Political economics

Introduction to political economics, Spring 2015, University of Helsinki

Notes:

    • (17/02/2015): No Wednesday 18th we will finish lecture note 4 and start discussing the problem set.

    • (17/02/2015): On Monday we talked about common pool problems and municipal mergers. Discussion was based on a paper by Tuukka Saarimaa and Janne Tukiainen. My slides.

    • (10/02/2015): Lecture note 4 is now available online. We will discuss the note tomorrow and next Monday.

  • (10/02/2015): Because of the macro exam, there will be no class on Wednesday 25th February.

    • (02/02/2015): I have to cancel today's class. Sorry about the short notice.

    • (01/02/2015): There will be no class on Wednesday 4th February.

    • (28/01/2015): Can electoral fraud change election outcomes? Evidence from a field experiment by Ruben Enikolopov and co-authors.

    • (28/01/2015): Do voters reward incumbent governments when times are good? Check out the el Gordo example by Manuel Bagues and Berta Esteve-Volart in Politicians' luck of the draw

    • (27/01/2015): Lecture note 3 has been added to required reading.

    • (21/01/2015): A set of problems is now available in the required reading section. The problems will be discussed in class Mon 23rd February.

    • (21/01/2015): The grade of the course is based on the exam only.

    • (13/01/2015): A detour to welfare economics

    • (12/01/2015): Next lecture will be about welfare economics. Notes will be posted here Tuesday.

General:

The lectures are mostly based on lecture notes which will posted here before the lectures. The lecture notes present different basic frameworks for the analysis. The notes are not intended as self-explanatory. Instead, the aim is that they will make lectures easier to follow.

In addition to the material in the lecture notes, we will discuss applications of the basic theory and empirical work with the help journal articles.

Lectures:

Lectures take place twice a week starting Monday 12 January

Mondays at 10-12, Economicum, sh 3-4

Wednesdays at 10-12, Economicum, sh 3-4

Exams:

Final exam: March 9, 2015 at 10-12, Porthania, PIII

2nd exam: April 8th, 2015 at 10-12, Economicum, lecture room

Note: participating in one of these exams is the only way to pass this course.

Required reading:

  1. Lecture notes (to be complemented by own notes)

    • Lecture note 1

    • Lecture note 2

    • Lecture note 3

    • Lecture note 4

  2. Tim Besley (2004): The new political economy

  3. Eric Maskin (2009): The Arrow Impossibility Theorem: where do go from here?

  4. Institute for Fiscal Studies (2012): The Mirrlees Review: Tax by design

  5. Problem set

Additional material:

General interest politics and preferences for redistribution:

Meltzer, A. and S. Richards (1981): A rational theory of the size of government, Journal of Political Economy 89(5), 914-927.

Alesina, A. and G.-M. Angeletos (2005): Fairness and Redistribution, American Economic Review 95(4), 960-980.

Parties and tactical redistribution to swing voters:

Dahlberg, M. and E Johansson (2002): On the vote purchasing behavior of incumbent governments, The American Political Science Review 96(1), 27-40.

Dixit, A. and J. Londregan (1996): The determinants of success of special interests in redistributive politics, The Journal of Politics 58, 1132-1155.

Lindbeck, A. and J. W. Weibull (1987): Balanced-budget redistribution as the outcome of political competition, Public Choice 52, 273-97.

Here's one list of some interesting contributions to this literature:

Austen-Smith, D. and J.S. Banks (1999): Positive Political Theory I: Collective preference. Michigan Studies in political analysis, University of Michigan Press.

Besley, T. (2006): Principled agents? The political economy of good government, Oxford University Press.

Buchanan, J. M. and G. Tullock (1962): The Calculus of Consent: Logical Foundation of Constitutional Democracy, University of Michigan Press.

Downs, A. (1957): An economic theory of democracy, Harper and Bros.

Olson, M. (1965): The logic of collective action: Public goods and the theory of groups, Harvard University Press.

There are some very good text book presentations of the material to be covered during class and most public economics text books devote at least some chapters for political economics, for instance:

Drazen, A. (2000): Political Economy in Macroeconomics, Princeton University Press.

Persson, T. and G. Tabellini (2000): Political economics. Explaining economic policy. MIT Press.

Myles, G.D. and J. Hindriks (2006): Intermediate Public Economics, MIT Press.