Rational choice theory

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Political conflicts, democratic institutions, public policy and foreign policy

Course leader: 
Live dates: 
Thursday, 1 October 2020 to Sunday, 31 January 2021
Live meetings: 
Joi la 12.00 (România).

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Aims and scope: 

This course deals with positive political economy and rational choice theory applied to the study of political conflicts, democratic institutions and public policy. The course covers the main tools for the study of public choice (rational decision theory, game theory, social choice theory) as well as a number of theoretical and applied topics, including the empirical study of institutions. This course will cover the main topics of positive political economy and institutional public choice. These include: aggregation of preferences; paradoxes and voting cycles; electoral competition and electoral behavior; collective action problems and their solutions; welfare state and redistribution; the impact of information and media on voting behavior and public policy; coalition theory, behavior of parliamentary committees and legislatures, including agenda setting and veto power; principal-agent issues in politics; the domestic bases of foreign policy.

The course is addressed to students of political science and international relations who already have a certain background of political economy, political institutions and public policy. The conversational style of the courses is superb for presenting rational choice theory to tomorrow's political analysts. The course is designed to provide students with a solid conceptual understanding of the subject using modern positive methods and theories. It differs from all other introductory courses by encouraging students to apply these positive theories to explaining current phenomena with a direct impact on their daily lives. At the end of the semester, students should be able to understand how positive political theories help us understand current issues such as the success of extremist parties, conflicts between presidents, governments, parliaments and courts, the power of interest groups, and the negotiation of international treaties.

Students are introduced to research through seminar questions about important current issues. They learn by researching these questions independently, reading colleagues' answers, critically evaluating these answers through a five-star vote, posting their own answers, and receiving peer review. A point system measures learning progress and encourages students to participate.
INTRODUCTION: 1. Falsifiability and the scientific method. 2. The concept of rationality. Decision theory and game theory. Rational choice, social choice and Public Choice. 3. Basic interests, personal circumstances and political preferences. Politicians' motivation: office, policy or votes? PREFERENCE AGGREGATION: 4. Left and right. Spatial models of voting. Electoral competition and strategic behaviour. The median voter theorem. 5. The success of extremist parties, proximity and directional voting. 6. Multidimensionality, paradoxes and voting cycles. Chaos theorems. Agenda setting. The empirical measurement of preferences. COLLECTIVE ACTION: 7. Political parties, interest groups and the logic of collective action. Elections, rational abstention and the paradox of voting. Lobbying and electoral campaigns as bribery, signaling, and the subsidisation of bias. 8. Club theory. The Exit-Voice-Loyalty (EVL) game. Voting with the feet. Secession. INSTITUTIONS AND POLICY MAKING: 9. Legislative procedure. Veto power. Agenda-setting power. 10. Parliamentary organisation. The power of parliamentary committees. Distributive and informational theories. 11. Executive and judicial power. The principal-agent problem, delegation and control. Models of bureaucracy. PUBLIC POLICY AND FOREIGN POLICY: 12. Social and economic policy. Redistribution of income. Public goods. Inflation and unemployment. The political business cycle: opportunistic and partisan cycles. 13. Selectorate theory and international politics. The selectorate. Winning coalition. Loyalty rule. SOCIAL CHOICE AND CONSTITUTIONAL POLITICAL ECONOMY: 14. Majority rules. Coalitions. Power indices. Power and luck. I-power and p-power. Justice, social welfare and the square-root rule. Internal and external costs of decision making and an optimal majority rule.
Indicative reading: 
K A Shepsle, Analyzing Politics: Rationality, Behavior, and Instititutions. Suplimentary reading: P Dunleavy, Democracy, Bureaucracy and Public Choice; D Mueller, Public Choice III; G Tsebelis, Veto Players. Great works: A Downs, An Economic Theory of Democracy; M Olson, The Logic of Collective Action; W Niskanen, Bureaucracy and Representative Government.
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