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Setting the agenda for American political economy

Late in an afternoon this past May, tucked away in an eighth-floor conference room at UC Berkeley, while most academics were celebrating their well-earned summer freedom, an animated band of political science graduate students, junior faculty, and their mentors got to work setting the agenda for American political economy — 60 seconds at a time.

“The gamification of participation in gambling economies,” one participant pitched. “Who are the interests behind this deregulation of online gambling?”

“The policies that actually pass tend to be policies that benefit the rich and have no effect on the poor, or benefit the rich and the poor are at a loss,” another participant observed. “But what are the cases in which policies are passed that benefit the poor and the rich are at a loss?”

“I’ve heard from a lot of different segments of the African American community about cryptocurrency as a kind of panacea to addressing intergenerational wealth inequality,” a third participant offered. “I’m very skeptical of that.”

The scholars, whose research spans diverse topics in political science and economics, were gathered for the 2025 Consortium on American Political Economy, or CAPE, Summer Academy at UC Berkeley. Held each summer since 2019, the program is designed to introduce the consortium’s distinct American political economy (“APE”) framework to advanced graduate students and junior faculty interested in the approach.

It’s also an opportunity for participants to share works-in-progress and get feedback on research designs or proposals.

BESI director Paul Pierson helped found CAPE in 2018 and serves as co-director for the group alongside Yale American Political Economy Exchange’s Jacob Hacker, MIT’s Kathleen Thelen, and Columbia University’s Alexander W. Hertel-Fernandez. In addition to moderating the pitch session, Pierson shared a few kernels of potential research projects of his own.

“Jacob Hacker, Sam Zacher, and I had a paper which described how local economic interests used to ‘stove-pipe’ up in national politics,” Pierson said. “It does not work that way anymore — or if it does, it’s really, really uneven. I’m thinking about what has to hold for local interests to find expression in national politics.”

The pitch cycle continued around the room as the two-dozen or so participants, all facing each other, turned their nameplates on their end, indicating they had a pitch to share. Less “Shark Tank” and more collective jam session, the session served as a wellspring for future research, encouraging iteration from some of the sharpest researchers in the field. Any idea was up for grabs.

The 40-minute-long session ended when all the participants had returned their nameplates to flat. Pierson estimated the group had heard in excess of 50 pitches by the end.

“Part of the purpose of this exercise is to realize, there’s just a lot out there,” Pierson summarized. “And we did this all pretty spontaneously.”

With his name card on end, Alexander Hertel-Fernandez, associate professor of international and public affairs at Columbia University, shares a 60-second pitch during the CAPE 2025 Summer Academy on May 29, 2025, at UC Berkeley. (Photo/Aaron Welch)

Generically, the term “American political economy” could refer to the political economy of America, or the study of that political economy. But as the participants of the conference reiterated during their remarks, American political economy as an academic field has certain substantive commitments.

In a 2022 article for the Annual Review of Political Science, Pierson, Hacker, Thelen, and Hertel-Fernandez describe the key insights, investigations, and animating debates of what they call “the emerging field of American political economy.”

In the introduction to their journal article, Pierson et al. outline their conception of APE:

APE is not defined by its method — indeed, work within this emerging area often combines multiple methods to provide stronger explanations, ranging from statistical analysis of observational data to the exploitation of natural experiments to carefully chosen case studies to in-depth ethnographic research.

Instead, APE is defined by two features that distinguish it from most contemporary scholarship on American politics.
The first is its substantive focus on the interaction of markets and governance — a peripheral concern in much American politics research.

The second defining feature is a theoretical approach that is specifically attuned to what we call meta politics — the processes of institution shaping, agenda setting, and venue shopping that unfold before and alongside the more visible processes of mass politics that figure so centrally in American politics research.

Pierson and his co-authors draw inspiration from comparative political economy (“CPE”), which focuses on how domestic economic and political institutions combine to produce diverse models of political economy. In particular, APE shares with CPE “an appreciation of the extraordinary variety of forms that capitalist democracies have taken,” as Pierson and his co-authors put it.

Some politics is local

United by their commitments to certain theoretical tenets, this summer’s CAPE academy attendees turned their attention to the practice of politics in the U.S. For Sarah F. Anzia, Chancellor’s Professor of Public Policy and Political Science and a BESI affiliated faculty member, the APE approach has been fruitful in reorienting political science research toward a historically neglected topic: the influence of local politics on national economic policy.

In many ways, Anzia’s talk took up the mantle of Pierson’s 60-second pitch — a call to investigate the conditions under which local interests “stovepipe up” rather than the more common gutter-spouting of national politics into the local scene.

Anzia, whose research has long focused on state and local politics, has identified important instances of local issues playing out on the national stage. Among the examples she pointed to was the surprising role state and local government employee pension funds are playing in the growth of private equity. Pension funds manage pools of money on behalf of beneficiaries, typically union members, investing that money to achieve a rate of return to sufficiently cover their obligations.

Pulling from a paper recently published in The Forum entitled “Labor’s Capital,” co-authored with Mark Spindel, chief investment officer of the investment fund manager Potomac River Capital, Anzia spoke about how over the past decade many public-sector pension funds have been steadily increasing the target percentages of their investment in private equity. In their paper, Anzia and Spindel estimate that public pension plans now have close to $1 trillion invested in private equity funds.

“Over the last 20-25 years, the number of publicly listed companies has gone down, and today private equity-owned companies employ a lot of people,” Anzia observed. “This is a tectonic shift in the American economy, and there are reasons to be concerned about some of the implications and consequences of this.”

Private equity funds have garnered plenty of negative public attention nationally for pursuing ruthless tactics such as “asset stripping” the firms it acquires in pursuit of “alpha.” There’s an irony that public-sector unions, which advocate for better working conditions on behalf of their members, are a significant source of capital for private equity when private equity tends to worsen conditions for workers of the firms it acquires.

Anzia and Spindel suggest that public sector pension funds may be incentivized to work with private equity funds, toward whom they are (often openly) hostile, because there’s no better option. Decades of unfunded pension obligations mean that pension funds feel pressure to pursue more aggressive strategies that promise higher returns, which private equity promises. (Of course, it’s unclear whether private equity investments outperform traditional, diversified investments in public corporations.)

“So public-sector unions, they don’t love private equity, right?” Anzia prompted her fellow CAPE participants. “Absolutely not. But when the alternatives are all worse, you hold your nose and do it.”

“This investment of public pension funds is so weird and unlike things that we see in most of the rest of American politics that we study because it doesn’t have that partisan tilt to it,” Anzia continued. “It’s basically a bipartisan thing. If anything, maybe some of the leading states have been the Democratic ones.”

 

CAPE co-founder and BESI director Paul Pierson addresses participants at the CAPE 2025 Summer Academy on May 29, 2025, at UC Berkeley. (Photo/Aaron Welch)

New horizons

Compared to political science broadly, APE is still in its infancy. But its output and its influence have accumulated rapidly, thanks in part to gatherings like CAPE. The setting is an ideal match:  For young scholars, the prospect of helping shape an emerging field is an appealing one. Senior scholars, for their part, get to partake directly in the passage of their intellectual legacy to the next generation of researchers — not to mention, enjoy the intrinsic rewards of mentorship.

“There’s a lot more work on state politics these days,” Anzia happily reported to participants at the end of her talk. “People have been drawn to it for a lot of reasons. One is the large data sets that you can put together. But people are also increasingly interested in the substance of it.”

Addressing the graduate researchers and junior faculty in the room directly, she added, “there is also a lot more work on local politics happening coming from young, early-career, and mid-career people doing more quantitative stuff that looks more like mainstream political science. Even with all of this change, which is good, there’s still rich opportunities in most areas of research on local politics.”

CAPE scholars gather for a group photo on May 30, 2025, at UC Berkeley for Day 3 of the four-day CAPE Summer Academy. (Photo/Aaron Welch)

About the author

Aaron Welch

Communications Specialist, BESI

Aaron Welch is the communications specialist for BESI, where he leads the team’s media outreach and digital communications efforts. His mission is to drive engagement with BESI’s research and other activities and to maximize the dissemination of BESI’s usable knowledge.

In 2025, he led the redesign of BESI’s website to refocus on the initiative’s publications and encourage stronger connections with researchers, policymakers, journalists, and members of the public.

Aaron’s background is in public relations, marketing, and advertising. Prior to BESI, he worked as a public relations account executive, content marketer, and copywriter. His clients have included Fortune 500 companies, local businesses, nonprofit organizations, and public sector entities.

A proud graduate of UC Berkeley (English, ’16), Aaron is a champion of public higher education. He is enthusiastic about translating academic knowledge for mass media, policymaker, grant maker, and public audiences.