Topics in Political Economy
Module Code: EC4170
Module Title: Topics in Political Economy
- ECTS Weighting: 15
- Semester/Term Taught: Michaelmas + Hilary Terms
- Contact Hours: 44 hours of lectures (two 50 minute lectures per week) plus one tutorial per week.
- Module Personnel: Lecturers - Professor Nicola Mastrorocco
The module will be primarily based on the reading of recent research academic papers and the in-depth discussion of their theories, empirical methods, and results.
The following books are recommended as supplements to what is covered in the lectures.
- Besley, Timothy: Principled Agents? Oxford University Press  (henceforth: Besley)
- Mueller, Dennis: Public Choice III, Cambridge University Press  (henceforth: Mueller)
- Persson, Torsten & Guido Tabellini: Political Economics, MIT Press  (henceforth P&T)
- Shepsle, Kenneth: Analyzing Politics, Norton  (henceforth Shepsle)
Module Learning Aims
The module will introduce students to the field of political economics, which applies the toolbox of economic analysis to the study of politics.
The course will be organized around a series of topics: starting with the economic analysis of voting decisions, it will then focus on the selection and motivations of politicians and their impact on public policy, and on questions such as political accountability and corruption. It will then examine the role of mass media and its impact on electoral politics and policy-making, as well as the issue of political distortions through examples such as patronage politics, lobbying, and political connections. Finally, it will discuss issues related to organised crime, conflict and violence, as well as the origins, persistence and impact of political institutions.
This module aims to:
- provide students with an exposure to fundamental ideas in the field of political economy. The module will cover both theoretical and empirical papers.
- introduce student to the variety of ways in which economists think about political economy and, more precisely, the interplay of political science and economics.
- provide students interested in interdisciplinary work with a bridge between subjects as diverse as economics, political science, sociology, history, and philosophy.
- Political economy uses tools from economics (mainly game theory and econometrics) to study how political actors, institutions, and choices shape economic or political outcomes. Hence, students will be exposed to various concepts in game theory (e.g., Nash Equilibrium, Perfect Bayesian Equilibrium) as well as methods in empirical analysis (OLS, Instrumental Variable, Panel Data).
- provide students with the skills to write and argue coherently and persuasively.
- provide students with the intellectual foundations on which an undergraduate dissertation can be written.
On successful completion of this module, students should be able to:
- Comfortably analyze different theories of social choice (how do groups of rational individuals take decisions) and collective action (how do groups of rational individuals take actions) and voting.
- Analyze the effect of political variables on the determination of economic outcomes. What is the impact of different political systems on economic outcomes (Growth, Inequality, Fiscal Policy, Public Goods)? How can special groups of individuals enhance their well-being by political action? What is lobbying? What is the effect of contributions to politicians on political outcomes?
- Analyze the effect of Mass Media on political outcomes, individual perceptions and voting decisions. How do media shape individual opinions and therefore their voting decisions? How does media affect citizens’ capacity to hold politicians accountable?
- Analyze the effect of Organized Crime and Corruption on political outcomes, economic decisions (public goods, fiscal policy) and social cohesion.
Recommended Reading List
The module will be primarily based on the reading of recent research papers and the in-depth discussion of their theories, empirical methods, and results.
The set of readings will be available at the beginning of the module.
Module Pre Requisite
Students will hand in one written essay or problem set based on their reading of the literature for each term. Each essay accounts for 20% of the overall grade. 10% will be graded for the Reaction Paper: two times during the course each student is expected to write a one-page comment of one (or more) of the papers assigned that week. The reaction paper has to be e-mailed by 7 pm the day before class to the instructor.
A final exam accounts for 50% of the overall grade.