Politics and Governance

This chapter, analyzes the relationship between politics and political institutions and how it affects the economic outcomes. Thus, the relationship between policy decision-making and income distribution explains how structural reforms and political costs have a major impact on policymaking by governments. In order to address the issue more thoroughly, the analysis follows the relationship of democracy and the economic system, the role of elites and pressure groups in policymaking and the interconnection of politics with the cultural background and the role of the media as behavior shaping factors. Finally, the concept of state resilience is described and how it relates to a well-functioning society. Also, the major political upheavals in the world over the last decades are analyzed, with particular reference to the main change in the relative position of the middle class in the world and the rise of populist policies.

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Author information

Authors and Affiliations

1. Department of Economics, National and Kapodistrian University of Athens, Athens, Greece Panagiotis E. Petrakis

1. Panagiotis E. Petrakis