This article introduces and explores the concept of political economy. In particular it focuses upon the political economy of health while also considering the implications for international nursing studies in the context of health care more generally. Political economy is not only about budgets, resources and policy. It is also about particular kinds of political power that can be difficult to grasp. Often, analyses of power in the nursing literature relate to power at the interpersonal level between say nurses and patients, the interprofessional level between nurses and medics, or at the institutional level between managerial policy and actual practice that often, if not always, relates also to national issues in health care. While acknowledging the value of these analyses, this article seeks to add the dimension of the power of political economy of health at both the national and global level. No political economy is without its underlying political philosophy or ideology which defines the means-end rationality of both desired outcomes and financial pragmatism. This is particularly the case in services such as education and health, in which the differences between various ideological approaches can often be quite remarkable, and not without impact on actual services. The purpose of this article therefore is to firmly place the concept and practice of political economy into international nursing studies by giving examples of its changing nature, its various manifestations and the challenges they present. (Contains 4 notes.)