17537 - Economic Analysis of Public Policies

Learning outcomes

Economic analysis is widely used in various public policy fields such as environmental policy, industrial organization, social welfare, and labour market. Economic principles of consumer and producer theory, social welfare economics, public goods and externality, market failure, market structure, imperfect information, business cycle, monetary and fiscal policy, and economic growth offer many insights into understanding of economics in deriving solutions to the issues of public policy. These economic principles and some quantitative methods will be studied in detail to understand the application of economic theories and quantitative models to public policy analysis. The course will provide students with the concepts and tools of economics to analyse the role of government intervention, its justification, and implications for efficiency and fairness, using specific policy areas as examples.

Course contents

Part One: Introduction to Economic Analysis of Public Policies: The Public Sector in a Mixed Economy. (Stiglitz Vol 1, chapter. 1; BCS, ch.1).

Part Two: Fundamentals of Welfare Economics: Market Efficiency; Market Failures; Efficiency and Equity. (Stiglitz Vol.1, chapters. 2, 4)

Part Three: Public Expenditure Theory: Public Goods and Publicly Provided Private Goods (Stiglitz Vol.1, chapter. 5); Public Choice; Public Production and Bureaucracy (Stiglitz Vol. 1, chapter 7, 7.1 and BCS chapter. 8). Externalities and the Environment (Stiglitz Vol.1, chapter 8); the Italian Case. (BCS chapters 7, 8). Stabilization bureau. Fiscal and monetary policies in the European Union. Distribution bureau. Benefits in cash and in kind. Means testing. Italian social policies, poverty, the Beckerman indexes.

Part Four: Government failures. (BCS chapter 8; Stiglitz Vol. 1, chapter 7 -7.2, 7.3, 7.4, 7.5). Theory of bureaucracy. Public mechanisms for allocating resources. The median voter theory and the voting paradox. Arrow's Impossibility Theorem (Stiglitz Vol.1, chapter 6).

Part Five: The Welfare State: European models and characteristics. Social insurance and retirement pensions. The Italian debt: managing the Public Sector's Assets and Liabilities.

Readings/Bibliography

Stiglitz J. (2003), Economia del settore pubblico Volume 1, Hoepli, cap. 1-8.
R. Balducci, G. Candela, A. Scorcu (2001), Introduzione alla politica economica, Zanichelli, Bologna, chapters. 1, 2, 4, 7, 8.

Detailed information on http://economia.ei.unibo.it/ATutor/login.php

Teaching methods

Class lessons.

Assessment methods

Written examination, two hours, four questions (two for each course part).

Teaching tools

Slides. Detailed information on http://economia.ei.unibo.it/ATutor/login.php

Links to further information

http://economia.ei.unibo.it/ATutor/login.php

Office hours

See the website of Cristina Ugolini

See the website of Giovanni Maria Mazzanti