POLITICAL ECONOMY

This module contributes to the fulfilment of the program’s learning objectives of the Curriculum ECONOMICS-QEM of the Master's Degree Programme in ECONOMICS, FINANCE AND SUSTAINABILITY [EM15]. The course is entirely taught in English.
The course allows the student the student to acquire the basic knowledge and understanding of the discipline of Positive Polititcal Theory, and its application for the analysis of US and European Politics. The goal of this module is to provide an understanding of the standard models of group choice and their core applications in Political Economy, including voting and collective action. This will allow the student to perform independent theoretical analysis of current political processes, formulating hypotheses and testing them empirically.

The goal of this course is to introduce you to the field of positive political economy, which seeks to understand and explain policy outcomes and political behavior. We will analyze the decision-making process of rational political actors in the context of institutional constraints. In addition, we will apply economic theories and concepts to gain a better understanding of the outcomes of collective choice and their implementation.
The attendance and participation in the lectures as well as individual study will allow the student to:
1. Knowledge and understanding
1.1 understand the core models in Formal Political Theory
2 Ability to apply knowledge and understanding
2.1 ability to apply formal models to real-World political processes
2.2 ability to formulate testable hypotheses from the theoretical models

The students must meet the minimum credit requirements for the Master's Degree Programme in ECONOMICS, FINANCE AND SUSTAINABILITY [EM15].
Knowledge of calculus and microeconomics at undergraduate level are both required.

The course will cover the following topics:

1. Introduction ([S] Ch.1&2)

(a) Motivation;
(b) Microeconomics review

Formative goal: acquisition or review of basic quantitiative tools required for this course

2. Group Choice ([S] Ch.3&4)

(a) Majority rules
(b) Condorcet's Paradox
(c) The “Divide the dollar" example

Formative goal: understanding of the foundamental problem of group choice

3. Social Choice ([S] Ch.3&4, [LN])

(a) Arrow's Theorem with proof
(b) May's Theorem and Black's Theorem
(c) Single-peakedness

Formative goal: understanding of the technical apsects of group choice

4. Spatial Models of Majority Rule ([S] Ch.5)

(a) Geometric Approach
(b) The median voter
(c) McKelvey's Theorem and Plott's Theorem
(d) Down's Model
(e) Applications

Formative goal: understanding the key tool of voting theory and its possible applications

5. Strategic Behavior and Majority Rule ([S] Ch.6)

(a) Basics
(b) Gibbard-Satterthwaite Theorem with proof
(c) Examples

Formative goal: understanding the foundamental problem of strategic interaction and its consequences for politics

6. Voting Methods and Electoral Systems ([S] Ch.7)

(a) Voting Methods
(b) Electoral Systems

Formative goal: understanding the role played by voting methods and electoral system in shaping political choices

7. Information aggregation ([LN])

(a) Condorcet's Jury Theorem

Formative goal: understanding the conditions for information aggregation through voting and their cosequences

8. Cooperation and Collective Action ([S] Ch.8-9)

(a) Cooperation
(b) Collective Action

Formative goal: understanding the foundamental problem of collective action and its possible solutions

9. Institutions & Legislatures ([S] Ch.11-12)

(a) Institutions
(b) Legislatures

Formative goal: understanding they key features of institutions and in particular those of Legislatures

The main book is [S] Analyzing Politics: Rationality, Behavior, and Institutions by K. Shepsle; W.W. Norton.No particular edition is required.
Other useful references:
[AB] David Austen-Smith, Jeffrey S. Banks (1999), Positive Political Theory I. University of Michigan Press (Chapters 2, 4)
[M] Moulin, H. (1988). Axioms of Cooperative Decision Making (Econometric Society Monographs). Cambridge: Cambridge University Press (Chapters 10–11)
[LN]. Lecture notes are a key part of the course material.
Additional readings might be assigned to link the theory to real-world examples.

A single in-person closed-book written exam will be taken to verify that the students have acquired the necessary knowledge. The use of books, notes, and electronics is not permitted during the exam.

The exam lasts 90 minutes and consists of some quantitiative exercises aiming to verify the understanding of the formal models presented in the course and some small open questions that assess the student's understanding of the implications and possible real-World applications of the mathematical results. The student must show a sufficient understanding of the material covered in the course and the ability of explaining them using the appropriate jargon.

Grading is based solely on a final written exam, four or five questions (closed book) covering the material of the course. Each question consists of 2/3 small quntitative exercises and 1/2 short open questions, each worth a specific number of points, which is specified on the side and a maximum aggregate score of 100. The minimum passing score is 55/100, corresponding to a grade equal to 18/30.

written

The minimum passing score is 55/100, corresponding to a grade equal to 18/30.

Grades are assigned irrespective of the attendance of the course in the following way:

A. Grades in the 18-22 range require:
- sufficient understanding of the course material
- limited ability to perform independent analysis using the theoretical tools
- sufficient communication ability and use of the appropriate jargon

B. Grades in the 23-26 range require:
- good understanding of the course material
- some ability to perform independent analysis using the theoretical tools
- good communication ability and use of the appropriate jargon

C. Grades in the 27-30 range require:
- excellent understanding of the course material
- good ability to perform independent analysis using the theoretical tools
- excellent communication ability and use of the appropriate jargon

D. A grade of 30/30 cum laude is awarded only if the student demonstrate a profound and extensive understanding on the course material, an outstanding ability to apply this knowledge to analyze key aspects of US and European political process in an independent way, as wel as excellent communication skills and use of the appropriate jargon

The couse is organized as follows:

- Traditional front lectures
- Exercise sessions (scheduled during lectures)
- In-class discussions.

Frontal lectures will make use of slides available on the University learning platform moodle.unive.it.

Class recordings are not going to be made available except for authorized students.

This syllabus is provisional and may be subject to changes. Any change will be made public both here on the Moodle page of the course.