Public Economics, IDEA Programme (September-November 2013)

Session 1: Motivation and Empirical Tools

This session will motivate the focus on political economy and the move away from standard growth models towards understanding institutions and conflict.

∙ Main sources:
∙ Homework: Explore the Polity IV dataset

Sessions 2 and 3: Voting

∙ Median Voter Model
∙ Multidimensional Voting
∙ Citizen Candidate
∙ DellaVigna, Stefano and Ethan Kaplan (2007) The Fox News Effect: Media Bias and Voting. Quarterly Journal of Economics, 122, pp. 1187-1234.
∙ Chattopadhyay, Raghabendra and Esther Duflo (2004) Women as Policy Makers: Evidence from a Randomized Policy Experiment in India. Econometrica, 72(5), pp. 1409--1443.
∙ Sturm and List (2006) How Elections Matter: Theory and Evidence from Environmental Policy. Quarterly Journal of Economics, 121(4), 1249-1281.

Session 4: Political Accountability/Competition

∙ Maskin and Tirole (2004) The Politician and the Judge: Accountability in Government. American Economic Review 94(4), pp. 1034-1054.
∙ Hanssen (2004) Is There a Politically Optimal Level of Judicial Independence? American Economic Review, 94(3), 712-729.

Sessions 5 and 6: The Bureaucracy

∙ Aghion and Tirole (1997) Formal and Real Authority. Journal of Political Economy, 105(1).
∙ Banerjee (1997) A Theory of Misgovernance. QJE,
∙ Mueller Meritocracy and Patronage (2013) Mimeo
∙ Iyer and Mani (2010) Traveling Agents: Political Change and Bureaucratic Turnover in India. Review of Economics and Statistics.

Session 7 and 8: Property Rights and the Legal System

∙ Besley and Ghatak (2010) Property Rights and Economic Development. Handbook of Development Economics
∙ Glaeser and Shleifer (2002) Legal Origins. QJE
∙ Goldstein and Udry (2008) The Profits of Power: Land Rights and Agricultural Investment in Ghana, Journal of Political Economy

Session 9: The Power of Money

∙ Grossman and Helpman (1996) Electoral Competition and Special Interest Politics. Review of Economic Studies. 63 (2), pp. 265-286
∙ Blanes i Vidal, Draca, and Fons-Rosen (2012) Revolving Door Lobbyists. American Economic Review, 102(7): 3731-48.
∙ Kuziemko, Ilyana and Eric Werker (2006) How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations. Journal of Political Economy, 114(5), pp. 905-930.

Sessions 10 and 11: State Capacity/State Failure

∙ Besley, Tim and Torsten Persson (2010) State Capacity, Conflict, and Development. Econometrica, 78(1), pp. 1-34.
∙ Besley, Tim and Torsten Persson (2011) The Logic of Political Violence. Quarterly Journal of Economics, 126(3), 1411-1445.*

Session 12: Inequality and the Working of Institutions

∙ Inequality and the inefficient allocation of resources: Survey by R. Benabou
∙ Inequality and Government Informational Transparency: Albornoz, Esteban, Vanin (JEEA, 2013)
∙ Inequality and Government Efficency: Esteban and Ray (AER)

Part 2: Social Conflict
Session 13: Social Conflict: basic facts

∙ How much conflict
∙ Data sources
∙ Some empirical results
∙ Main features of conflict: ethnicity vs class, greed vs grievance.
∙ Social Antagonisms and Polarization

All based on class notes.

Session 14: Determinants of Conflict: Theory and Evidence

∙ A general model of conflict: Esteban and Ray, JET 1999
∙ Polarization, Inequality and Conflict: Esteban and Ray, AER 2011
∙ Bringing the Model to Data: Esteban and Ray, AER 2012 and Science 2012.
∙ Homogeneity and Heterogeneity in Conflict: Esteban and Ray, JEEA 2012.
∙ Class versus Ethnicity: Esteban and Ray, AER 2008

Session 15: Agreements in the Shadow of Conflict

∙ The Nash Solution Pareto Dominates Conflict
∙ Strategic Choice of the Disagreement Point. Class notes
∙ Bargaining in the Shadow of Conflict. Esteban and Sákovics, Theory and Decision 2008
∙ Civil conflict as a repeated interaction: why mass killings. Esteban, Morelli, Rohner 2013

Session 16: The Economic Cost of Lawlessness

∙ Besley, Tim; Thiemo Fetzner and Hannes Mueller (2012) The Welfare Cost of Lawlessness: Evidence from Somali Piracy. Mimeo.

Sessions 17 and 18: The Economic Cost of Violence

∙ Besley, Tim and Hannes Mueller (2012) Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland. American Economic Review, 102(2), 810-833.
∙ Mueller, Hannes (2013) The Economic Cost of Conflict. IGC Study.