Core II Economics for Public Policy: Course Handout

2014-2015
This Draft 30 October 2014

Introduction
Course Objectives
Public policy leaders frequently interact with professional economists. This course aims to prepare MPP
graduates for this interaction by developing the skills necessary to become a critical consumer of economic
thinking. Weeks 1 to 3 cover foundational material. The first week introduces the mainstream economic
approach and considers the range of policy issues to which it can usefully be applied. The second and third
weeks explore economists preoccupation with markets, asking what markets can achieve, and why they
sometimes fail. Weeks 4 to 8 turn to the process of policy formulation (the finance, design, choice, and
implementation of policy). The fourth week considers the challenges of financing policy via taxation and/or
debt. The fifth and sixth weeks focus on design, illustrating with policy responses in healthcare, welfare
services, and labour markets. The seventh week asks how public policy leaders should choose between
competing project designs. The eighth week examines the political obstacles that can hinder implementation,
together with solutions suggested by the economic literature on institutions.
Following attendance at the teaching sessions throughout the term, successful completion of assigned
readings, assignments, and recommended private study, students should be able to:
explain the mainstream economic approach (including key concepts such as social opportunity cost),
appreciate the limitations of this approach, and identify novel applications;
understand the economic rationale for government intervention in a variety of global settings, and
critically appraise specific policy responses;
appreciate the challenges associated with the finance and implementation of public policy, both in theory
and in practice.
More detailed learning objectives for each week of the course are available on weblearn (e.g. for Week 1, go
to the folder Core II: Economics for Public Policy, then the subfolder Michaelmas 1 and open About
Economics Week 1).

Faculty

There are seven members of the core teaching team:

Jacobus Cilliers (seminar leader), jacobus.cilliers@gmail.com
Osea Giuntella (seminar leader, guest lecturer), osea.giuntella@bsg.ox.ac.uk
Julien Labonne (seminar leader), julien.labonne@bsg.ox.ac.uk
Clare Leaver (course convenor, lecturer), clare.leaver@bsg.ox.ac.uk
Esteban Ortiz Ospina (seminar leader, guest lecturer), esteban.ortiz-ospina@univ.ox.ac.uk
Lorenzo Rotunno (seminar leader, guest lecturer), lorenzo.rotunno@bsg.ox.ac.uk
Daniela Scur (seminar leader), daniela.scur@economics.ox.ac.uk
The course also features a number of guest lecturers from Departments and Colleges within Oxford, and
beyond. Biographies of these guest lecturers are also available in the About Economics files on weblearn
(e.g. for Week 1, go to the folder Core II: Economics for Public Policy, then the subfolder Michaelmas 1 and
open About Economics Week 1).

Queries and Feedback

Queries relating to the organization of the course should be addressed to the Convenor. If you have a
question relating to the content of a specific teaching session, then please either contact the lecturer
concerned or include your question in the dedicated questions and comments section of the weekly

assignment on weblearn. There will also be informal feedback sessions every week in the lobby at10 Merton
Street, and a formal survey at the end of the course.

Organisation of Teaching
The course has 8 week long themes, each of which is intended to address a particular challenge faced by
those working in government. In each week, the teaching is divided into three components: Core Teaching
Sessions, a Policy Lecture, and a Seminar. An overview the Course Matrix is available in the Core II
General folder on weblearn.
Core Teaching Sessions
These sessions will be led by academic faculty and will take place in the Lecture Room.
Section 1: Mondays 13.30-15.00, Tuesdays 14.00-15.30.
Section 2: Mondays 15.30-17.00, Tuesdays 11.30-13.00.
The purpose of these sessions is to introduce and discuss the key concepts that economists use when
analysing that weeks challenge. Most sessions will feature a mix of lecturing and group discussion. The
academic leading the session will not assume that students have any prior training in economics. However, to
leave sufficient time for discussion, the pace of his/her lecturing will be reasonably high. In particular, he/she
will assume that students have at least skim read the Essential Reading in the lists below before coming to
the lecture. Please do your best to ensure that this is the case. As discussed in more detail below under
Formative Assessment, each week students will be expected to complete a short assignment that draws on
the material in these Core Teaching Sessions, as well as the Essential Reading.
Policy Lectures
These lectures will be given by distinguished economists who have extensive experience working on public
policy for governments or in private firms and will take place in the Lecture Room.
Sections 1 and 2: Wednesdays at 11.00-12.30.
The purpose of these lectures is to illustrate how the key economic concepts introduced in the Core Teaching
Sessions have (or in some cases have not!) been used in the formation of public policy related to that weeks
challenge.
Seminars
These seminars will be co-taught by the entire teaching team. Please assemble in the Lecture Room. The
time will be split into a 30-minute Review of the Week with Clare Leaver, after which groups will break out
into the Lecture Room, Board Room, Oval Room and Group Working Rooms 3 and 4 for 1-hour sessions with
their seminar leaders.
Section 1: Fridays 09.30-11.00.
Section 2: Fridays 11.30-13.00.
The purpose of these sessions is two-fold. (1) To recap, and answer questions arising from, the material in
the Core Teaching Sessions and Policy Lecture. (2) To discuss the group component of the weekly
assignment with your seminar leader. For group allocations, please see the Appendix.

Optional Sessions
There will be two optional introductory sessions in Week -1. These sessions will be led by Esteban Ortiz
Ospina and will take place in the Lecture Room.
Wednesday 1 October 11.30-12.30
Thursday 2 October 13.30-14.30
These sessions are aimed at students who have not studied economics before and are intended to provide a
review of the material in the introductory summer readings, listed below and available on weblearn. There
will be plenty of opportunity for Q&A.

Paul Krugman and Robin Wells, 2013. Microeconomics, (3nd Edition, Worth Publishers). Chapter 1.
Paul Krugman and Robin Wells, 2013. Macroeconomics, (3nd Edition, Worth Publishers). Chapter 6.

Members of the teaching team will also run optional Q&A sessions throughout the eight weeks of the course.
Key Concepts with Esteban Ortiz Ospina: Wednesdays 17.00-18.00 in the Board Room.1
Review of Individual Assignments with Daniela Scur: Fridays 16.00-17.00 in the Board Room.
Digger Deeper: Fridays at 16.00-17.00 in the Oval Room.
Week 2, International Trade with Lorenzo Rotunno
Week 3, Market Failure with Clare Leaver
Week 4, Government Debt and Further Macro Issues with Simon Wren Lewis
Week 5, Health with Osea Guintella (usual time), Education with Jacobus Cilliers (17.30-18.30)
Week 6, Jobs and Welfare with Daniela Scur
Week 7, Cost-Effectiveness Analysis with Esteban Ortiz Ospina
Week 8, Capture and Corruption with Julien Labonne

Formative Assessment
Students will be asked to complete an assignment every week. These assignments will be available on
weblearn shortly before the first Core Teaching Session on Monday. Each assignment will contain questions
(multiple choice, short answer, true/false etc.) to by answered and submitted via weblearn no later
than Thursday at 9am, and a task to be undertaken in advance of the Friday Seminar. Answering the
questions should essentially be an individual activity. Your answers will be marked (in advance of the Friday
seminar) but will not contribute to your grade for the course. You should therefore view this part of the
assignment as an opportunity to check that you understand the key economic concepts covered in the Core
Teaching Sessions and in the Essential Reading. The task, on the other hand, is a group activity. Students
have been allocated to a small group (see Appendix). You will be asked to work together with the other
members of your group on a task and to discuss your results with your seminar leader at the Friday Seminar.
You will receive feedback on your task but, again, this will not contribute to your grade for the course. You
should use this part of the assignment as an opportunity to improve your group-working and presentation
skills.

Summative Assessment
The course will be assessed by a 3 hour unseen exam in Trinity term 2015. A Specimen Paper is available in
the Core II General folder on weblearn.

Except in Week 1, when the Key Concepts session will run from 17.45-18.45 to avoid a clash with the writing course.

Reading List
W eek 1

How Economists Think

Session 1
Mon Oct 13

Lecturer
Title

Clare Leaver
Rational Choice Theory: Implications and Anomalies

Essential
Reading

Paul Krugman and Robin Wells, 2013. Microeconomics, (3nd Edition, Worth
Publishers). Chapter 1. Weblearn 2.1
Robert Frank, 2010. Microeconomics and Behaviour, (8th Edition McGraw
Hill). Chapter 1.
Roger Backhouse and Steven Medema, 2009. On the Definition of
Economics, Journal of Economic Perspectives, vol. 23(1), pages 221-233.
Weblearn 2.2

Further Reading

Robert Frank, 2010. Microeconomics and Behaviour, (8th Edition McGraw

Hill). Chapter 8.
Milton Friedman, 1953. The Methodology of Positive Economics, in Essays
in Positive Economics (University of Chicago Press). Weblearn 4.1
Shaun Hargreaves Heap et al, 1992. The Theory of Choice: A Critical Guide
(Blackwell). Chapters 1-3. Weblearn 4.2
Alex Rosenberg and Tyler Curtain, 2013. What is economics good for?, New
York Times, August 24 2013. Weblearn 4.3

Lecturer
Title

Simon Wren-Lewis
M acroeconomics and M icrofoundations

Essential
Reading

Paul Krugman and Robin Wells, 2013. Macroeconomics, (3nd Edition, Worth
Publishers). Chapter 6. Weblearn 2.3
Michael Burda and Charles Wyplosz, 2009. Macroeconomics: A European
Text (5th Edition, OUP). Chapter 1. Weblearn 2.4
N. Gregory Mankiw, 2006. The Macroeconomist as Scientist and Engineer,
Journal of Economic Perspectives, vol. 20(4), pages 29-46. Weblearn 2.5

Further Reading

John J. Seater, 1993. Ricardian Equivalence, Journal of Economic Literature,

vol. 31, pages 142-190. Weblearn 4.4
Paul Krugman, 2009. How did macroeconomists get it so wrong? New York
Times, September 2 2009. Weblearn 4.5
Alan S. Blinder, 1987. Keynes, Lucas, and Scientific Progress, American
Economic Review P&P, vol. 77, pages 130-136. Weblearn 4.6
Joseph Stiglitz, 1997. Reflections on the Natural Rate Hypothesis, Journal of
Economic Perspectives, vol. 11(1), pages 3-10. Weblearn 4.7
Laurence Ball and N. Gregory Mankiw, 2002. The NAIRU in Theory and
Practice, Journal of Economic Perspectives, vol. 16(4), pages 115136.
Weblearn 4.8

Lecturer
Title

Mark Henstridge, Oxford Policy Management.

Using Economic Thinking in Public Policy

Viewing

The Bank, The President, and the Pearl of Africa (to be shown in two parts in
the Lecture Room on Mon Oct 13 19:30 and on Tue Oct 14 at 18:00)
Michael Burda and Charles Wyplosz, 2009. Macroeconomics: A European
Text (5th Edition, OUP). Chapter 2.
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter 4.

Session 2
Tue Oct 14

Session 3
Wed Oct 15

Reading

W eek 2

W hat M arkets Can Achieve

Session 1
Mon Oct 20

Lecturer
Title

Clare Leaver
Pareto Efficiency and M arket Equilibrium

Essential
Reading

Nicholas Barr, 2011. The Economics of the Welfare State (OUP, 5th Edition).
Chapter 3, Section 3.1-3.3.1 (see also the non-technical chapter summary).
Weblearn 2.1
Robert Frank, 2010. Microeconomics and Behaviour, (8th Edition McGraw Hill).
Chapters 2 and 18 (online). Weblearn 2.2
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth, 4th Edition).
Chapter 2. Weblearn 2.3

Further Reading

Shaun Hargreaves Heap et al, 1992. The Theory of Choice: A Critical Guide
(Blackwell). Chapter 12.
Yew-Kwang Ng, 2004. Welfare Economics: Towards a More Complete Analysis
(Palgrave). Chapters 1 and 2 (you may find Chapter 11 interesting too).
Weblearn 4.1
Andrei Shleifer, 2009. The Age of Milton Friedman, Journal of Economic
Literature, 47(1), pages 123-135. Weblearn 4.2

Lecturer
Title

Lorenzo Rotunno
International Trade

Essential
Reading

Further Reading

Paul Krugman, Maurice Obstfeld and Marc Melitz, 2011. International

Economics: Theory and Policy (9th edition, Prentice Hall). Chapters 3, 5 and 9.
Weblearn 2.4
Gene Grossman and Henrik Horn, 2012. Why the WTO? An Introduction to
the Economics of Trade Agreements. The American Law Institute. WL 2.5
Edward E. Leamer, 2007. A Flat World, A Level Playing Field, a Small World
After All, or None of the Above?, Journal of Economic Literature, 45(1), pages
83-126. Weblearn 2.6
Daniel M. Bernhofen and John C. Brown, 2004. A Direct Test of the Theory of
Comparative Advantage: The Case of Japan, Journal of Political Economy,
112(1): 48-67. Weblearn 4.3
Richard Baldwin, 2011. 21st Century Regionalism: Filling the gap between 21st
century trade and 20th century trade rules. CEPR Policy Insight n. 56.
Weblearn 4.4
David Hummels, 2007. Transportation Costs and International Trade in the
Second Era of Globalization, Journal of Economic Perspectives, 21(3), pages
131-154. Weblearn 4.5

Lecturer
Title

Kevin ORourke, Department of History.

Globalisation in Historical Perspective

Optional
Reading

Ronald Findlay and Kevin H. ORourke, 2007. Power and Plenty: Trade, War and
the World Economy in the Second Millennium (Princeton), Chapter 7. Weblearn
4.6
Michael Huberman, 2012. Odd Couple: International Trade and Labor
Standards in History (Yale). Chapter 1. Weblearn 4.7
Kevin H. ORourke and Jeffrey G. Williamson, 1999. Globalization and History:
The Evolution of a Nineteenth-Century Atlantic Economy. Chapter 14.
Weblearn 4.8
Jeffrey G. Williamson, 2011. Trade and Poverty: When the Third World Fell
Behind (MIT). Chapters 1, 2, 11-14. Weblearn 4.9

Session 2
Tue Oct 21

Session 3
Wed Oct 22

W eek 3

W hy M arkets Can Fail

Session 1
Mon Oct 27

Lecturer
Title

Clare Leaver
Imperfect Competition and Imperfect Information

Essential
Reading

Nicholas Barr, 2011. The Economics of the Welfare State (OUP, 5th Edition).
Chapter 3 (Section 3.3.2-3.3.7), 4. Weblearn 2.1
Robert Frank, 2010. Microeconomics and Behaviour, (8th Edition McGraw Hill).
Chapter 12.
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter 12.

Further Reading

Joseph Farrell, 1987. Information and the Coase Theorem, Journal of

Economic Perspectives, 1(2), pages 113-129. Weblearn 4.1
Joseph Stiglitz, 2002. Information and the change in the paradigm in
Economics, American Economic Review, 92(3), pages 460-501. Introduction
and Sections III and IV. Weblearn 4.2

Lecturer
Title

Clare Leaver
Externalities and Public Goods, Irrationality

Essential
Reading

Barr, as above. Chapter 3 (Section 3.3.2-3.3.7).

Session 2
Tue Oct 28

Robert Frank, 2010. Microeconomics and Behaviour, (8th Edition McGraw Hill).
Chapters 8, 16.
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter 57.

Session 3
Wed Oct 29

Further Reading

Ronald Coase, 1960. The Problem of Social Cost, Journal of Law and
Economics, 3, pages 1-44. 4.3 Weblearn 4.3
Garrett Hardin, 1968. The Tragedy of the Commons, Science, 162, pages
1243-1248. Weblearn 4.4
Cameron Hepburn, 2010. Environmental Policy, Government, and the Market,
Oxford Review of Economic Policy, 26(2), pages 117-136. Weblearn 4.5
Ian Parry et al, 2007. Automobile Externalities and Policies, Journal of
Economic Literature, XLV, pages 373-399. Weblearn 4.6
Richard Thaler and Cass Sunstein, 2008. Nudge: Improving Decisions About
Health, Wealth, and Happiness (Yale University Press). Weblearn 4.7. See also
this recent review of Sunsteins books
http://www.nybooks.com/articles/archives/2014/oct/09/cass-sunstein-itsall-your-own-good/?insrc=toc.

Lecturer
Title

John Vickers, All Souls College.

Banking Reform

Reading

Independent Commission on Banking, 2011. Final Report and

Recommendations. Executive Summary. Weblearn 4.8
Making banks safe: Calling to accounts, The Economist, Schools Brief, October
5 2013. Weblearn 4.9

W eek 4

Financing Policy

Session 1
Mon Nov 3

Lecturer
Title

Clare Leaver
The Optimal Tax Problem

Essential
Reading

Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter
19.
N. Gregory Mankiw, Matthew Weinzierl, and Danny Yagan, 2009. Optimal
Taxation in Theory and in Practice, Journal of Economic Perspectives, vol.
23(4), pages 147-174. Weblearn 2.1
Partha Dasgupta, 1982. Utilitarianism, Information and Rights in A. Sen and
B. Williams (eds.) Utilitarianism and Beyond, (CUP). Weblearn 2.2

Further Reading

Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapters
18, 20.
N. Gregory Mankiw, 2008. Smart Taxes: An Open Invitation to Join the Pigou
Club, Working Paper. Weblearn 4.1
Peter Diamond and Emmanuel Saez, 2011. The Case for a Progressive Tax:
From Basic Research to Policy Recommendations, Journal of Economic
Perspectives, vol. 25(4), pages 165-190. Weblearn 4.2
Robin Boadway, 2010. Efficiency and Redistribution: An Evaluative Review of
Louis Kaplows The Theory of Taxation and Public Economics, Journal of
Economic Literature, vol. 48(4), pages 964-979. Weblearn 4.3

Lecturer
Title

Simon Wren-Lewis
Is there a government debt crisis?

Essential
Reading

B. Douglas Bernheim, 1989. A Neoclassical Perspective on Budget Deficits

Journal of Economic Perspectives, vol. 3, pages 55-72. Weblearn 2.3
Carmen Reinhart and Kenneth Rogoff, K, 2011. From Financial Crash to Debt
Crisis, American Economic Review, vol. 101, pages 1676-1706. Weblearn
2.4
Simon Wren-Lewis, 2011. Lessons from failure: fiscal policy, indulgence and
ideology, National Institute Economic Review, vol. 217(1) pages R31-R46.
Weblearn 2.5
Stimulus v austerity: Sovereign Doubts, The Economist, September 28,
2013. Weblearn 2.6

Further Reading

Paul DeGrauwe, 2010. Fighting the Wrong Enemy, Vox May 19 2010.
Weblearn 4.4
Simon Wren-Lewis, 2012. Government debt and the burden on future
generations, Mainly Macro, May 26 2012. Weblearn 4.5
Simon Wren-Lewis, 2012. Unfunded pension schemes and intergenerational
equity, Mainly Macro, June 5 2012. Weblearn 4.6
Lars Calmfors and Simon Wren-Lewis, 2011. What Should Fiscal Councils
Do?, Economic Policy, vol. 26, pages 649-695. Weblearn 4.7
Andrew Scott, 2008. Does rising government debt signal a return to higher
inflation?, EconoMonitor, May 21 2008. Weblearn 4.8

Lecturer
Title

Stephen Nickell, Nuffield College.

Budgetary Responsibility

Reading

Office for Budgetary Responsibility, 2011. Economic and Fiscal Outlook, CM

8218. Executive Summary. 2.8
Treasury Select Committee Evidence, December 6 2011. Ev 22- Ev38. 4.9
Treasury Select Committee Evidence on You Tube. Weblearn 4.10

Session 2
Tue Nov 4

Session 3
Wed Nov 5

Viewing

W eek 5

Designing Policy I: Service Delivery

Session 1
Mon Nov 10

Lecturer
Title

Clare Leaver
Education

Essential
Reading

Nicholas Barr, 2011. The Economics of the Welfare State (OUP, 5th Edition).
Chapter 1, 2, 11.
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chp 11.
Nazmul Chaudhury et al, 2006. Missing in Action: Teacher and Health
Worker Absence in Developing Countries, Journal of Economic Perspectives,
20(1), pages 91-116. Weblearn 2.1

Further Reading

OECD, 2014. Education at a Glance 2014: Highlights (Paris OECD). WL 4.1

Jacobus Cilliers et al, 2013. Improving Teacher Attendance Using a Locally
Managed Monitoring Scheme: Evidence from Ugandan Primary Schools, IGC
Rapid Response Note. Weblearn 4.2
Gordon C. Winston,1999. Subsidies, Hierarchy and Peers: The Awkward
Economics of Higher Education, Journal of Economic Perspectives, 20 (1),
pages 13-36. Weblearn 4.3
Prime Ministers Strategy Unit, 2006. School Reform: A Survey of Recent
International Experience, paper prepared for the DfES. Weblearn 4.4
Julian Le Grand, 2007. The Other Invisible Hand: Delivering Public Service
through Competition and Choice (Princeton University Press). Weblearn 4.5

Lecturer
Title

Osea Giuntella
Healthcare

Essential
Reading

Barr, as above. Chapter 1, 10.

Session 2
Tue Nov 11

Jonathan Gruber, 2013. Public Finance and Public Policy, Chapter 15,16.
Kenneth Arrow, 1963. Uncertainty and the Welfare Economics of
Healthcare, American Economic Review. 53(5), pages 941-973. WL 2.2
Is the Affordable Care Act Working?, The New York Times, October 26
2014. Weblearn 2.3

Session 3
Wed Nov 12

Further Reading

OECD, 2013. Healthcare at a Glance 2013: Highlights. (Paris OECD). WL 4.6

John List and Anya Samek, 2014. The Behavioralist as Nutritionist:
Leveraging Behavioral Economics to Improve Child Food Choice and
Consumption, NBER Working Paper No. 20132. Weblearn 4.7
Alan M. Garber and Jonathan Skinner, 2008. Is American Health Care
Uniquely Inefficient?, Journal of Economic Perspectives, 22(4) pages 27-50.
Weblearn 4.8
Mark McClellan, 2011. Reforming Payments to Healthcare Providers: The
Key to Slowing Healthcare Cost Growth While Improving Quality?, Journal of
Economic Perspectives, 25(2), pages 69-92. Weblearn 4.9
Chapin White el al, 2010. Symposium on US Health Care Reform, The
Economists Voice, 7(5). Weblearn 4.10

Lecturer
Title

Winnie Yip, Department of Public Health.

Healthcare Reform in China: Design, Effect and Challenge

Reading

Winnie Yip et al, 2012. Early appraisal of Chinas huge and complex
health-care reforms, The Lancet, 379, pages 833-842. Weblearn 4.11
Winnie Yip and William C. Hsaio, 2008. Market Watch: The Chinese Health
System at a Crossroads, Health Affairs, 27(2), pages 460468. WL 4.12

W eek 6

Designing Policy II: Jobs and W elfare

Session 1
Mon Nov 17

Lecturer
Title

Clare Leaver
Inequality and Income Transfers

Essential
Reading

Nicholas Barr, 2011. The Economics of the Welfare State (OUP, 5th Edition).
Chapters 5 and 8.
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chp 17.

Further Reading

Barr, as above. Chapter 2. (At some point, worth looking at Chp 7 and 9 too).
Shaun Hargreaves Heap et al, 1992. The Theory of Choice: A Critical Guide
(Blackwell). Chapters 18. (Links well with your Foundations course.)
Chris Belfield, Jonathan Cribb, Andrew Hood, and Robert Joyce, 2014. Living
Standards, Poverty and Inequality in the UK: 2014, IFS Report R96. WL 4.1
Vivi Alatas et al 2012. Targeting the Poor: Evidence from a
Field Experiment in Indonesia, American Economic Review, 102(4): 12061240. Weblearn 4.2
John Hills, 2011. The changing architecture of the UK welfare state, Oxford
Review of Economic Policy, 27(4), pages 589-607. Weblearn 4.3
Anthony. B. Atkinson, 1995. Incomes and the Welfare State (Cambridge
University Press). Chapter 12. Weblearn 4.4

Lecturer
Title

Clare Leaver
Enterprise and Regulation

Essential
Reading

Barr, as above. Chapter 6.

Session 2
Tue Nov 18

Richard Freeman, 2008. Labour Market Institutions Around the World, CEP
Discussion Paper No 844. Weblearn 2.1
The World Bank, 2012. World Development Report 2013. Chapter 8.
Weblearn 2.2

Session 3
Wed Nov 19

Further Reading

David Howell and Miriam Rehn, 2009. Unemployment compensation and

high unemployment: a reassessment with new benefit indicators, Oxford
Review of Economic Policy, 25(1), pages 60-93. Weblearn 4.5
Gordon Betcherman, 2012. Labor Market Institutions: A Review of the
Literature, Background Paper for World Development Report 2013.
Weblearn 4.6
Mukul G. Asher and Pundarik Mukopadhaya, 2006. An Analysis of Severance
Pay Policies in India and Sri Lanka, in Labor Market Regulation and
Deregulation in Asia: Experiences in Recent Decades, ed. Caroline Brassard
and Sarthi Acharya (Academic Foundation). Weblearn 4.7

Lecturer
Title

Andrew Dilnot, Nuffield College.

Funding of Care and Support

Reading

Commission on Funding of Care and Support, 2011. Fairer Care Funding.

Summary. Weblearn 4.8
Jeffrey R. Brown and Amy Finkelstein, 2011. Insuring Long-Term Care in the
United States, Journal of Economic Perspectives, 25(4), pages 119-142.
Weblearn 4.9
LSE Health and Social Care Annual Lecture 2011. Weblearn 4.10

Viewing

W eek 7

M aking Hard Choices

Session 1
Mon Nov 24

Lecturer
Title

Esteban Ortiz Ospina

Cost Benefit Analysis and Project Appraisal

Essential
Reading

Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter 8.
E.J. Mishan and Euston Quah, 2007. Cost Benefit Analysis (Routledge).
Part III and Chapter 36. (Read Part II too if you have time.) Weblearn 2.1
Iqbal Dhaliwal, Esther Duflo, Rachel Glennerster and Caitlin Tulloch. 2014.
Comparative cost-effectiveness analysis to inform policy in developing
countries: a general framework with applications for education in Paul Glewwe
(ed) Education Policy in Developing Countries (MIT Press). Weblearn 2.2

Session 2
Tue Nov 25

Session 3
Wed Nov 26

Further Reading

John Cullis and Peter Jones, 2009. Public Finance and Public Choice (McGrawHill 3rd Edition). Chapter 6. Weblearn 4.1
Jonathan Leape, 2006. The London congestion charge, Journal of Economic
Perspectives, 20(4), pages 157-176. Weblearn 4.2
ROCOL [Review of Charging Options for London] Working Group, 2000. Road
Charging Options for London: A Technical Assessment, (London:
HMSO). Chapter 5 Weblearn 4.3 and Annex E. Weblearn 4.4
William Nordhaus, 2007. A Review of the Stern Review on the
Economics of Climate Change, Journal of Economic Literature, XLV, pages 686702. Weblearn 4.5
Martin Weitzman, 2007. A Review of the Stern Review on the
Economics of Climate Change, Journal of Economic Literature, XLV, pages 703724. Weblearn 4.6

Lecturer
Title

Clare Leaver
Procurement and Public-Private Partnerships

Essential
Reading

Paul Grout and Margaret Stevens, 2003. The Assessment: Financing and
Managing Public Services, Oxford Review of Economic Policy, 19(2), pages
215-234. Weblearn 2.3
Eduardo Engel et al, 2010. The economics of infrastructure finance: PublicPrivate Partnerships versus Public Provision, EIB Papers, 15(1), pages 40-69.
Weblearn 2.4
Antonio Estache, 2010, Infrastructure finance in developing countries: An
overview, EIB Papers, 15(2), 60-88. Weblearn 2.5

Further Reading

Viewing

Bent Flyvbjerg, 2009. Survival of the unfittest: why the worst infrastructure
gets built and what we can do about it, Oxford Review of Economic Policy,
25(3) pages 344-367. Weblearn 4.7
ROCOL [Review of Charging Options for London] Working Group, 2000. Road
Charging Options for London: A Technical Assessment, (London:
HMSO). Chapter 6, Section 6.3. Weblearn 4.8
Tim Jenkinson, 2003. Private Finance, Oxford Review of Economic Policy,
19(2), pages 323-334. Weblearn 4.9
PFI Evidence to the HM Treasury Select Committee. Weblearn 4.10

Lecturer
Title

Paul Klemperer, Department of Economics.

Auctions for Public Policy

Reading

Paul Klemperer, 2004. Auctions: Theory and Practice. Chapter 1 (Sections 1.11.4) and Parts C and D. Weblearn 4.11

W eek 8

Implementing Policy

Session 1
Mon Dec 1

Lecturer
Title

Clare Leaver
Capture and Corruption

Essential
Reading

Avinash Dixit, 1996. The Making of Economic Policy: A Transaction-Cost

Politics Perspective (MIT Press). Chp 1 and 2 Section 2.1-2.2 (try to read
Chapter 3 when time allows!). Weblearn 2.1
Ernesto Dal Bo, 2006. Regulatory Capture: a Review, Oxford Review of
Economic Policy, 22(2), pages 203-225. Weblearn 2.2
Jonathan Gruber, 2013. Public Finance and Public Policy, (Worth). Chapter 9,
Section 9.4.

Further Reading

Benjamin Olken and Rohini Pande, 2012. Corruption in Developing

Countries, Annual Review of Economics, 4, pages 479-509. Weblearn 4.1
Jakob Svensson, 2005. Eight questions about corruption, Journal of
Economic Perspectives, 19(3), pages 19-42 Weblearn 4.2
Dieter Helm, 2010. Government failure, rent seeking, and capture: the
design of climate change policy, Oxford Review of Economic Policy, 26(2),
pages 182-196. Weblearn 4.3
James Q. Wilson, 1989. Bureaucracy: What Government Agencies Do and
Why They Do it (Basic Books). Weblearn 4.4
Tim Besley, 2006. Principled Agents? The Political Economy of Good
Government (OUP). Chapter 1 and Chapter 2 Section 2.1-2.6. Weblearn 4.5

Lecturer
Title

Clare Leaver
Institutional Responses

Essential
Reading

Dixit, as above. Chapter 2 Section 2.3-2.4 and Chapter 4.

Further Reading

Christopher Crowe and Ellen Meade, 2007. The Evolution of Central Bank
Governance Around the World, Journal of Economic Perspectives,21(4),
pages 69-90. Weblearn 4.6
Pranab Bardhan, 2002. Decentralization of Governance and
Development, Journal of Economic Perspectives, 16(4), pages 185-205.
Weblearn 4.7
Torsten Persson and Guido Tabellini, 2000. Political Economics (MIT Press),
Chapter 17. Weblearn 4.8
Tim Besley, 2006. Principled Agents? The Political Economy of Good
Government (OUP). Chapter 2 Section 2.7, Chapter 3 Section 3.5 and
Chapter 4 Section 4.5-4.9.

Lecturer
Title

Paul Collier
Agency and Administration

Reading

Ritva Reinikka and Jakob Svensson, 2010. Working For God? Evidence from
a Change In Financing of Nonprofit Health Care Providers In Uganda, Journal
of the European Economic Association, 8(6), pages 1159-1178. WL 4.9
George Akerlof and Rachel Kranton, 2010. Identity Economics, (Princeton
University Press). It is a short popular book: you can either skim it Weblearn
4.10 or see Akerlof talk about it on YOU TUBE. Weblearn 4.11

Session 2
Tue Dec 2

Session 3
Wed Dec 3

Viewing

Appendix Sections and Seminar Groups

Section 1 38 (4 groups of 6, 2 groups of 7)
Group 1 Jacobus Cilliers
Clay Aldern
Sangjung Ha
Vinicius Lindoso
Amina Tarraf
Ahmet Yildirim
Man Wa Yip

Group 2 Osea Giuntella

Bushra Al-Maskari
Mohamed AlQadhi
Vivian Grassi Sampalo
Eric Lee
Mariana de Alemeida Salles
Yannick Spencer

Group 3 Julien Labonne

Angela Anzola
Cellou Bah
Pit Ming Chiu
Diana Dajer
Eleanor Gardner
Melody Gu
Yan Yu

Group 4 Esteban O-O

Kwasi Aggor
Sondos Asem Shalaby
Ales Charniakovich
Sarah Kemeny
Juan Ortiz Freuler
Alexandra Readhead

Group 5 Lorenzo Rotunno

Lalita Kapur
Rubeena Mahato
Urmila Pullat
Mubeen Shakir
Jan-Tore Slettedal
Iwan Walters

Group 6 Daniela Scur

Shamma Al Mazrui
Diego Duchi Llumigusin
Andrea Garaiova
Margarita Gomez
Eun Jo
Yasumune Kano
Galymzhan Suleimenov

Section 2 37 (4 groups of 6, 2 groups of 7)
Group 7 Jacobus Cilliers
Carlos Acero
Kunda Chinku
Sarah He
Rafael Pastor
Nilufar Shukrikhudoeva
Joel Straker

Group 8 Osea Giuntella

Ouiem Chettaoui
Daniella Degado
Alia Eshaq
Minoru Hoshina
Min Lee
Martin Saven
Saumya Krishna

Group 9 Julien Labonne

Abraham Akoi
Kieran Brown
Alexander Diaz
Charlotte Lau
Chelsea Tabart
Caroline Whidden

Group 10 Esteban O-O

Padraig de Ris
Niklas Frijs-Madsen
Ahadjon Ismatov
Yeajin Yoon
Pascal Zimmer

Group 11 Lorenzo Rotunno

Alissa de Carbonnel
Jourdan Hussein
Elizabeth Kateratom
Neta Geist
Joseph Singh
Lawal Yusuf
Sergi Perez Serrano

Group 12 Daniela Scur

Ade Adenie
Felipe Alvarez
Joanne Cave
Natasha Chilundika
Anika Gray
Alexander Michie