Democracy over governance

Abstract

Varieties of institutional economics are available to evaluate varieties of capitalism. These methodologies dig behind preferences and technology to arrive at the ground on which agents make choices. The individual is at the foundation of these edifices, neoclassical and otherwise. Consequently, the denouement of all these models is that the market knows best in the absence of effective counterfactuals. A natural corollary is that the task of the government is to set effective mechanisms in place in order to approach the best outcomes. In contrast, we propose a framework which contends with the modern economy as an aggregate that evolves in historical time. Problems like effective demand failures are endemic to capitalist economies. Therefore, systematic State intervention is essential to their functioning. In particular, political economy teaches us that intervention must be in the interest of wage earners. In contrast to the earlier model, the fabric of norms and conventions that facilitate the growth and development of economies must emerge from the consciousness and practices of the working class.Keywords: New Developmentalism. JEL Classification: B52; E02; E12. OVERVIEWMainstream economics has been extended to mainstream political economy by developing elaborate concepts to contend with the malfunctioning of markets. Hitherto, market failures were dealt with by the theory of externalities and public goods. Now, notions like institutions, governance, property rights, and the like are

Urban Governance in Africa Today: Reframing, Experiences, and Lessons

“…Specifically, the essay aims at a) reframing urban governance b) evaluating its aims, processes, and outcomes and c) explaining those outcomes on the basis of which some lessons are teased out. To pursue these aims, the paper uses an institutional political economy approach, the mirror image of the new (mainstream) institutional economics approach on whose paradigm and approach much of the claims about governance are based (Correa and Correa ). The particular currents that define my institutional political economy are original institutionalism (as contrasted with new institutionalism) with its institutional evolutionary character and normative framework of justice; Marxist political economics (the sharpest razor to cut through and expose capitalist exploitative processes that are masked in the labour market), Georgism (with its emphasis on land rent as a major source for social problems) and Polanyian thinking (concerned with the (re)ordering of the state, market, and society as institutions).…”