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The Relationship Between Politics and Economic Policy

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  Economic policy and politics are inextricably linked.  Political choices made by governments, legislatures, and elected officials directly influence the economic direction of a nation.  Conversely, economic concerns often underlie political agendas, determine the outcome of elections, and influence the distribution of power among competing political forces.  The dependent relationship is the secret to how states manage their activities and interact with the world economy today. Economic policy anything from taxation and government spending to trade policy and labor law is a tool through which governments attempt to guide economic performance.  These policies do not, however, exist in a vacuum they are shaped by political ideology, institutional design, interest groups, and public opinion.  Understanding the dynamic between politics and economic policy is critical to an understanding of why countries grow, stabilize, or succumb to crisis. Political Ideolog...