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The Economics of Public Choice

* Exchange students do not have to consider this information when selecting suitable courses for an exchange stay.

Course Unit Code114-0342/01
Number of ECTS Credits Allocated4 ECTS credits
Type of Course Unit *Choice-compulsory type B
Level of Course Unit *Second Cycle
Year of Study *First Year
Semester when the Course Unit is deliveredWinter Semester
Mode of DeliveryFace-to-face
Language of InstructionCzech
Prerequisites and Co-Requisites There are no prerequisites or co-requisites for this course unit
Name of Lecturer(s)Personal IDName
JAW127doc. Ing. Jan Janků, Ph.D.
Summary
The course is aimed at providing a basic overview of the problems of public choice theory. The course includes an analysis of voting behavior, the behavior of elected representatives, interest groups, and bureaucracy.
The course uses a rational choice model and the actors in political markets are
are understood as traditional "buyers" or "sellers", thus the course favours an economic way of thinking about political markets. The economic way of thinking about political markets and collective action allows us to analyse political and other collective institutions and also to assess the appropriateness of the settings of these institutions. The course thus partly covers the field of constitutional and institutional economics. The course also provides basic and key insights into economic policymaking in representative democracies, taking into account the rational actor model. Thus, it also deals with the inferior effects of implemented economic policies. Graduates of the course should be able to apply economic reasoning in a non-market environment and in a political markets at an intermediate level.

Learning Outcomes of the Course Unit
- Providing a basic overview of the problems of public choice theory
- Students will be able to economically analyze voting behavior, the behavior of elected representatives, interest groups, and bureaucracies
- Students will acquire the knowledge to analyze political and other collective institutions in a basic way and will be competent to evaluate the appropriate settings for these institutions
- Students will acquire basic and key knowledge of economic policy making in representative democracies, taking into account the rational actor model
- Students will be able to describe and identify the inferior effects of inappropriately implemented economic policies
Course Contents
1) Introduction to public choice theory
- The basic foundations of public choice theory
- Schools of public choice theory

2) The role of government in the economy
- Allocative inefficiency and market failure
- Effect of government on economic activity, size and efficiency of government

3) Elections and Electoral Systems (I)
- Classical, non-classical and economic theories of democracy
- Rational Choice Theory in public choice, rational ignorance and rational irrationality

4) Elections and Electoral Systems (II)
- Social Choice Theory in Public Choice
- Voting rules and alternative decision-making mechanisms

5) Political-economic cycle
- Political-economic cycles and their macroeconomic consequences

6) Political-budget cycle
- Political-budget cycles, inferior effects of budget deficits and government debt

7) Lobbying, interest groups and rent-seeking
- Lobbying and interest groups, the logic of collective action
- Politics as a mode of redistribution, economic theory of regulation

8) Theory of Bureaucracy
- Traditional and economic theory of bureaucracy
- Rational behaviour of bureaucracy, legislative control of bureaucracy

9) Constitutional political economy
- Social contracts
- Constitutional reforms
- Institutional economics - basics

10) Alternative approaches to the role of the state (I)
- Dictatorship and democracy

11) Alternative Approaches to the Role of the State (II)
- The Austrian School and anarcho-capitalism

12) Behavioral to public choice theory
- Behavioral approaches, the role of irrationality in public policy making

13-14) Experimental approaches to the study of public choice
- Experiment (Economic Classroom Experiment)
Recommended or Required Reading
Required Reading:
HILLMAN, Arye L. Public finance and public policy: responsibilities and limitations of government. 2nd ed. New York: Cambridge University Press, 2009. ISBN 978-0521738057.
SATIS KUMAR, Jain. 2022. Social Choice Theory: An Introductory Text (Springer Texts in Business and Economics). New York: Springer, 2022. ISBN 978-9811696602.
SELF, Peter. 2021. Government By The Market? The Politics Of Public Choice. London, Routledge, 2021. ISBN 978-0333569733.
BUCHANAN, James M. Veřejné finance v demokratickém systému. Praha: Computer Press, 1998. ISBN 8072261169.
CAPLAN, Bryan Douglas. 2010. Mýtus racionálního voliče: proč v demokracii vítězí špatná politika. Praha: NLN, Nakladatelství Lidové noviny, 2010. ISBN 978-80-7422-056-2.
GREGOR, Martin. 2005. Nová politická ekonomie. Praha: Karolinum, 2005. ISBN 80-246-1066-3.
HILLMAN, Arye L. Public finance and public policy: responsibilities and limitations of government. 2nd ed. New York: Cambridge University Press, 2009. ISBN 978-0521738057.
Recommended Reading:
PERSSON, Torsten a Guido TABELLINI. 2000. Political Economics: Explaining Economic Policy. Cambridge, Mass.: MIT Press, 2000. ISBN 0-262-16195-8.
MIKUŠOVÁ MERIČKOVÁ, Beáta a Jan STEJSKAL. 2014. Teorie a praxe veřejné ekonomiky. Praha: Wolters Kluwer, 2014. ISBN 978-80-7478-526-9.
OCHRANA, František. Veřejná volba a řízení veřejných výdajů. Praha: Ekopress, 2003. ISBN 8086119718.
PERSSON, Torsten a Guido TABELLINI. 2000. Political Economics: Explaining Economic Policy. Cambridge, Mass.: MIT Press, 2000. ISBN 0-262-16195-8.
Planned learning activities and teaching methods
Lectures, Seminars
Assesment methods and criteria
Task TitleTask TypeMaximum Number of Points
(Act. for Subtasks)
Minimum Number of Points for Task Passing
Credit and ExaminationCredit and Examination100 (100)51
        CreditCredit30 18
        ExaminationExamination70 21