Description
How can politics solve collective action problems? Why do some policies fail? The economic analysis of politics, also known as public choice or political economy, presents a coherent analytical framework to tackle these puzzling questions. It starts with the observation that individual motivation in politics is not fundamentally different from the motivation of market participants. Therefore, economists can apply their analytical tools to analyze the behavior of political actors. With the rise of behavioral economics, economists have started to apply models of bounded rationality to the study of political processes. This course will cover the standard rational choice approach and end with a discussion of current research topics in behavioral political economy. The course comprises four parts: (I) normative foundations (ethical theories, collective goals, Pareto concepts); (II) social dilemmas (externalities, coordination failure, commitment problem); (III) possibilities and constraints