20298 - POLITICAL ECONOMICS - ADVANCED
CLMG - M - IM - MM - AFC - CLAPI - CLEFIN-FINANCE - CLELI - ACME - DES-ESS - EMIT
Course taught in English
Go to class group/s: 31
The goal of this course is to discuss current topics in political economics. This means to study the formation of economic policy from a positive, rather than a normative, perspective. Thus, the course addresses questions such as: what are the political and institutional determinants of fiscal policy and macroeconomic policy in modern democracies? Which features of political institutions are more likely to foster economic development? Why are seemingly inefficient public policies preserved over time, and what can be done to overcome opposition to reform? And -more generally- what is the influence of interest groups on economic policies?
The course trains students to understand how policy decisions are made, and how they can be improved. This proves helpful in the analysis and forecast of policy decisions, by market analysts or by professionals working in government or international organizations.
The course starts with a discussion of how the lack of credibility may impose constraints on monetary and tax policy, and how to design institutions to cope with this problem.
The core part of the course then focuses on political determinants of policy choices in modern democracies. First we ask how electoral competition shapes redistributive programs, such as the European welfare states. Then we discuss the conflict of interest between opportunistic politicians and the general public, asking how it shapes public policy and how this also depends on specific institutions, such as the electoral rule and the degree of centralization. Then we turn to how special and organized interests influence economic policy, also paying attention to institutions governing the budgetary process. Finally, we discuss political influences on intertemporal policies, such as government debt, public investment and structural policies towards economic development.
The final part of the course is devoted to studying the economic consequences of alternative constitutional features, such as the electoral rule, the form of government, the distinction between democracies and non-democracies. This final part also includes a discussion of the institutional and political determinant of economic performance in developing Countries.
- T. PERSSON, G. TABELLINI, Political Economics: Explaining Economic Policy, MIT Press, 2000, Paperback edition
Additional readings are provided at the beginning of the course.