Economic Notes on the Concept of Political Power

Abstract

ABSTRACT These notes offer an unusual perspective on democracy by interpreting key categories of political science through the lens of economics, specifically drawing from the ‘theory of the firm’ literature. Due to incomplete contracts, political power is conceptualized as a variable quantum that balances power resources with constitutional and electoral constraints. Accordingly, the proposed model is used to explain how the amount of power can vary over time, what its determinants are, and what mechanisms can lead to political regime change in an era of world polarized by democracies and autocracies.