PP410      Half Unit
Public Economics for Public Policy

This information is for the 2025/26 session.

Course Convenor

Prof Johannes Spinnewijn

Availability

This course is available on the Double Master of Public Administration (LSE-Columbia), Double Master of Public Administration (LSE-Sciences Po), Double Master of Public Administration (LSE-University of Toronto), MPA Dual Degree (LSE and Hertie), MPA Dual Degree (LSE and NUS), MPA Dual Degree (LSE and Tokyo), MPA in Data Science for Public Policy, Master of Public Administration and Master of Public Policy. This course is available with permission as an outside option to students on other programmes where regulations permit. This course uses controlled access as part of the course selection process.

Priority given to School of Public Policy students. MPP students and students from outside of the School of Public Policy should submit a statement in support of their request. Previous economics and econometrics are required for all students (please give details in your statement).

 

Deadline for application: 9am on the Monday of Autumn Term week 1 (including requests from School of Public Policy students). We aim to inform students of the outcome of their request by 12noon the following day, Tuesday of Autumn Term week 1.


For queries contact: mpp@lse.ac.uk

Requisites

Additional requisites:

MPA Dual Degree students spending Year 2 at LSE will require permission from the course lecturer to attend the course.

Course content

This is a course in theoretical and applied public economics using intermediate economic theory. Topics include: issues of equity and efficiency; models of public goods and externalities, including environmental policy; income inequality, poverty alleviation and the role of welfare programmes in theory and in practice; social insurance and social security; health and education policy; the effects of taxes and transfers on labour supply and government budgets; optimal taxation, tax evasion, and taxation in developing countries; and current topics in public finance. The main institutional references will be to the UK and the US, but some attention will also be given to broader international experience.

Teaching

10 hours of seminars and 20 hours of lectures in the Autumn Term.

Formative assessment

Students will complete and be given feedback on two sets of practice questions, which are similar in style and format to the final examination.  Students will also be given feedback on a draft introduction and outline of their policy essay.

 

Indicative reading

  • J Gruber (2011) Public Finance and Public Policy, 3rd edition, Worth Publishers. [CC HJ141 G88] [or Gruber (2007), 2nd edition].
  • N Barr (2012), The Economics of the Welfare State, 5th ed., OUP [CC HB99.3 B26].  Institute for Fiscal Studies (2010-2011), Mirrlees Review: Reforming the Tax System for the 21st Century, Volume 1 (2010): Dimensions of Tax Design, Volume 2 (2011): Tax by Design. Oxford University Press, Oxford. Available online at: http://www.ifs.org.uk/mirrleesReview
  • On developments in public spending in the UK, see H Glennerster (2003), Understanding the finance of welfare (Policy Press); or H Glennerster and J Hills (eds) (1998), The State of Welfare: The economics of social spending (Oxford) [CC HV245 S79].
  • Students wishing to review their microeconomic theory should consult a textbook on intermediate microeconomic theory, such as Morgan, Katz and Rosen (2006) Microeconomics, McGraw Hill (CC HB172 M84) or J Perloff (2008) Microeconomics: Theory & applications with calculus, Pearson (CC HB172 P45).
  • On the structure of taxation in the UK, see IFS (2011) A Survey of the UK Tax System, Briefing Note no. 9 (http://www.ifs.org.uk/bns/bn09.pdf) and the HM Revenue and Customs website, (http://www.hmrc.gov.uk).  The Institute for Fiscal Studies is an independent policy research institute and its website (http://www.ifs.org.uk) has a wide range of useful publications. The HMRC website includes information on the tax structure and statistics on tax payments (by income group, by type of tax, etc.) and overall revenues raised.
  • The UK Treasury website (http://www.hm-treasury.gov.uk/) provides a range of documents on economic policies and the public finances, including the annual publication, Financial Statement and Budget Report (the ‘Red Book’), published each year on Budget Day.
  • For comparative international fiscal data, information and analysis, useful sources include the International Monetary Fund, IMF (http://www.imf.org/), the World Bank (http://www.worldbank.org/) and the Organisation for Economic Cooperation and Development, OECD  (http://www.oecd.org).

Assessment

Exam (60%), duration: 180 Minutes, reading time: 15 minutes in the January exam period

Essay (40%, 2000 words)

The essay, of up to 2,000 words, will be on a policy question related to the course material.


Key facts

Department: School of Public Policy

Course Study Period: Autumn Term

Unit value: Half unit

FHEQ Level: Level 7

CEFR Level: Null

Total students 2024/25: 32

Average class size 2024/25: 11

Controlled access 2024/25: No
Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Self-management
  • Team working
  • Problem solving
  • Communication
  • Application of numeracy skills