The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Politics and Economics

  • V. K. Borooah
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1346

Abstract

No great powers of persuasion are required to establish the connection between politics and economics. In democracies it is ‘obvious’ that, to quote Harold Wilson, former Prime Minister of Great Britain, ‘the standing of a Government and its ability to hold the confidence of the electorate of a General Election depends upon the success of its economic policy’. Given this dependence of political popularity on economic performance it is equally ‘obvious’ that a Government will try to manipulate its economic policy in such a way as to produce the most favourable outcomes just before election day, leaving the less favourable outcomes to occur at other times. Such behaviour on the part of governments is described in the literature as generating a ‘political business cycle’.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • V. K. Borooah
    • 1
  1. 1.