The literature on political economy theory/approach/model/ framework that I went through is confusing, insufficient and not precise, balanced, and updated.
Mark Blyth "Great transformations" or Austerity which is a brand new book in the field of political economy and institutions.
Also, for looking into the concept of governance* Look at William Walters article from 2004 Some notes on the concept of governance i believe it is called!
We are doing a study on decision making in health that accounts for political economy. Our model actually goes back to the original paper by Anthony Downs http://www.hec.unil.ch/ocadot/ECOPOdocs/cadot2.pdf. There is also a book by Downs with the same name.
Other really interesting ideas are in the work of Bruce Bueno de Mesquita, Douglas North and Barry Weingast.
They are confusing because they are written by external observer not people who are specifically trained in the field. Good references are those 70s and prior.
This is a very interesting question. It is also one of my own areas of research. For a very insightful political economy perspective of governance -- with a specific emphasis on education reform -- the 2004 work of Prof. Merille Grindle is a must read:
Grindle, M. (2004). Despite the Odds: The Contentious Politics of Education Reform. New Jersey: Princeton University Press.
Hope this information proves useful.
Another source is
Carroll, Toby. 2010. Delusions of Development: The World Bank and the post-Washington Consensus in Southeast Asia. London: Palgrave-MacMillan.
Thank you all for your valuable information and inputs; its quite helpful.
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