Navigating Economic Dilemmas: The Role of Trade-Offs in Policy and Theory

Abstract

This article explores the concept of trade-offs in economics, emphasizing their centrality in both theoretical frameworks and practical policymaking. Trade-offs emerge from scarcity and necessitate prioritizing certain economic objectives over others. Drawing from classical, neoclassical, and heterodox theories, the paper investigates trade-offs in three key domains: equity versus efficiency, growth versus sustainability, and short-term versus long-term goals. Using qualitative methods and document analysis, this study synthesizes insights from books, peer-reviewed journals, and institutional reports published. The findings reveal that economic trade-offs are not merely technical choices but are embedded in ethical, institutional, and political contexts. Explicit recognition of trade-offs enhances transparency, informs policy coherence, and supports participatory governance. The study proposes a conceptual framework that integrates opportunity cost, institutional dynamics, and stakeholder engagement in evaluating economic choices. The research contributes to economic theory by refining the conceptualization of trade-offs and provides practical implications for improving decision-making in public policy and development planning.