Dr J Costa-I-Font, J316

This is an optional course on MSc European Political Economy, MSc Politics and Government in the European Union, MSc European Studies: Ideas and Identities, MSc European Social Policy, MSc Political Science and Political Economy, MSc Local Economic Development, MSc European Studies, MPA Public and Economic Policy/MPA Public Policy and Management/MPA International Development/MPA European Public and Economic Policy and LSE-Sciences Po Double Degree in European Studies. This course is capped at 15 students.

With the expansion of processes of economic integration in the European Union the traditional economic role of the state requires redefinition. Monolithic states progressively become more flexible structures to respond to constituents demands. This is especially the case of those policy areas that are highly relevant for European citizens such as language, culture and welfare. This course attempts to describe these phenomena and its detailed effects on the institutional structure of states. At the same time, given the European Union institutional structure is moving towards some form of federalism, the course discusses how theories of political and fiscal federalism can help to understand these phenomena. The constitutional design of the European Union brings up a large set of theoretical questions on the institutional design to be addressed from the perspective of constitutional political economy. The course is intended to provide an understanding of the political economy of both fiscal and political decentralisation process with a European perspective. The course examines the economic and fiscal incentives and competitive mechanisms of state integration. Finally, it addresses the effects of economic, social and political heterogeneity in the organisation of European Union member states and well as in the European Union itself. Topics include: Introduction to State and Institutional Design. Political, Economic and Fiscal Integration. Constitutional Political Economy of Europe. Economics of Nationalism. Elite Decision Making. Fiscal Federalism and Europe. Leviathan Paradox and Government Size. Competition, Coordination and Cooperation in a Federation. Vertical and Horizontal Competition National Identity and Public Goods. Economic Incentives for State Formation.. Incentives in State Design: Conflict and Cooperation. Experiences of Political and Fiscal Decentralisation in Europe. Language, Culture and Welfare Polices in the European Union member states.

10 one-hour lectures (LT), 10 one-and-a-half hour seminars (LT) and two revision sessions (ST)

Two essays of up to 1,500 words each

Alberto Alesina with Francesco Giavazzi (2006) The Future of Europe: Reform or Decline, MIT Press; Albert Breton (1996), Competitive Governments. An Economic Theory of Politics and Public Finance, New York: Cambridge University Press); Alberto Alesina with Enrico Spolaore (2003). The Size of Nations, MIT Press, Cambridge, MA.

Two-hour written examination (100%).