The Problems of Economic Theory in Explaining Economic Performance

Abstract

The analytical, policy, and ethical issues raised by the contemporary crises of economic performance in the United States and the attendant crisis in economic theory might well serve as a critical catalyst for consummating a marriage of political science and institutional economics. Besides generally compatible modes of reasoning about economy and polity, political scientists and institutionalists share two essential perspectives on the problems of explaining economic performance and prescribing government roles in the economy which suggest a common research agenda: (1) a similar dissatisfaction with the epistemological and ideological characteristics of the mainstream economic debate about the policy and performance failures of the 1970s; and (2) some initial distinctive propositions about the institutional, structural, and political determinants of contemporary economic performance in the United States that can be empirically tested and that may serve as an entry point into the academic and policy debates of the 1980s.