Contribution of Political Science to Economics:
Political situations, system and decisions definitely affect the economy.
Contribution of Political Science to Economics can be explained under the following points:
1. Structure of Economy depends on Policies of State:
The structure of economy depends on the form of government and its policies. Control of the state on economic life increases in socialist countries where state has no control on economic life in capitalist countries. Economy gets affected by the policies of the government like tax-system, investment policy, monetary system, import-export, trade, agriculture, etc.
2. Production and distribution of Goods depend on the form of government:
Production and distribution of goods in any country depends on the form of government. In communist countries, government has full control over the means of production and distribution, whereas in capitalist countries, means of production and distribution remain in individual hands. Government has no control over them.
3. Effect of quality of Governance of Economic development:
Economic development of a country is affected by the level of governance of a country. Economic development can be accelerated by effective governance system. If the government is corrupt, then it may create hindrance in economic development.
4. Reason and Solution of Economic Problems depend on the State:
The problems which a state solves are mostly of economic nature. For example: Taxation, unemployment, labor, liberation, etc.
