The course provides an introduction to modern political economics. The aim is to explain the determination of economic policy in modern democracies and to analyze how these policies may differ according to the different political institutions in place. The first part of the course will introduce the students to the tools of political economics. The second part will compare the welfare states across industrialized countries, with special emphasis on the pension systems and the labor market,. It will also address the differences in economic policies that may arise from the political institutions, with particular emphasis on the analysis of the electoral rule and of the regime type. The third part will analyze dynamic policies – public debt, economic growth – in a political economy framework to understand how political incentives shape current and future policies. The last part will address the debate between the role of culture and institutions in shaping economic growth.

Welfare States and their programs differ widely across countries and – within the same country – also over time. This course studies the economic and political underpinning of the welfare policies. We use economic principles and political analysis to develop a conceptual framework for investigating government intervention in the market, with a specific focus on the welfare state. To what extent should the government take care of individual risks by setting up public programs, such as pensions, health care, education, labor market and migration policies? How much and how should the government intervene in the case of global shock, such as COVID-19 pandemic? What is the relation between welfare policies and populism? These questions may have a normative answer, provided by public economics, and a positive one, offered by political economics. We will address them in the first part of the course. In the second part of the course, students will be required to develop their own economic and political analysis of an issue, and to design a policy, which is both economically sound and politically feasible. The issues to be analyzed will include policy response to the economic effects of COVID-19, pension and retirement, health care, education, labor market and globalization, and gender. These policies will be discussed in class.