Subjective Political Economy

Abstract: We extend the Institutional Possibility Frontier (IPF) – a theoretical framework depicting the institutional trade-offs between the dual costs of dictatorship and disorder – by incorporating the notion of subjective costs. The costs of institutional choice are not objectively determined or chosen by a society; rather, they are subjective to the political actor that perceives them. Our methodologically individualist approach provides a new, highly adaptable extension of the IPF enabling examination of the political bargaining process between dispersed actors, the bounds and evolution of institutional innovation and discovery, and follower-leader dynamics in long-run institutional changes. Our new Subjective Institutional Possibility Frontier (SIPF) helps to integrate ideas into the economics of political systems, creating the foundations for a more subjective political economy.

Author(s): Darcy W.E. Allen and Chris Berg

Journal: New Perspectives in Political Economy

Vol: 13 Issue: 1–2 Year: 2017 Pages: 19–40

DOI: 10.62374/rynak011 and in PDF here

Cite: Allen, Darcy W.E. and Chris Berg “Subjective Political Economy.” New Perspectives in Political Economy, vol. 13, no. 1–2, 2017, pp. 19–40.

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