The post-World War Two world has gradually become more and more interconnected until we eventually find ourselves in a truly globalized world where international financial markets are inexorably linked. The bursting of the US housing bubble a decade ago revealed some serious deficiencies in the way the world’s largest economy regulates itself. The fallout from the ensuing financial crash affected economies across the globe and despite seeming like the perfect catalyst for radical political change, there has been surprisingly little progress since then. Nonetheless, the world of politics is closing in on that of economics. Even in countries where corruption is a rare problem, it seems inevitable that the highest echelons of the political elite are intimately acquainted with those of the financial world.
Regulation
The strength of economic regulation varies wildly across the globe. As a general, though not foolproof, rule, more developed nations prefer a greater degree of regulation than developing countries. This is a logical result; the first nations to industrialize did so without any regulation in place, partly due to ignorance of the health hazards arising from industrial activity. London was the birthplace of the industrial revolution and it wasn’t until a deadly smog descended on the city that the first clean air laws were introduced as a measure to protect public health. Nations that are currently seeking to rapidly industrialize, view regulations as a hindrance to their economic development. There is a broad international consensus, codified in the Paris Climate Agreement, that for developing nations to compete with more developed nations on international markets, they will have to behave in a less environmentally friendly way.
International Relations
Last year, the United Kingdom voted to break away from the European Union. In doing so, the country has come face to face with the stark realities of international trade. In order to remain competitive on the international stage, nations must import resources that they cannot produce themselves. Given the prominence of rare minerals, which can only be found in very specific parts of the world, in the manufacturing of modern electronics the countries that have access to these minerals are in a very strong position to negotiate international trade deals. Many liberal, Western nations maintain relations with countries whose internal politics conflict violently with their own out of necessity. Economic considerations have been playing an increasingly prominent role in trade discussions since the end of the Second World War.
Domestic Politics
One of the most noticeable effects of the 2007 financial crash was that a number of Western nations voted for new governments on the basis that their economic prospects had deteriorated. Subsequent studies have shown that voters will react in this way regardless of where actual responsibility for economic problems lie; if those problems even exist that is enough to persuade voters to opt for a change of government. Those who would like to understand the connections between domestic politics and economics better should consider studying an online masters in political science. An online degree in political science provides a good grounding in this, as well as many other aspects of political management.
Politics and economics are strongly linked and both domestic and international political relations affect a nation’s economic outlook.
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