An Agenda Paper

Abstract

Political business cycle models of economic policymaking have been welcomed by both political scientists and economists. They improve on economic approaches by explicitly modeling a political component (the electoral incentive) in the economic policymaking process. And they improve on previous political science work by supplanting the case study-dominated institutional literature with a highly abstract, quantitative method. More than a decade's empirical work on these models has shown that early versions abstracted too radically from the details of political institutions and processes, and various ad hoc reformulations, have sought to improve the theory's explanatory power. This article reviews the political business cycle literature, placing it into the perspective of the trade-off between parsimonious, nomothetic approaches and more detailed, contextualized approaches to policy studies. On the basis of this review, an alternative model of the economic policymaking process is proposed and outlined.