2019/2020

2019/2020

DM270

SECS-P/01 (POLITICAL ECONOMY)

DEPARTMENT OF POLITICAL AND SOCIAL SCIENCES

PERCORSO COMUNE

1°

1st semester (30/09/2019 - 16/12/2019)

6

40 lesson hours

English

ORAL TEST

PUGLISI RICCARDO (titolare) - 6 ECTS

Knowledge
• to understand how formal models can help explain the behavior of representative political institutions;
• to connect the individual level behavior of economic and political actors to macro-level outcomes.
Skills
• to understand the interactions between economic and political variables, and the role played by rational voting
• to analyze the political determinants of economic policies, with a specific focus on the welfare state (monetary and in-kind redistribution) and the provision of public goods
• to incorporate in the analysis of the political processes the influence interest groups can exert.

Competences
• to gain the ability to independently analyze the economic and political aspects of specific policies and institutions, as emerging from current events involving developed and developing countries
• to understand the political and economic landscape as an interconnected system, which provides incentives, constraints and opportunities to citizens/voters, companies and NGOs.

1. [if needed] A short introduction to the main tools of economics


2. Introduction to political economy

I will present the political economy approach, which is based on the idea of jointly investigating the behavior of individuals as economic and political actors.

3. Median voter theorem

The median voter theorem is the workhorse of political economy models.

4. Other voting models

When the assumptions underpinning the median voter theore0m do not hold, other models such as the probabilistic voting, the citizen-candidate model and the agenda-setting models are able to offer testable predictions about politico-economic outcomes.


5. Fiscal federalism and lobbying

We will look at various collective decisions rules in a federation, which are aimed at allocating public spending at the local level. Within this simple model we will also introduce a lobby, in order to analyze its effects on the final outcome.

6. Intragenerational redistribution

We will make use of the median voter theorem to investigate intragenerational redistribution, which takes place through an income tax that is financing a fixed subsidy given to all citizens. Under a balanced budget rule, citizens vote on the optimal tax rate.

7. The welfare state

We will look at data on the welfare state in developed countries. We will think about the rationale of government intervention in those areas.

The course is based upon standard lectures: the discussion with students about current political and economic developments is welcome, with the purpose of connecting those events with the models we will analyze during the course itself.

The course is based on the slides shown during the lectures. A handout is also available, i.e. V. Galasso, “The Political Economics of Redistributive Policies”

There will be a written exam, which contains broad questions about the covered topics: typically, students will be requested to lay out the models we will discuss during lectures.