state.Comparative European Politics.

Week 7: Federalism and Decentralization

Required

• Balcells, L., Fernández-Albertos, J., and Kuo, A. (2015). Preferences for Inter-Regional Re-
distribution.Comparative Political Studies,48(10):1318–1351.

• Beramendi, Pablo. (2007) “Inequality and the Territorial Fragmentation of Solidarity.” In-
ternational Organization.

• Rodden, Jonathan. "The dilemma of fiscal federalism: Grants and fiscal performance
around the world." American Journal of Political Science (2002): 670-687.

• Cai H, Treisman D. 2005. “Does Competition for Capital Discipline Governments? Decen-
tralization, Globalization, and Public Policy.”American Economic Review".

Recommended

• Weingast, Barry R. "The economic role of political institutions: Market-preserving federal-

ism and economic development." Journal of Law, Economics, Organization (1995): 1-31

• Rodden, Jonathan, and Susan Rose-Ackerman. "Does federalism preserve markets?." Vir-
ginia law review (1997): 1521-1572

• Bakke, Kristin, and Erik Wibbels “Regional Inequality, Ethnic Diversity and Conflict in
Federal States” World Politics (October 2006): 1-5

• E. Gibson, E Calvo, and Tullia Falleti 2004 “Reallocative Federalism: Overrepresentation

and Public Spending in the Western Hemisphere”. In Edward L. Gibson (ed.) Federalism
and Democracy in Latin America, Baltimore: Johns Hopkins University Press, 2004, 173-
196.

Week 8: Geography

Required

• Gallego, A., Buscha, F., Sturgis, P., and Oberski, D. (2014). Places and Preferences:A Lon-
gitudinal Analysis of Self-Selection and Contextual Effects.British Journal of Political Sci-
ence,pages 1–22,

• Enos, R, (2017). The Space Between Us. Social Geography and Politics. New York:Cambridge
University Press. Chapters to be determined

• Stephen Ansolabehere, Jonathan Rodden, and James Snyder. “Purple America.” Journal of
Economic Perspectives

• Wendy Tam Cho, James Gimpel, and Joshua Dyck. “Residential Concentration, Political
Socialization, and Voter Turnout.” The Journal of Politics 68, 1: 156-67

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Recommended

• Rodden, J, (2019). Why Cities Lose. The Deep Roots of the Urban-Rural Political Divide.
New York: Basic Books

• Cutler, Fred. 2007. “Context and Attitude Formation: Social Interaction, Default Informa-
tion, or Local Interests?” Political Geography 26: 575-600

• Edward Glaeser, Matthew Kahn, and Jordan Rappaport. 2007. “Why do the Poor Live in
Cities? The Role of Public Transportation.” Journal of Urban Economics

• Edward L. Glaeser, David Cutler, and Jacob L. Vigdor. 2005. “Is the Melting Pot Still Hot?
Explaining the Resurgence of Immigrant Segregation.” Working Paper, Harvard Economics

Week 9: Globalization and the State

Required

• Rodrik, Dani (2011). The Globalization Paradox: Democracy and the Future of the World
Economy. Chapters 9 and 10. Oxford University Press.

• Iversen, Torben, and Thomas R. Cusack (2000). “The Causes of Welfare State Expansion:
Deindustrialization or Globalization?” World Politics, 52 (3): 313- 349.

• Rudra, Nita (2002). “Globalization and the Decline of the Welfare State in Less- Developed
Countries,” International Organization, 56: 411-445.

• Burgoon, B. (2001). Globalization and Welfare Compensation: Disentangling the Tiesthat

Bind.International Organization, 55(3):509–55

Recommended

• Cameron, David R. (1978). “The Expansion of the Public Economy: A Comparative Analy-
sis,” American Political Science Review, 72: 1243-1261.

• Hirst, Paul, and Grahame Thompson. "Globalization and the future of the nation state."
Economy and Society 24.3 (1995): 408-442.

• Evans, Peter. (1997).“The eclipse of the state? Reflections on stateness in an era of global-
ization,” World Politics 50(1): 62-87.

• Hines, J. R. and Summers, L. H. (2009). How Globalization Affects Tax Design

Week 10: The Transformations of Postindustrial Societies

Required

• Walter, Stefanie. 2017. “Globalization and the demand-side of politics: How globalization
shapes labor market risk perceptions and policy preferences.” Political Science Research
and Methods. 5(1): 55-80.

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• Hausermann, S. and Kriesi, H. (2015). What do Voters Want? Dimensions and Config-
rations in Individual-Level Preferences and Party Choice. In Beramendi, P., Hausermann,S.,
Kitschelt, H., and Kriesi, H., editors,The Politics of Advanced Capitalism, pages 202–230.
Cambridge University Press, New York.

• Colantone, I. and Stanig, P. (2018). The Trade Origins of Economic Nationalism:Import

Competition and Voting Behavior in Western Europe. American Journal of Political Science,
62(4):936–953

• Margalit, Yotam (2012). “Lost in Globalization: International Economic Integration and the
Sources of Popular Discontent,” International Studies Quarterly, 56 (3): 484-500.

Recommended

• Abou-Chadi, T. and Wagner, M. (2019). The electoral appeal of party strategies in post-
industrial societies: when can the Mainstream Left succeed? Journal of Politics

• Hainmueller, Jens and Michael J. Hiscox. (2006). “Learning to Love Globalization: Educa-
tion and Individual Attitudes toward International Trade,” International Organization, 60:
469-98.

• Hainmueller, J. and Hiscox, M. (2007). Educated Preferences: Explaining Individual Atti-

tudes Toward Immigration in Europe.International Organization, 61(2)

• Hiscox, Michael J. "Through a glass and darkly: Framing effects and individuals’ attitudes
towards international trade." International Organization 60.3 (2006): 755-780.

• Kuhn, Theresa, and Florian Stoeckel. "When European integration becomes costly: the euro
crisis and public support for European economic governance." Journal of European Public
Policy 21.4 (2014): 624-641.

Week 11: International Lending and Capital Mobility

Required

• Stone, Randall W. 2004. The Political Economy of IMF Lending in Africa. American Political
Science Review 98 (4):577-591.

• Nooruddin, Irfan and Joel W. Simmons. 2006. The Politics of Hard Choices: IMF Programs
and Government Spending. International Organization 60 (4):1001- 1033.

• Saiegh, Sebastian M. 2005. Do Countries Have a ‘Democratic Advantage?’ Political Insti-

tutions, Multilateral Agencies and Sovereign Borrowing. Comparative Political Studies 38
(4):366-387

Recommended

• Ahlquist, J. S. (2006). Economic Policy, Institutions, and Capital Flows: Portfolio and Direct
Investment Flows in Developing Countries.International Studies Quarterly,50:681–704

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• Schultz, Kenneth A. and Barry R. Weingast. 2003. The Democratic Advantage: Institutional
Foundations of Financial Power in International Competition. International Organization
57 (1):3-42.

• Zucman, Gabriel. “The Missing Wealth of Nations: Are Europe and the US Net Debtors or
Net Creditors?” The Quarterly Journal of Economics 128, no. 3 (2013): 1321- 1364.

• Przeworski, Adam and James Raymond Vreeland. 2000. The Effect of IMF Programs on
Economic Growth. Journal of Development Economics 62 (2): 385-421.

• Tomz, Michael. 2007. Reputation and International Cooperation: Sovereign Debt across
Three Centuries. Princeton, NJ: Princeton University Press.

Week 12: Research seminar

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