ABSTRACT
Most of economics takes politics for granted. Through some assumptions, it seeks to explain away political structures by characterizing them as stable and predictable, or as inconsequential to understand what goes on in an economy. Governments and other political institutions, far from being unchanging and benign monoliths, are composed of people who respond to incentives and whose behavior and choices can be studied through the lens of economics. Indeed, that added rigor marked the first major transformation for political economy. Between 1900 and 1980, economists from the United States and Europe devised formal ways of expressing economic and political concepts mathematically using calculus and statistics. When Adam Smith, father of modern economics, published The Wealth of Nations in 1776 there was no conceptual distinction between politics and economics. The chapter also presents an overview of the key concepts discussed in this book.
