A78606 Public Economics and Economic History

At the end of the course the student will be able to:

a) understand the role of the government in modern economies;

b) assess the rationale for public intervention in different policy fields;

c) understand the equity and efficiency effects of public intervention and the response of private agents to the governments’ actions;

d) discuss the design of public programmes;

e) understand differences in government intervention across countries.

At the end of the course the student will be able to:

a) understand the role of the government in modern economies;

b) assess the rationale for public intervention in different policy fields;

c) understand the equity and efficiency effects of public intervention and the response of private agents to the governments’ actions;

d) discuss the design of public programmes;

e) understand differences in government intervention across countries.

Public intervention is widespread and largely influence our daily life:

The government provides goods and services (health, social assistance, social insurance, education, defence, environment, infrastructures, etc.),

it defines the rules for socio economic behaviour (legal structure and property rights, environmental regulation and protection of natural resources, safety regulations, employment regulations, etc.)

it ensures a stable socio-economic environment (macroeconomic policies,..)

it finances its activities with taxation and this affects income distribution, and production, consumption and saving decisions.

 The aim of the course is:

To examine the role of the government in modern economies

To provide an understanding of the economic rationale for government intervention,

To discuss the effects of government’s actions in terms of efficiency and equity criteria.

The content of the course has been designed for an international audience, with a focus on government intervention in European countries and the US.

The course is organised into three main modules, each one presenting a different approach to the assessment of the role of governments in the economy: economic, sociological and historical.

MODULE I - PUBLIC ECONOMICS

Prof. Manuela Samek Lodovici

This module of 30 hours provides an introduction to Public Economics, i.e. that branch of economics that studies the role of government in modern market economies. Knowledge of introductory microeconomics (consumer and production theory) is recommended.

The module comprises three parts:

1 - An introduction to welfare economics:

• the economic role of government,
• market failures and the rationale and limits of public intervention according to economic theory,
• efficiency and equity effects of government intervention.

2 - Public expenditures:

• basic theory,
• application to some expenditure programmes: social insurance and social assistance policies, education policies.

3 - Taxation:

• tax incidence
• efficiency effects of taxation (deadweight loss)
• introduction to optimal taxation theory

MODULE II – EUROPEAN WELFARE STATES

Prof. James Wickham

This module of 10 hours examines the relationship between the welfare state and the wider society. We discuss whether what defines Europe as compared to the USA is the importance of the welfare state. 

Does the importance of the welfare state in Europe mean a different relationship between economy and society to that of the USA?

Alternatively, are the differences between European states so large that we cannot simply compare ‘Europe’ and the USA?

And furthermore, do some European forms of welfare state prevent economic growth? Finally, we consider the attempts of the member states of the Union to combine economic growth with social inclusion.

MODULE III- THE DEVELOPMENT OF MODERN MARKET ECONOMIES: AN HISTORICAL

PERSPECTIVE

Prof. Daniele Pozzi

The model will present a long-run perspective on the development of modern capitalism.

Besides, it will underline how market interact with other forms of organization and governance (culture, society, politics). Through the presentation of historical cases, the module will offer to the students a perspective which highlights complexity in the economic phenomena, and which stresses the need for an analysis spreading over multiple variables.

Main topics:

1. Peculiarities of market economy, compared with pre-industrial and not-capitalistic economies.

2. National models of capitalism

3. Market effectiveness and failures regarding human capital development, natural resources exploitation, democratic development

The course will be based on lectures and active students’ involvement. Students are responsible for consulting on a regular basis the website of the course on “my.liuc.it” where updates, additional material and the course slides are posted.

In preparing for lectures students are required to study the required readings and are invited to extend their reading to related papers suggested by the instructor and newspaper articles they may become aware of through their daily reading.

Students are responsible for learning the material before coming to class and for providing a meaningful contribution to the discussion led by the instructor.

Students are also expected to complete simple assignments using EU statistics to report on social expenditures, educational and labour market expenditures and policies in different EU countries. Students might also prepare ppt presentations on selected articles.

MODULE III

The module empathize active participation: to allow it, students are required to prepare the readings BEFORE the corresponding Sessions. The understanding of the readings will be assessed through the participation of the students to class activities (contribution to in-class discussions or answers to short quizzes).

During the module and for assessment propose, the instructor will use Gapminder (http://www.gapminder.org/), a didactic statistic tool. Students are warmly recommended to familiarize with it, even outside the class.

Final evaluation is based on:

- A final written exam (for Modules I and II)

- An optional short review paper (4-5 pages) plus oral presentation on one/two articles (+ 0/2 points on the grade of the written exam) from a list of articles made

available by the instructor (for Module I).

For Module III:

Written test: the test will be composed in two part: multiple-choice exam and 1 open question