Democracy and efficiency: hard relations between politics and economy

Maria Rita Loureiro () and Fernando Luiz Abrucio ()

Brazilian Journal of Political Economy, 2012, vol. 32, issue 4, 615-633

Abstract: Many economists see politics as an irrational activity. They also think state action usually generates market inefficiencies and democratic institutions, such as elections, often work as obstacles to sound economic measures. Showing that vision has been embedded into the main currents of economic thought since the last century, we also argue those ideas are exported to great part of contemporary political science, including the area of public policies. Examining the literature, we show that rational choice political scientists, as the economists, claim governability and effective decisions will be guaranteed mainly through concentrated arenas or through insulated arrangements able to protect policy makers from political interference. In other words, governability depends on the reduction of the political arenas. On the contrary, we reject this technocratic solution of splitting politics from economy. With the support of classical pluralist thinkers, we stand another conception, arguing politics is the privileged social space for building interests and values in an institutionalized way. The difficulties to surpass current international crises since 2008 reveal this is a crucial problem: reducing politics would prevent societies from improving institutional solutions which are the only ones able to give space to emerging conflicts and, then, reach eventual consensus around them. JEL Classification: A1; B0.

Keywords: democracy; economic efficiency; mainstream economics; political science; rational choice theory (search for similar items in EconPapers)
Date: 2012
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