Public Economics

2021/2022

Academic Year

ENG

Instruction in English

6

ECTS credits

Delivered at:

Department of Public Administration

Course type:

Compulsory course

When:

1 year, 1 module

Instructor

Zaostrovtsev, Andrey P.

Course Syllabus

Abstract

The course in Public Economics covers basic issues including a role of government in modern market economies, market failures and public goods, public choice, equity-efficiency trade-offs, taxation principles, public expenditure programmes, fiscal federalism. It combines theoretical models with empirical evidence. Objectives and instruments of public policies are demonstrated with examples of voting and rent-seeking, behavior of bureaucracy, models of taxation design, welfare state problems, including healthcare, pension systems and other social endowments. General principles of cost-benefit analysis are introduced. The course ends with the review of the main features of constitutional political economy, discussion of underlying roots of increasing government size and possible solutions for its reduction

Learning Objectives

• Formation of the knowledge of basic ideas and concepts of public economics
• Acquaintance with the main problems of modern public policy and the ways to solve them
• Formation of the ability to discuss and defend one’s own point of view on public policy issues

Expected Learning Outcomes

• Students are able to classify taxes, to explain and calculate tax incidence and deadweight loss, to formulate the Ramsey rule and determine the problem of optimal taxation.
• Students are able to explain the concepts of the government growth and the role of constitutional constraints on the government.
• Students are able to calculate inequality, explain its consequences and formulate government policy against poverty
• Students are able to compare money and in-kind transfers, to explain targeted entitlements and incentives, to argue the problems of universal basic income, to determine sustainability of intergenerational income transfers and the peculiar properties of the market for health insurance.
• Students are able to evaluate the role and size of the government
• Students are able to explain and assess the properties of majority voting, optimal voting rules, effects of log-rolling and logic of collective action.
• Students are able to explain and evaluate the properties and effects of rent-seeking behavior, corruption and bureaucracy.
• Students are able to explain social welfare functions, adverse selection and moral hazard, to classify the types of social insurance and determine their main problems.
• Students are able to explain the nature and economic effects of externalities and formulate policy with regard to the resulting market failures.
• Students are able to explain the role of tax competition, fiscal federalism and intergovernmental grants and offer appropriate policy measures.
• Students should be able to explain the nature and economic effects of public goods and club goods with regard to the public policies

Course Contents

• Public sector in modern economics
• Public Goods & Club Goods
• Market Corrections: Externalities & Paternalism
• Public Choice: Voting
• Public Choice: Rent-Seeking, Interest Groups and Bureaucracy
• Inequality and Poverty
• Taxation
• Social Justice
• Entitlements
• Fiscal Federalism
• Government’s Growth and Constitutional Political Economy

Assessment Elements

• Test 1
• Test 1
• Test
  See details of the evaluation rules in the attached file "sampleexam1"
• Home task
  Preparation of the report and its presentation at the seminar
• Test 2
  See details of the evaluation in the attached file "Testsample2"
• Test final
  See the details of the evaluation in the attached file "Testfinal"

Interim Assessment

• 2021/2022 1st module
  0.4 * Test + 0.2 * Test 1 + 0.4 * Home task

Bibliography

Recommended Core Bibliography

• Hindriks, J., & Myles, G. D. (2013). Intermediate Public Economics (Vol. Second edition). Cambridge, Massachusetts: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=564828

Recommended Additional Bibliography

• Araral, E. (2013). Routledge Handbook of Public Policy. New York: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=513571
• Goodin, R., Moran, M., & Rein, M. (2015). The Oxford handbook of public policy. Australia, Australia/Oceania: Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.3A27B9A0