30480 - TOPICS IN POLITICS I
Course taught in English
Go to class group/s: 31
No specific background knowledge is required. A curiosity on how governments, political decision making and public finance work, and an open mind to alternative views on the role of macroeconomics in policy making and on the role of central banks in the economy would be helpful.
Radical government: How to save the welfare State. Over the last two centuries the State has evolved from a mere guarantor of law, order and security to the primary provider of welfare. The unprecedented “non linear” progress of human well being over the same time period is inexorably tied to the development of the welfare state. It would not have been possible without it. However, in the face of ageing population, maintaining the welfare state as we know it implies a growing absorption of public resources. They have reached over 30% of GDP in some countries. More worryingly, notwithstanding the growing resource allocation, inequality in the advanced world has been steadily growing over the last decade. Is the welfare state financially sustainable? The course argues that without radical policy changes and an upgrade in managerial skills it is not. The mission of the course is to substantiate that assertion, and examine potential solutions to this critical social, and economic problem that underlies some of the most important political evolutions of recent years. It argues that none of the traditional solutions provide a definitive answer and suggest a different approach covering both the “What” as well as the “How”.
The course focuses on the development and the sustainability of the welfare state. It is organized in 4 main modules:
- Historic evolution of the welfare state
- The future sustainability of the welfare state
- The traditional solution for reforming the welfare state
- A new approach
The main topics of the course are:
- Historic perspective on the evolution of the welfare state
- Relationship between the welfare state and the economic development of the last 2 centuries
- Market mechanisms versus public financing: pros and cons
- The evolution of inequality and the impact of the welfare policies
- Forecasting the cost dynamics of the welfare state
- Classical welfare reforms
- Elements of the new approach:
- Spending review for radical restructuring.
- Partial monetization of pension liabilities.
- Effective governance models.
- Effective policy making: how to overcome the biases of macroeconomics.
- Dealing with the citizen/voter paradox: citizens want change but voters don’t want to pay.
- Dealing with bureaucracy “law of gravity”.
- Understand the development of the welfare state and discuss its relationship to economic development,
- Understand the economics of the welfare state,
- Explain the pros and cons of public financing versus market mechanisms for welfare services,
- Explain the various models of welfare reform with their relative pros and cons.
- Understand the mechanism of government policy making.
- Identify key efficiency levers and reforms for governments.
- Understand and discuss making change happen in public administration contexts.
- Build a forecasting model for welfare costs.
- Design a change program for a public administration.
- Structure the analytic and thinking process for public policy making.
- Face-to-face lectures
|Continuous assessment||Partial exams||General exam|
All students have the option of choosing one of three alternatives:
- A written final exam based on open ended questions
- A group assignment: specific country case study (in class oral presentation)
- A group assignment: specific country case study (written paper)
The country case studies are expected to have the following structure:
- Past diagnostic: performance of the country in terms of welfare spending and impact on key social and economic measures including inequality.
- A critical analysis of the current forward looking forecasts.
The only highly recommended text is:
- The 2018 Ageing Report: Economic and Budgetary Projections for the EU Member States (2016-2070), Economic and Financial Affairs, European Commission (available free on line).
Other useful readings:
- A. ATKINSON, Inequality: What Can BE Done? Harvard University, 2015.
- N. BARR, Economics of the Welfare State,Oxford University Press, 2012, 5th edition.
- N. BARR, P. DIAMOND, Pension Reform, A short guide, Oxford University Press, 2010,
- H. GLENNERSTER, Understanding the Finance of Welafre, The Policy Press and the Social Policy Association, 2009
- J. STIGLIZ, The Great Divide: Unequal Societies and What We Can Do About Them, W.W Norton & Co., 2015.