Political Economy
Professor Tao Li
Spring 2011
Associate Professor Tao Li, Instructor
Email: taoli@szpku.edu.cn
Office: 414
Phone: 3084
Office Hours: 2-4pm Wed afternoon
Scope
This course is about scientific study of politics. Economic theories of politics
will be introduced, along with applications in Chinese politics and economic
reforms.
Goal
(1)We aim to teach students some basic analytical tools, at a level accessible
to them. (2) We aim to show them the intuitions behind the basic theories.
Teaching Methods
To further our goals, we will teach students some simple game theory notions
and applications in politics in a formal way, with the aid of class experiments.
We will also use examples, data, and class experiments to introduce some
recent applications in Chinese politics.
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Prerequisites
Some experiences in microeconomics and econometrics. Students need to
be comfortable with simple mathematical model notations and proofs. The
level will be slightly beyond that of college-level microeconomics. Nevertheless,
this course is not heavily mathematical. Most materials only require
some basic analytical skills. Prior exposure to game theory is not required.
We will teach relevant game-theory tools along the way.
Grading Policy
Grades will be based on a weighted average of the bi-weekly problem sets
(10%), class participation (30%), and final (60%).
Problem sets are designed to help you to evaluate your own progress.
You will get full credit provided that you submit problem sets on time and
show your effort.
Although it is highly recommended that people work together in order to
complete the homework assignments, equivalent reproductions of someone
else’s answers are not acceptable. Violaters will be punished and may not
be allowed to pass the course.
Students who want to pursue related academic research in the future can
choose to write a term paper instead of taking the exams. Such students
should talk to me as early as possible (in these two weeks) to seek approval
and guidance.
Textbook
Details slides will be provided to the students. There is no required textbook.
For additional readings, you may want to read standard textbooks
by Torsten Persson and Guido Tabellini (Political economics), by Nolan M
McCarty and Adam Meirowitz (Political game theory), and by Gene M.
Grossman and Elhanan Helpman (Special Interest Politics), etc.
Course Plan and Tentative Outline
1 Introduction to modern political economy.
2 Axiomatic study of politics. Social choice theory. Coalition and the
concept of core. Application in Chinese civil servant system (keju and
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contemporary exam system).
3 Collective action. Nash Equilibrium concepts, free riding and public
goods provision, coordination & equilibrium selection. Applications in
rural protest in China.
4 Spatial voting models. The size of the government. Applications to
rural election in China.
5 Rents, lobbying, and corruption. Application in higher education reforms,
housing market reforms, and stock market development in China.
6 Agenda control. Subgame Perfect Nash Equilibrium concepts. strategic
voting behavior. vote buying, and cohesion of a legislature.
7 The rationale of dictatorship. Organization of Chinese Communist
Party and its relationship to economic reforms. Democratization.
8 Information aggregation. Jury theorems. Bayesian Nash Equilibrium
concepts.
9 Organization of the government. specialization and delegation. Perfect
Bayesian Equilibrium concepts.
10 Incentives and the fiscal system. Applications in school finance reform,
and taxation reforms in China.
Political Institutions and Economic Development
Political Institutions and Economic Development
2011-2-20 23:48:00