THE ECONOMIC ROLE OF THE STATE IN THE NEW POLITICAL ECONOMY
DOI:
https://doi.org/10.12775/EiP.2006.001Abstract
The New Political Economy deals with human behaviour and responsiveness when it comes to the political aspects of public affairs. According to the New Political Economy all modern democratic tendencies create the foreground and make it possible for politicians, bureaucracy and political or social allies to implement particular interests, which, in turn leads to certain limits of economical freedom as well as economical stagnation and decline. The New Political Economy stands against the Government direct intervention, interference and intrusion into economic processes. It also stands for the least minimum influence of the Government deliberately using all the wide ranges of market techniques and methods.
The New Political Economy additionally deals with both: the theory of political cycles and changes, as well as the public choice theory. The theory of political cycles points to the analogy and correspondence of government election cycles with politics of economy.
According to the Public Choice Theory (especially to the constitutional political economy by J. Buchanan) a state keeps and possesses a double function when we consider state economics and assurance, and execution of constitutional rights and maintaining and assuring same time supplying of public goods. The main aim in assuring and protecting constitutional rules is minimising and diminishing the overall losses when it comes to the operativeness and functionality of the state bureaucracy, so in general, the economisation of the public sector. The constitution itself defines: the property rights and their enforcement, public and private limits as well as the rules of supplying public goods.
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