Pakistan Institute of Development Economics

THE PAKISTAN DEVELOPMENT REVIEW 

Regional and Domestic Political Economy (The Quaid-i-Azam Lecture)

This lecture should deal with the sub-theme of this session “Domestic and Regional Political Economy”, it propose to focus on an area of economics that is particularly useful in thinking and analysing regional issues. The area is New Economic Geography (NEG). The qualification “new” in the title refers to the method of analysis; not the subject matter, which is old. It’s tough to cover the whole topic so it’s not useful for me to talk about the whole topic so I thought that instead talking about CPEC about which a lot of you in the audience already know so much or heard so much it’s better to maintain a distance or I purpose is to take step back and look at the type of question which are being asked probably from abstract point of view so what I propose to do to is mention the talk in terms of what is called new economic geography. So if you think of it, then all the question we ask in terms of CPEC are in some way related to CPEC economic activity. One purpose and important question is what impact CPEC will have on development of backward regions, which alternative output will be produced, what policy can do in order to encourage the relocation of economic activity from developed to developing region. That’s why I think new political and economic geography is important in providing an answer just to provide a background of new economic geography. Its origin from the person identified in this discipline is Paul Krugman, who won the Nobel Prize in economics in 2008 for developing the discipline ‘New Economic Geography’. The interesting thing is that it reminds me as somebody mentioned two days ago that what economic does is give conclusion which is rather obvious to some extent, economic geography also gives answer which are simple and already known. But the interesting thing is that it uses simple answer and provides simple concept in order to point something a bit more complicated which we haven’t sought about it. So let me just get on to the subject and try to answer the question what can we * learn from new economic geography and how it may be patterned to analyse the question of the impact of CPEC on regional development. On political economy rather to relate to say because it’s a big subject as you know the political economy is the old name of economics but modern day it is not, now defined as part of whole of economics. What is used in different sense by different school of economics, for some it actually refer to political discussion of political factors in economic analysis in comparison of systems such as capitalism and socialism. So that was used to be quite important filed of inquiry until the down fall of berlin war in 1989, since then the subject is slightly uplifted and S. Athar Hussain < > is Director, Asia Research Centre, London School of Economics, London, UK.

S. Athar Hussain

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