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EC260: The Political Economy of Public Policy

Session: Two
Prerequisites: Introductory microeconomics, basic knowledge of calculus and statistics

Professor Torun Dewan
Dr Valentino Larcinese

Does democracy promote economic growth and welfare? What determines the size and evolution of the welfare state? Is regulation done in the interest of consumers? Is there a feasible third way between markets and governments in the delivering of public services? To answer these and many related questions it is necessary to understand the complex relationships between politics and economics. Governments and political processes define the boundaries of economic relationships and the rules of market interactions. Moreover, governments themselves allocate resources and these allocations reflect complex political bargaining. Understanding the interaction between politics and economics can help us to gain insight into the key questions of public policy making.

This course will examine public-policy making, its characteristics, determinants and consequences in liberal democracies. The course will first provide theoretical foundations from both economics and political science and then examine a number of topics from both theoretical and applied areas of political economy: collective action, electoral competition, fiscal policy and redistribution, bureaucracy, rent-seeking, regulation, information and accountability, constitutional reforms.


K. Shepsle, Analyzing Politics, London: W.W. Norton (2010)

Lectures: 36 hours. Classes: 12 hours
Assessment: One written work and one written examination