Making of Economic Policy: A Transaction-Cost Politics Perspective (Revised)

"This work is a tour de force of the kind we have come to expect from Avinash Dixit. Using the basic ideas of transactions cost theory, he simultaneously analyzes much of current literature and provides his own insights in to the theory of economic policy formulation. The work is sure to be a standard reference in the burgeoning field of political economy."
-- Anne O. Krueger, Professor of Economics, Stanford University.

The Making of Economic Policy begins by observing that most countries' trade policies are so blatantly contrary to all the prescriptions of the economist that there is no way to understand this discrepancy except by delving into the politics. The same is true for many other dimensions of economic policy.