What is Political Economy? Different types of Economic Systems and its influence on planning process Capitalism and Capitalist Planning Model Communism and Communist Planning Model Socialism and Socialist Planning Model

1. POLITICAL ECONMOY

2. Contents
1. What is Political Economy?
2. Different types of Economic Systems and its influence on planning
process
• Capitalism and Capitalist Planning Model
• Communism and Communist Planning Model
• Socialism and Socialist Planning Model

3. What is Political Economy?
• Political economy is the study of production and trade and their
relations with law, custom and government; and with the
distribution of national income and wealth.
• The term political economy is derived from the Greek word polis,
meaning “city” or “state,” and oikonomos, meaning “one who
manages a household or estate.”
• Political economy thus can be understood as the study of how a
country—the public’s household—is managed or governed, taking
into account both political and economic factors.

4. What is Political Economy? Study how Economic theory and methods
influence political ideology
INTERRACTIONS
Every Country has three Primary Institutions – Economic Centres, Judiciary and Administrative Governments

5. What is Political Economy? Study how Economic theory and methods
influence political ideology
INTERRACTIONS
CAPITALISM
COMMUNISM
SOCIALISM These economic models develop social and economic systems

6. What is Political Economy? Study how Economic theory and methods
influence political ideology
INTERRACTIONS
CAPITALISM
COMMUNISM
SOCIALISM
Political Economy analyses
how Public Policies are
created and implemented

7. What is Political Economy?
INTERRACTIONS
Political Ideologies
usually dictates the
economy
With Power
Shifts from
one party
to another,
the
economy
also
changes
Political Economy also involves Gain Theory, since many groups are competing for finite resources and power, it is
important for them to determine the course of action that will yield the best results and the probability of reaching those
results.

8. Different Types of Economic Systems and its Influence on Planning
Process
• Political Economy is governed by the type of political party in power
and the country’s primary economic system. The main economic
systems are further discussed.
 Capitalism and Capitalist Planning Model
 Communism and Communist Planning Model
 Socialism and Socialist Planning Model

9. Capitalism and Capitalist Planning Model
• Capitalism is an economic system in which the means of
production and distribution are privately or corporately owned.
Operations are funded by profits, and not controlled by a state
government.
• The term "capitalism" (originating from
the Latin word "capitalis," which
literally means "head of cattle")
• Countries that have Capitalist Economy
 United States of America
 United Kingdom
 Canada
 Germany
Capitalism

10. Capitalism and Capitalist Planning Model
• In a capitalist system, the government does not prohibit private property or
prevent individuals from working where they please.
• Under some versions of capitalism, the government carries out a number
of economic functions, such as issuing money, supervising public utilities
and enforcing private contracts.
• The Government acts as a purely regulatory authority.
• The planning processes are mostly influenced by the demands of the
private sector based on pure profit incremental views.
• The Capitalist Approach is more inclined towards total economic growth
and very less considerations are made for the welfare of all the people as a
whole community.
Planning Model

11. Capitalism and Capitalist Planning Model
Critics
The rich gets richer while the poor gets poorer with the private sector controlling the resource allocation and mobilization

12. Communism and Communist Planning Model
• A system of social organization in which all economic and social activity
is controlled by a totalitarian state dominated by a
single and self-perpetuating political
party.
• Countries that have Communist Economy-
 China
 Cuba
 Laos
Communism

13. Communism and Communist Planning Model
• In a communist society, the working class owns everything, and everyone
works toward the same communal goal.
• There are no wealthy or poor people -all are equal, and the community
distributes what it produces based only on need. Nothing is obtained by
working more than what is required. It’s an ideology of economic equality
through the elimination of private property.
• Central planning is difficult to achieve. Top-down approach.
• People’s needs are not taken into consideration.
• The Communist Approach is more inclined towards total economic growth
and very less considerations are made for the welfare of all the people as a
whole community.
• Communism frequently results in low production, mass poverty and limited
advancement.
Planning Model

14. Communism and Communist Planning Model
Critics

15. Socialism and Socialist Planning Model
• It is a political and economic theory of social organization which
advocates that the means of production, distribution, and exchange
should be owned or regulated by the community as a whole.
• Countries that have Socialist Economy-
 Russia
 North Korea
 Mozambique
 Bangladesh
 Tanzania
Socialism

16. Socialism and Socialist Planning Model
• Socialism’s focus is on equality. But workers earn wages and they can spend
as they choose, while the government, not citizens, owns and operates the
means for production.
• Workers receive what they need to produce and survive, but there’s no
incentive to achieve more, leaving little motivation. Some countries have
adopted aspects of Socialism.
• The United Kingdom provides basic needs like healthcare to everyone
regardless of their time or effort at work.
• In the U.S., welfare and the public education system are a form of
socialism .
• The Socialist Approach is more inclined towards welfare of all the people as
a whole community.
Planning Model

17. Socialism and Socialist Planning Model
Critics

18. Conclusion
• Political Economy studies the interaction between economic, judiciary
and administrative institutions.
• Political Economy is governed by the type of political party in power
and the country’s primary economic system.
• The Planning Process depends upon the type of economic system a
country adopts.

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