Public Economics

Bachelor 2021/2022

Type: Elective course (HSE/NES Programme in Economics)

Area of studies: Economics

Delivered by: Department of Applied Economics

Where: Faculty of Economic Sciences

When: 4 year, 3, 4 module

Mode of studies: offline

Open to: students of all HSE University campuses

Instructors: Leonid Polishchuk

Language: English

ECTS credits: 6

Contact hours: 64

Full 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

Course Syllabus