Political Economy and Social Welfare with Voting
Procedure
Jamal Nazrul Islam*, Haradhan Kumar Mohajan**, and
Pahlaj Moolio***
Abstract
Mathematical Economics, Social Science and Political
Science are inter-related. In this paper, an attempt has
been made to describe aspects of these subjects by
introducing examples, definitions, mathematical
calculations and discussions. Game Theory is included in
this paper to study mathematical models in economics and
political science especially to study Nash equilibrium.
Success and failure of democracy are interpreted as
different equilibria of a dynamic political game with
cost of changing leadership. Unitary democracy can be
frustrated when voters do not replace corrupt leaders.
Federal democracy cannot be consistently frustrated at
both national and provincial levels. Arrow‟s theorem
indicates that the aggregate of individuals‟ preferences
will not satisfy transitivity, indifference to
irrelevant alternatives and non-dictatorship,
simultaneously to enable one of the individuals becomes
a dictator. In this paper both social welfare functions
and social choice correspondence are considered in
economical environments.
JEL. Classification: 71; 72; 73; 80;
Keywords: Preference Relation; Pure and Mixed Strategies; Nash Equilibrium; Social Choice; unitary and Federal Democracy.
