Political Economy

Undergraduate course

School of Economics, Shandong University

Instructor: Chicheng MA

Email:macc@sdu.edu.cn

Office hours: by appointment

Course Description:

This course introduces both classical and new topics of political economy. The topics cover institutions, legal system, corruption, government and officials, war and conflict, terrorism and ethnic violence, and reform, among others. The principal aim of the course is to broaden and cultivate the intellectual interests of students in the field of political economy.

Class Format:

Classes will be run in the forms of lectures and seminars. By seminars students are required to read the assigned materials before coming to class and to participate actively in class discussions.

Course Materials:

There is no textbook for this course. The lectures will be based on a variety of book chapters and articles pertinent to political economy, which are shown in the following Topics and Readings. The materials with *’s are required to read, while those without *’s give those of you interested in the topics an opportunity to dig deeper. The photocopies of the readings will be uploaded to the course website (www.course.sdu.edu.cn) as well as be sent to you by emails before each class.

Assessment:

The final grade is a combination of class participation (20%), précis (30%), and a final exam (50%).

Class Participation. It composes two parts. One is students’ performance in either raising questions or discussion in the class. The other is students’ presentations of their review report of the assigned articles, which will be held in the mid and the end of the semester, respectively. The specific instruction of the presentation will be announced later.

Précis. Each student will submit two précis during the semester. A précis refers to a summary that contains the essential details about theory, method, findings, and your own comments of an article in the reading list. For each article, a 2-page, single-spaced report usually suffices. The articles to be reviewed will be assigned later.

Final Exam. The questions will be based upon the required (with *’s) course materials.

Topics and Readings:

1. Introduction to Political Economy (February 27)

Besley, Tim. “The New Political Economy.”The Economic Journal, 117 (524).

Weingast, Barry R., and Donald A.Wittman, 2006. “The Reach of Political Economy.” InThe Oxford Handbook of Political Economy, edited by Barry R. Weingast and Donald A. Wittman,Oxford: Oxford University Press.

2. Institutions and Development(March 6 & 13)

*North, Douglass C. 1990.Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press. (pp. 3-11)

*Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2004. “Institutions as the Fundamental Cause of Long-Run Growth.” NBER Working Paper 10481. (pp. 1-2, 11-28)

Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2002. “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.”Quarterly Journal of Economics. 107(4).

3. The Origin and Persistence of Institutions (March 20 & 27)

*Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2004. “Institutions as the Fundamental Cause of Long-Run Growth.” NBER Working Paper 10481. (pp. 29-37, 61-72)

Acemoglu, Daron, Simon Johnson, and James A. Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.”American Economic Review, 91(5).

Sokoloff, Kenneth L. and Stanley L. Engerman. 2000. “History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World.”Journal of Economic Perspectives, 14(3).

4. The Path of Political Development(April 3)

*North, Douglass C., John Joseph Wallis, and Barry R. Weingast. 2009.Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press. (pp. 1-2, 13-29)

Acemoglu, Daron, and James A. Robinson. 2005.Economic Origins of Dictatorship and Democracy.Cambridge: Cambridge University Press. (pp. 1-14, 30-42 of Chapters 1 and 2)

Acemoglu, Daron, Simon Johnson, James A. Robinson, and Pierre Yared. 2008. “Income and Democracy.”American Economic Review, 98 (3).

Lipset, Seymour M. 1959. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.”American Political Science Review, 53(1).

5. Legal System (April 10)

*La Porta, Rafael, Florencio Lopez-de-Silanes, and Andrei Shleifer. 2008. “The Economic Consequences of Legal Origins.”Journal of Economic Literature. 46 (2). (pp. 285-291, 326-327)

Glaeser, Edward L. and Andrei Shleifer, 2002. “Legal Origins.”Quarterly Journal of Economics. 117 (4).

Posner, Eric A.Law and Social Norms. Harvard University Press.

Miguel, Edward, and Raymond Fisman. 2007. “Corruption, Norms and Legal Enforcement: Evidence from Diplomatic Parking Tickets.”Journal of Political Economy, 115(6).

6. Political Connections and Corruption (April 17)

*Mara Faccio. 2006. “Politically Connected Firms.”American Economic Review, 96(1). (pp. 369-373)

*Li, Hongbin, Lingsheng Meng, and Junsen Zhang. 2006. “Why Do Entrepreneurs Enter Politics? Evidence from China.” Economic Inquiry, 44(3). (pp.559-566)

*Treisman, Daniel. 2000. “The Causes of Corruption: A Cross-National Study.”Journal of Public Economics. 76. (pp. 399-407, 437-442)

Li, Hongbin, Lingsheng Meng, Qian Wang, and Li-An Zhou. 2008. “Political Connections, Financing and Firm Performance: Evidence from Chinese Private Firms.”Journal of Development Economics, 87.

Shleifer, Andrei, and Robert W. Vishny. 1994. “Politicians and Firms.”Quarterly Journal of Economics, 109(4).

Shleifer, Andrei and Robert Vishny. 1993. “Corruption.”Quarterly Journal of Economics, 108 (3).

Mauro, Paulo. 1995. “Corruption and Growth.”Quarterly Journal of Economics. 110(30).

Fisman, Ray. 2001. “Estimating the Value of Political Connections.”American Economic Review, 91.

7. State, Government, and Officials (April 24 and/or 28)

*Besley, Tim, and Torsten Persson. 2010. “State Capacity, Conflict, and Development.”Econometrica, 78(1). (pp. 1-4)

*Porta, Rafael La, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny. 1999. “The Quality of Government.”Journal of Law, Economics & Organization, 15(1). (pp.222-234, 265-266)

*Li, Hongbin, and Li-An Zhou. 2005. “Political Turnover and Economic Performance: The Incentive Role of Personnel Control in China.”Journal of Public Economics, 89. (pp. 1743-1747, 1760-1761)

Bates, Robert H. 2006. “The Role of the State in Development.” InThe Oxford Handbook of Political Economy, edited by Barry R. Weingast and Donald A. Wittman,Oxford: Oxford University Press.

8. War and Conflict (May 8 & 15)

*Blattman, Christopher and Edward Miguel.2010. “Civil War.”Journal of Economic Literature. 48(1). (pp.1-22, 37-44)

Bai, Ying, and James Kung. 2011. “Climate Shocks and Sino-nomadic Conflict.”Review of Economics and Statistics, 93(3).

Kung, James, and Chicheng Ma. 2012. “Can Cultural Norm Reduce Conflicts? Confucianism and Peasant Rebellions in Qing China.” Working paper.

Student Presentation 1 (May 22)

9. Terrorism and Ethnic Violence (May 29)

*Krueger, Alan B., and Jitka Maleckova. 2003. “Education, Poverty and Terrorism: Is There A Causal Connection?”Journal of Economic Perspectives, 17(4). (pp.119-123, 141-142)

*Reynal-Querol, Marta, J. G. Montalvo. 2005. “Ethnic Polarization, Potential Conflict, and Civil War.”American Economic Review, 95(3). (pp.796-797, 811-812)

Gould, Eric D., and Esteban F. Klor. “Does Terrorism Work?”Quarterly Journal of Economics, 125(4). (pp. 1459-1463, 1507-1508)

Abadie, Alberto. 2005. “Poverty, Political Freedom, and the Roots of Terrorism.”American Economic Review, 95(4).

Fearon, James D., and David D. Laitin. 2003. “Ethnicity, Insurgency, and Civil War.”American Political Science Review, 97(1).

Voigtlander, Nico, and Hans-Joachim Voth. 2012. “Persecution Perpetuated: The Medieval Origins of Anti-semitic Violence in Nazi Germany.”Quarterly Journal of Economics, 127(3).

10. Reform (June 5 & 9)

*Acemoglu, Daron, Davide Cantoni, Simon Johnson, and James A. Robinson. 2011. “The Consequences of Radical Reform: The French Revolution.”American Economic Review, 101(7). (pp.3286-3295)

*Xu, Chenggang. 2011. “The Fundamental Institutions of China’s Reforms and Development.”Journal of Economic Literature, 49(4).(pp.1076-1098, 1139-1144)

*Lin, Justin Yifu, 1992. “Rural Reforms and Agricultural Growth in China.” American Economic Review, 82(1). (pp. 34-39, 47-50)

Roland, Gérard. 2000.Transition and Economics: Politics, Markets and Firms. MIT Press.

Student Presentation 2 (June 19)

(Skip the mathematical models and econometric issues in above literature)