To what extent does politics affect economics? This is a relevant question particularly given the state of politics in this country. There's a term called “political economy” that has been popular in recent years. It refers to a field within economics that concerns the interactions between political process and economic variables and policies.

Conventional thinking points to the strong interdependence of politics and economics. To put it more clearly, decisions on who should be our elected officials affect investments, production, employment, prices, wages and other economic factors.

Our political leaders have to make decisions which affect economic factors. They are expected to decide in favor of improving our economic situation such as by creating jobs, enhancing agricultural and industrial production and thereby improving the kind of lives people live.

Our political leaders must therefore be conscious of the interaction of politics and economics all the time.

In terms of projects, it is important that these leaders consider economic costs and benefits. The impact of a project on employment, production and income must be examined prior to deciding to implement it. If the costs far out weigh the benefits then the project should not be implemented.

Those who are able to clearly see the link are often the “best” leaders in terms of improving the quality of life. Those who do not see the link or do not endeavor to strengthen it become ineffective.

If the electoral process works well, these leaders are supposed to be judged by voters on the basis of how they were or will be able to improve the economic situation.