Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: Politics and economics are inextricably linked. Government establishes and enforces the rules of the game for the economy, thereby determining not only how much wealth is created, but also how wealth is distributed across society. The primary question of political economy is easily stated: for whose benefit does government set the rules? This paper examines the fundamental conflict of interest between maximizing the wealth of a nation, versus maximizing the wealth of particular interests. The same distortions and deceptions have been used for centuries to obscure how government sets the rules of the game to benefit particular interests.

Keywords: political economy; rules of the game

JEL-codes: A10; B20; B20; K00; P00

45 pages, December 6, 2010

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