Currently, in most of the economics that is taught, government decisions are not adequately explained, but are treated as exogenous, or (sometimes), assumed to be determined by considerations of ‘optimality’. The course seeks to develop an understanding of how governments actually use their ‘policy space’ in economic matters, and how they actually respond to expansions (or contractions) in that space.

Upon successful completion of the requirements for this course, students will be able to:

• Appreciate the concept of endogenous economic policy decision s

• Absorb scholarly papers that make use of the fundamentals of the models of ‘political economy’

• Produce simple political economy models

• Discern the political economy angle of concrete policy problems

Mid Term Tests: 15 percent

Written Assignment: 15 percent

Graduate Seminar: 10 percent

Examination: 60 percent

Students taking this course are expected to commit at least 12 hours a week comprised of:

• 2 hours of lectures and,

• 1 hour of tutorial, and

• 1 hours of graduate seminar,,

and

• 7 hours of private study.

This course requires attendance at lecture, tutorials and the seminar.

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From the commencement of the course, students are expected to be able to be proficient in basic consumer optimisation theory, competitive market partial equilibrium, monopoly, the basic theory of public goods, and the Nash equilibrium concept.

Texts and Other Reading

Prescribed Texts

There is currently no suitable text.

Recommended Reading

Brennan, Geoffrey and James M Buchanan 1980 The Power to Tax, chs 2,3 and 4,  CUP

Brennan G, and Lomasky L 1987, ‘The Impartial Spectator Goes to Washington: towards a Smithian Theory of Electoral Behaviour’ Economics and Philosophy 189-211

Buchanan, J,M. 1975 ‘Constitutional Contract’, in The Limits of Liberty, University of Chicago

Hamlin, A.P. ‘The Political Economy of Constitutional Federalism’, Public Choice, 46(2) 187-195

Niskanen, William A.  1994, Bureaucracy and public economics, Aldershot : Elgar

Olson, Mancur 2000, Power and Prosperity : outgrowing communist and capitalist dictatorships New York : Basic Books

Peltzman, S. 1974 ‘Towards a More General Theory of Regulation’, Journal of Law and Economics, 335-58

Tollison R.D. 1989, ‘Chicago Political Economy’ Public Choice 63, 293-297

Tullock G ‘Efficient Rent Seeking’ in Towards a Theory of the Rent Seeking Society, eds JM Buchanan, RD Tolison and G Tullock

Equipment available in standard lecture theatres on the campus.