Public Economics

2021/2022

Academic Year

ENG

Instruction in English

6

ECTS credits

Delivered by:

Department of Applied Economics

Type:

Elective course

When:

4 year, 3, 4 module

Instructor

Polishchuk, Leonid

Course Syllabus

Abstract

This course deals with economic role of the government. Variations of government performance across the globe explain why nations prosper or fail, and economics provides valuable insights into such matters. Historically, the government was viewed by economists as an institution in charge of preventing market failures by means of regulation and public expenditures. More recently the focus has expanded to consider the government as a supplier, guardian and enforcer of institutions – “rules of the game” in economy and society. Institutions are outcomes of public choice, and reflect politics, culture, and history – hence modern public economics touches upon and overlaps with political economy, law and economics, social economics and anthropology, etc. This course combines elements of the traditional and modern views of public economics. In accordance with the tradition, it reviews main types and causes of market failures, and includes primers on public goods and taxation. Next, the course proceeds to the agency relations between government and society/private sector under different political regimes, most notably democracy and autocracy, and explores the impact of such regimes for public policy and institutions. How the state should be organized to better serve its economic roles? To answer this question, the course introduces main ideas and tools of constitutional design, which compares different systems of government (mechanisms of accountability, scale and scope, fiscal and regulatory tools etc.) from the point of view of achievable economic outcomes. A part of such analysis is another standard chapter of public economics, i.e. economics of federalism. The government triad includes, in addition to legislative and executive branches, the judicial branch, and hence there is a section in the course covering selected topics from the law and economics. The course also looks inside the government “black box” by studying the incentives of public servants, and explores government pathologies such as rent-seeking, corruption, and patronage. Since the quality of governance is closely related to norms and values in the society, the course deals with the economic role of civic culture, i.e. the collective ability of the society to hold politicians and bureaucrats accountable, and with the social traits required to discipline and/or substitute for the government.

Learning Objectives

• To introduce students to theoretical models for studying the role of the state in the economy

Expected Learning Outcomes

• Able to use the general provisions of microeconomic theory to study the problems of economic activity of the state
• Can analyze the main problems of the public economics
• Understand the tasks of the state in the economy

Course Contents

• Market failures
• Tax theory primer
• Agency problem between government and society
• Government design
• Economics of federalism
• Economic analysis of law
• Government performance and pathologies Incentives in public sector
• Public economics of civil society

Assessment Elements

• Problem sets
• Final test

Interim Assessment

• 2021/2022 4th module

Bibliography

Recommended Core Bibliography

• Anthony B. Atkinson, & Joseph E. Stiglitz. (2015). Lectures on Public Economics Updated edition. Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.pup.pbooks.10493
• Hillman, A. L. (2009). Public Finance and Public Policy : Responsibilities and Limitations of Government (Vol. 2nd ed). Cambridge: Cambridge eText. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=304391

Recommended Additional Bibliography

• Acemoglu, D., & Robinson, J. A. (2012). Why Nations Fail : The Origins of Power, Prosperity and Poverty (Vol. [International version]). New York: Profile Books. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1478395
• Besley, T., & Persson, T. (2011). Pillars of Prosperity : The Political Economics of Development Clusters. Princeton: Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=380271
• Dewatripont, M., Jewitt, I., & Tirole, J. (1999). The Economics of Career Concerns, Part I: Comparing Information Structures. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.EE049710
• Hindriks, J., & Myles, G. D. (2013). Intermediate Public Economics. The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.mtp.titles.0262018691
• James A. Robinson. (2006). Economic Backwardness in Political Perspective. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.11207773

Authors

• POLISCHUK LEONID IOSIFOVICH
• PETROVA NATALYA BORISOVNA
• Антонова Екатерина Сергеевна