Before answering where the political economy of the welfare state may be going in the near future, we should first explain what we mean by that powerful but elusive term – “political economy.” Political economy can encompass a maddeningly wide range of studies. In a book aptly titled What Is Political Economy? Martin Staniland asks what it means to title a work “The political economy of … “ (1985, p. 1). He concludes that ”there is no such thing as ‘the theory of political economy,’ and there never will be, in the sense of a single universally accepted complex of assumptions and methodology” (p. 198). He goes on to say that the use of the term “refers to a continuing intellectual enterprise, a particular agenda, a specific object of theoretical ambition” (p. 198). These diverse ways of viewing political economy range from classical and neoclassical economics through Marxist analysis, sociological studies of economic processes in institutional context, and political science analyses of “politico-economic interactions” (Frey 1979; Caporaso and Levine 1992). We will briefly review each approach and place this volume within the overall context of political economy.

The editorial board of the Library of Political Economy at Oxford University Press lists a somewhat earlier definition from economics: