Political economy and welfare analysis
Political economy and welfare analysis
Per i Corsi di laurea:
- EPS n.o. - (immatricolati fino al 2013/2014) ; moduli/unità didattiche: Unità didattica 1 , Unità didattica 2 , Unità didattica
3 totale cfu 9
Periodo di erogazione 3° trimestre
Prof. FACCHINI GIOVANNI , DIPARTIMENTO DI ECONOMIA, MANAGEMENT E METODI QUANTITATIVI
Indirizzo:
02503 21048 - v. Conservatorio, 7
Mail:
[email protected]
Prof. FLORIO MASSIMO , DIPARTIMENTO DI ECONOMIA, MANAGEMENT E METODI QUANTITATIVI
Indirizzo:
02503 12882 - v. Festa del Perdono, 7 02503 21510 - v. Conservatorio, 7
Mail:
[email protected]
L'Insegnamento sviluppa crediti sui seguenti settori scientifico disciplinari
Unità didattica 1
Unità didattica 2
Unità didattica 3
9
3
3
3
cfu SECS-P/03 (9 cfu)
cfu SECS-P/03 (3 cfu)
cfu SECS-P/03 (3 cfu)
cfu SECS-P/03 (3 cfu)
Obiettivi
The course will provide a thorough understanding of the working of public decision makers.
Short Course Description
Critical discussion of the Two Fundamental Theorems; Second best economies and CBA analysis; Shadow prices in a Drèze-Stern
framework; Analysis of key CBA parameters (theory and applications); Role of risk, uncertainty and information asymmetries in CBA
Prerequisiti e modalità d'esame , con riferimento ai descrittori 1 e 2
written with open questions
Lingua di insegnamento
English
Pagine web
http://mfloriowe.ariel.ctu.unimi.it/v1/home/Default.aspx
Modulo/Unità didattica: Unità didattica 1
Programma
Module1 presents selected topics in welfare economics theory and applications, focussing on social cost benefit analysis (CBA)
in a general equilibrium framework. After a critical discussion of the axiomatic structure of an Arrow-Debreu economy, the Two
Fundamental Theorems are reconsidered. The focus is on interpretation of Walrasian equilibrium, of Paretian optimum, and of
shadow prices as solutions of a constrained optimization program. Moving to second best economies, CBA theory is introduced
as a comprehensive approach to the evaluation of changes of the world. Shadow prices in a Drèze-Stern framework are defined,
with examples of key CBA parameters such as: the social discount rate, the shadow wage under different unemployment regimes,
social welfare weights and regional policy, the shadow price of the statistical life in health projects and of time savings in transport,
the evaluation of privatization and regulatory reforms, social accounting of environmental impacts. After a discussion of risk and
uncertainty, a discussion of planning and evaluation under information asymmetries in a multi-government setting will link CBA and
incentive theory.
Materiale di riferimento
Florio M. (ed), 2007, “Cost Benefit Analysis and Incentives in Evaluation: The Structural funds of the European Union” (chapters
downloadable through Repec).
Florio, M. (2014) "Applied Welfare Economics: Cost-Benefit Analysis of Projects and Policies", London: Routledge.
Layard R., Glaister S., 1994, “Cost Benefit Analysis”, Second Edition, Chapter 1 (Shadow Prices: Policy reform, shadow prices and
market proces, Drèze J., Stern N.), pp. 59-100.
For further reading:
Drèze J., Stern N., 1987, The theory of cost-benefit analysis, in Auerbach A., Feldstein M. (eds), Handbook of public economics, Vol
II,
pp. 909-989, Elsevier, North Holland.
Other readings may be suggested during the course (only for attendat students).
Modulo/Unità didattica: Unità didattica 2
Programma
Module 2 and Module 3 of the course will focus on the modelling of voters and politicians’ behaviours addressing the incentives and
constraints faced by politicians when choosing economic policies. The role played by different institutional arrangement on electoral
accountability and public decision making will also be analysed.
Module 2 will start by analyzing basic models of the collective decision making process, including the median voter and of the
probabilistic voting model. We will then study political agency, and models of partisan politics. We will turn then to models of special
interest politics, considering some applications both in public finance and in international relations.
Materiale di riferimento
Besley, Timothy Principled Agents? The political economy of good government Oxford University Press, 2007
Drazen, Allan Political Economy in Macroeconomics Princeton University Press 2000
Persson, Torsten and Guido Tabellini Political Economics: Explaining economic policy MIT Press, 2002
Shepsle, Kenneth and Mark Bonchek Analyzing politics: rationality, behaviour and institutions, Norton 1997
Additional readings will be suggested during the course
Modulo/Unità didattica: Unità didattica 3
Programma
Module 2 and Module 3 of the course will focus on the modelling of voters and politicians’ behaviours addressing the incentives and
constraints faced by politicians when choosing economic policies. The role played by different institutional arrangement on electoral
accountability and public decision making will also be analysed.
Module 3 will study comparative policy making, looking at the role of institutions on public decision making. Particular attention will
be dedicated to the analysis of the economic effects of constitutions and the role of the separation of powers in shaping
accountability. We will conclude comparing presidential and parliamentary regimes.
Materiale di riferimento
Besley, Timothy Principled Agents? The political economy of good government Oxford University Press, 2007
Drazen, Allan Political Economy in Macroeconomics Princeton University Press 2000
Persson, Torsten and Guido Tabellini Political Economics: Explaining economic policy MIT Press, 2002
Shepsle, Kenneth and Mark Bonchek Analyzing politics: rationality, behaviour and institutions, Norton 1997
Additional readings will be suggested during the course