ABOUT THE COURSE:There has been a continuous development in the theoretical discourse and practical approaches to public policy debate and analysis over the past few decades. Policy and planning are integral parts of economics, shaping both economic process and efficient economic outcomes. This course aims to develop a deeper understanding of the economics of public policy— an area that is often underdiscussed in the traditional curricula. Drawing on key principles of economics, this course will explore a broad spectrum of policy areas, including welfare, healthcare, labour markets, foreign policy, national security, climate change and environment, urbanization and immigration, and more.INTENDED AUDIENCE: Undergraduate and Post-Graduate studies, Public Policy practitioners from organisations and governmentPREREQUISITES: Intermediate microeconomics, Basic Macroeconomics

Syllabus

Week 1:

Introduction
What is public policy and what is the “economics” of public policy?
Social-Economic-Political Structure of public policy and linkages
Why is economics of public policy to be understood: CostBenefit Analysis
Policy making process, agenda and priority setting, agenda

Week 2:

Elements of microeconomies in public policy
Elements of macroeconomies in public policy
10 Principles of economics and its relations to public policy
Economic methods, tools and techniques in understanding problems for designing public policy

Week 3:

Public policy as a “commodity”
Public policy: Demand, supply and equilibrium
Price determination in public policy
Elasticity
Utility, constraint and optimisation

Week 4:

Efficiency, equity and equilibrium
Role of Market
Consumer surplus
Producer surplus
Taxation and its implication on equilibrium
Deadweight loss

Week 5:

Market failure
Externality and its types
Negative production externality
Negative consumption externality

Week 6:

Positive production externality
Positive consumption externality
Deadweight loss, externality and welfare

Week 7:

Internalizing and institutionalising the externality: Introduction to Coase theorem
Private sector solution
Public sector solution

Week 8:

Public goods and private goods
Club Good and Common Resources
Coase theorem and tragedy of commons
Arrow’s impossibility theorem
Median voter’s theorem
Some policy examples: pollution control, energy, water markets, forest management, etc.

Week 9:

Probability in prediction
Information Asymmetry
Uncertainty and expected utility
Adverse selection and Moral hazard
Insurance, Premium and Probability
Some policy examples: Some policies on insurance (Crop, health, life, accident etc.)

Week 10: