Political Economy


This course offers a comprehensive overview of the field of political economics. We will introduce game theoretic models that will be used to understand how politicians’ motivations affect public-policy decisions. The course will start with the introduction to the toolbox of political economics. It will then apply these tools to important topics in political economy: redistribution, comparative politics, and debt.  In the second part of the course, particular emphasis will be given to the interaction between political incentives and macroeconomic policies.


  1. Tools of political economics (Electoral competition, Agency Models of Election, Partisan Politicians, Legislative Bargaining, Probabilistic Voting, Interest-groups)
  2. Redistributive politics and Public Good Provision (Median Voter Models, Divide the dollar game)
  3. Comparative Politics (Electoral Rules and Electoral Competition)
  4. Dynamic Political Economy (Fiscal and Monetary Policy, Government Debt, Legal and Fiscal Capacity, Welfare State Dynamics)


  • Acemoglu D. and J. Robinson, 2006. Economic origins of dictatorship and democracy. Cambridge University Press.
  • Austen-Smith David and Jeffrey Banks 2005 Positive Political Theory I and II University of Michigan Press
  • Besley, T., 2006. Principled Agents Oxford University Press.
  • Besley, T and T. Persson, 2011. Pillars of Prosperity. Princeton University Press.
  •  Grossman G. and E. Helpman, 2001. Special interest politics. MIT Press
  • Drazen, A., 2000. Political Economy in Macroeconomics. Princeton University Press.
  • Persson, T. and G. Tabellini, 2000. Political Economics: Explaining Economic Policy. MIT Press.
  • Persson, T. and G. Tabellini, 2003. The economic effects of constitutions. MIT Press.