This course will introduce public policy and public finance in such a way that it will enable participants to understand how to approach a wide range of important political and economic policy problems and participate in public policy debates.
In addition to lectures and seminars covering key aspects of public policy and public finance, the course will feature a series of talks from former leading politicians, policymakers, advisors, central bankers and civil servants on applied topics raised in the course. Guest speakers will include the Chief Economist of the Bank of England, Andy Haldane; former Cabinet Minister Rt. Hon Ruth Kelly; the former Chief Economist at Lloyds Bank Trevor Williams; and Chris Snowdon from the Institute of Economic Affairs amongst others. Alberto Asquer, Lecturer in Public Finance and Management at SOAS and author of the recently published book Public Sector Revenue – Principles, Policies and Management (Routledge, 2017), will give the public finance lectures.
There will also be field trips to the Bank of England and the Houses of Parliament.
This course will be taught at an intermediate level. Prior study of economics is not a pre-requisite for this course: the material is relevant for anybody who is studying for an economics degree or a degree in a related subject. It is also suitable for anyone who is studying or has studied Politics, Political Economy, Public Policy, Sociology, Law or Mathematics/Statistics at undergraduate level. The course is also relevant to ublic policy practitioners from government or industry and the course team is happy to discuss any inquiries as to whether your background is suitable.
The course aims to apply economic principles to public policy making, but using a framework based on wider assumptions than those that underpin the traditional way of thinking about such matters in undergraduate economics courses. As such, it will overlap with the discipline of political economy. After tak.ing the course, students will understand public policy and public finance problems from a wide range of perspectives. Students will then be given a grounding in areas of economics for which Nobel Prizes have been awarded in the last 30 years and which provide a wider perspective of public policy issues. This includes public choice economics, Austrian economics, behavioural economics and institutional economics. The course also aims to give students the ability to apply the ideas to a set of contemporary public policy problems.
Syllabus and Course overview
This course will apply economic principles to public policy and public finance. Underlying the course will be the presentation of a set of approaches to economics that will enable participants to take part in debates about public policy and public finance at a theoretical and practical level. During the course, a series of current public policy and public finance issues will also be examined by practitioners.
As well as providing the background of public finance and public policy that will allow participants to understand how to better approach a wide range of public policy problems, the course will feature a series of talks from former leading politicians, policymakers, advisors, central bankers and civil servants on applied topics raised in the course
This course is designed and taught by Philip Booth and Andre Alves. Philip Booth is Professor of Finance, Public Policy and Ethics at St Mary's University and former Academic and Research Director at the Institute of Economic Affairs. Andre Alves is Research Director at the Institute for Political Studies of the Catholic University of Portugal and Reader in Economics, Political Economy, and Public Policy at St Mary’s University.
The topics to be covered include:
- Brexit, trade and globalisation
- Theory and general principles: market failure and government failure
- Overview of public finance, levels of public spending and functions on which governments spend money at different stages of development
- Financing government spending by taxation – the impacts of different taxes, principles of good taxes and the sort of tax systems we see in practice
- Sub-national government – arguments for and against decentralisation and the different approaches that are taken in different countries; direct democracy
- How government debt finances spending, an examination of its build up and what happens when debt becomes too high
- Behavioural economics and public policy
- Public choice economics - 'the economics of politics'
- Interest groups and public policy - the economics of rent seeking
- Theories of institutional change and economic development
- Debates about fiscal policy, monetary policy and central banking (visit to the Bank of England).
The course will include various case studies taken from the list of topics below:
- Minimum wages
- Externalities and ‘sin’ taxes
- The economics of prisons
- The financial crisis
- Institutions, foreign aid and development
- Modern slavery
- Pay-as-you-go social security systems - is the West bankrupt?
- Institutions and the preservation of the environment
- Healthcare and education – public policy and 'market failure'
- Investment, research and development
- Understand the application of neo-classical market failure models to public policy problems and the difficulties with such models.
- Understand how economics problems are resolved in theory through political systems.
- A knowledge of the importance of institutions for economic growth.
- A knowledge of the importance of entrepreneurship and its relationship with public policy.
- An understanding of the application of theory to the analysis of specific public policy problems.
- An understanding of how the political system can work in practice to subvert the implementation of good economic policy.
- An understanding of the functions of government, government spending and revenue raising.
For this course, there will be an average of about 4 hours of teaching per day, comprised mainly of lectures and presentations based on case studies and applications to contemporary public policy and public finance problems. The structure will be:
- 20-25 hours of lectures
- 10-15 hours of presentations on case studies by current and former leading public policy practitioners
- 6-8 hours of seminars in small groups.
- Two off-site visits relevant to the course (Houses of Parliament and Bank of England).
Students will also be given time each day for independent study. Towards the end of the third week, students will be provided with specific sessions and time for revision.
At the beginning of the course, students will be allocated to small groups. Each group will prepare a 10 minute video or give a 10 minute presentation on a particular public policy topic towards the end of the course. The module will be assessed via the 10 minute video or presentation (worth 30% of the total mark) and a 2-hour examination (worth 70% of the total mark). It is not compulsory, but anyone wishing to obtain a transcript of results for the Warwick Summer School must sit this examination.
Course Reading list
- Acemoglu, Daron & Robinson, James, Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Profile Books, 2013.
- Achen, Christopher & Bartels, Larry, Democracy for Realists: Why Elections Do Not Produce Responsive Government. Princeton University Press, 2016.
- Asquer, Alberto, Public Sector Revenue: Principles, Policies and Management. Routledge, 2017.
- Alves, André Azevedo, “No Salvation through Constitutions: Jasay versus Buchanan and Rawls”, The Independent Review 20 (1), 33-46, 2015.
- Booth, Philip (ed.), Taxation, Government Spending and Economic Growth, especially chapters 2, 3, 9 and 10.
- Brennan, Geoffrey and Buchanan, James, The Reason of Rules: Constitutional Political Economy. Liberty Fund, 1999 .
- Buchanan, James, The Power to Tax: Analytical Foundations of a Fiscal Constitution. Liberty Fund: 2000 .
- Buchanan James R. The Constitution of Economic Policy, Nobel Prize Lecture, December 1986
- Butler E. Public Choice – A Primer (available from the website of the Institute of Economic Affairs in English, Korean, Portuguese and Farsi)
- North, Douglass., Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press, 1990.
- Olson, Mancur, The Rise and Decline of Nations. New Haven: Yale University Press, 1982.
- Ostrom, Elinor, Beyond Markets and States, Nobel Prize Lecture, December 2009