Discipline Specific Elective 6 (DSE-6): Advanced Econometrics

Semester
Duration (per week)
Course title Eligibility
Credits Prerequisite
& Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Advanced Class 12th Basic
Econometrics 4 3 1 0 with Econometrics
– ECON036 Mathematics (ECON024)

Learning Objectives

The Learning Objectives of this course are as follows:

• A prerequisite for this course is the knowledge of concepts in the Basic Econometrics course.
• It builds on the compulsory Basic Econometrics course and teaches students a broad set of
commonly used econometric methods.
• These include estimating models with limited dependent variables, the use of instrumental variables
to estimate models with endogenous regressors, as also estimation methods for time series and panel
data sets.

Learning outcomes

The Learning Outcomes of this course are as follows:

Students will learn the theoretical and practical basis for techniques widely used in empirical research and
consider their application in a wide range of estimation problems.

Syllabus

UNIT I: Stages in empirical econometric research (3 hours)

UNIT II: The linear regression model: The matrix approach, Review of model specification, estimation and
testing (6 hours)

UNIT III: Limited dependent variables: Logit and Probit models for binary responses, Tobit models for
truncated data. (9 hours)

UNIT IV: Selected Topics: Instrumental variable estimation, Simultaneous equation models, Experiments
and Quasi-Experiments. (9 hours)

UNIT V: Dynamic econometric models: distributed lag models, autoregressive models; Panel data models
and estimation techniques (9 hours)

UNIT VI: Introduction to econometric software (R/GRETL/EViews/Stata: ANY ONE); publicly available
data sets and software will be used to estimate models and apply the techniques learnt. (9 hours)

Recommended readings
• Wooldridge, J. (2014). Introduction to econometrics: A modern approach, 5th ed. Cengage
Learning.
• Asteriou, D and Hall, Stephen G, Applied Econometrics, 4th Edition, 2021, Pal- grave Macmillan.
• James Stock and Mark Watson, Introduction to Econometrics, 4th Edition, 2019, Pearson.
• Gujarati, D., Porter, D. (2012). Basic econometrics, 5th ed. McGraw-Hill.
• Gujarati, D. (2014). Econometrics by Final Examinationple, 2nd ed. Palgrave Macmillan.
• G.S. Maddala and Kajal Lahiri, Introduction to Econometrics, 4th Edition, 2012, Wiley.

27
 • Badi H. Baltagi, Econometrics, 5th Edition, 2011, Springer.
• J. Johnston and J. DiNardo (2001), Econometric Methods, Fourth Edition, Irwin Mcgraw Hill

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

28
 Discipline Specific Elective 8 (DSE-8): Economics of Health

Semester
Course Duration (per week)
Eligibility
title & Credits Prerequisite
Practical/ Criteria
Code Lecture Tutorial
Practice
V/VII Economics Introductory
of Health– 4 3 1 0 Class 12th Microeconomics
ECON038 (ECON001)

Learning Objectives

The Learning Objectives of this course are as follows:

• Health is important not only for human well-being but also for economic growth. This course
provides a framework to understand the need for the study of health economics and the relationship
of health with the GDP of a nation.
• The course also looks at the determinants of health, the demand for health and the need for
government intervention in provision of health care. Economic evaluation / health technology
assessment is also covered in the course.

Learning outcomes

The Learning Outcomes of this course are as follows:

• The students will learn the economic dimensions of health, determinants of health and
microeconomic tools for the study of health care and expenditure.
• The course will enable the students to apply the theory to understand the various policies and market
mechanisms in the field of health care. They will also be equipped with the fundamental techniques
of economic evaluation of health interventions.

Syllabus

UNIT I: Health Economics (12 hours)

Significance and linkages with the economy:
The need for health economics as a discipline of study, importance of health in the development of an
economy and its relationship with macroeconomic performance

UNIT II: Theoretical foundations of Health Economics (12 hours)

Demand for health and health care services, determinants of health, market failure and rationale for public
intervention; and health insurance

UNIT III: Economic Evaluation of Health Sector (12 hours)

Cost-effective Analysis, cost-benefit analysis, cost-utility analysis

UNIT IV: Health Systems (9 hours)

An overview of international health systems and Indian experiences, and healthcare financing

Recommended readings
• Phelps, C. E. (2017). Health economics. Routledge
• Jay Bhattacharya Timothy Hyde Peter Tu (2014), Health Economics, Palgrave Macmillan
• William, Jack. (1999) Principles of Health Economics for Developing Countries, World Bank

29
 Institute Development Studies.
• Glied, S., & Smith, P. C. (Eds.). (2013). The Oxford Handbook of Health Eco- nomics. Oxford
University Press.
• Situational Analysis: Backdrop to the National Health Policy 2017, Ministry of Health and Family
Welfare, Government of India
• Mills, A., & Hsu, J. (2014), “Health services in low-and middle-income countries: financing,
payment, and provision”, Encyclopedia of Health Economics, pp 422- 434

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

30
 Discipline Specific Elective 9 (DSE-9): Environmental Economics

Semester
Duration (per week)
Course title & Eligibility
Credits Prerequisite
Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Intermediate
Microeconomics:
Environmental
Class Market,
Economics– 4 3 1 0
12th Government and
ECON039
Welfare
(ECON010)

Learning Objectives

The Learning Objectives of this course are as follows:

• This course provides basic knowledge of environmental economics, its relationship with
microeconomics and welfare economics, to present and explains the significance and application in
the present environmental challenges.
• It aims to describe and comprehend various environmental policies by deploying various policy
instruments and to understand and measure the various market and non-market benefits of
environmental policies.
• The course addresses the problems related to climate change, transboundary environmental
problems, and challenges related to trade and the environment also.

Learning outcomes

The Learning Outcomes of this course are as follows:

The students will learn the trade-offs of economy and environment, and related challenges. They will
comprehend the role of state and institutions to minimise the trade-offs.

Syllabus

UNIT I: Introduction to Environment Economics (9 hours)

What is environmental economics? review of microeconomics and welfare eco- nomics; Overview of
environmental problems in India

UNIT II: Design and Implementation of Environmental Policy (12 hours)

Overview; Pigouvian taxes and effluent fees; tradable permits; choice between taxes and quotas under
uncertainty; implementation of environmental policy.

UNIT III: Measuring the Benefits of Environmental Improvements (12 hours)

Non-market values and measurement methods; risk assessment and perception.

UNIT IV: International Environmental Problems (12 hours)

Transboundary environmental problems; economics of climate change; trade and environment.

Recommended readings
• Charles Kolstad. Intermediate Environmental Economics, Oxford University Press, 2nd edition
(2012).
• Roger Perman, Yue Ma, James McGilvray and Michael Common. Natural Resource and
Environmental Economics, Pearson Education/Addison Wesley, 4th edition (2011).

31
 • Robert N. Stavins (ed.). Economics of the Environment: Selected Readings, W.W. Norton, 6th
edition (2012).
• Don Fullerton and Robert Stavins (1998). “How Economists See the Environment.” Nature, Vol.
395, Oct 1, 1998, pp. 433-434.
• State of Environment Report: India 2009 (Ministry of Environment and Forests, Government of
India, 2009): Chapter 2 (State and Trends of the Environment): Land. Air, Water, Biodiversity (p.
9 to 71).
• Schmalensee, Richard and Robert N. Stavins (2017). “The design of environmental markets: What
have we learned from experience with cap and trade?” Oxford Review of Economic Policy, Vol.
33, No. 4, pp. 572-588.
• Blackman, Allen, Li, Z., and Liu, A. A. (2018). “Efficacy of command-and-control and market-
based environmental regulation in developing countries,” Annual Review of Resource Economics,
Vol. 10, pp. 381-404.
• Jonathan Harris and Brian Roach (2018). Environmental and Natural Resource Economics: A
Contemporary Approach, Routledge.
• Nordhaus, William D. (2013). Climate Casino: Risk, Uncertainty, and Economics for a Warming
World, Yale University Press.
• Richard Newell, William Pizer and Daniel Raimi (2013). “Carbon markets 15 years after Kyoto:
Lessons learned, new challenges,” Journal of Economic Perspectives, Vol. 27, No. 1, pp. 123-46.
• Stern,N.(2008) The economics of climate change, American Economic Review, 98(2): 1–37.

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

32
 Discipline Specific Elective 10 (DSE-10): Gender and Development

Semester
Duration (per week)
Course title & Eligibility
Credits Prerequisite
Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Intermediate
Microeconomics
Gender and
II: Market,
Development– 4 3 1 0 Class 12th
Government
ECON040
and Welfare
(ECON010)

Learning Objectives

The Learning Objectives of this course are as follows:

• This course aims to deepen students’ understanding on the main theoretical approaches used in
gender analysis of development issues, and understanding of the differential impacts of development
interventions on women and men.
• The course aims to enable students to become familiar with the gender theories, use of these theories
to Final Examination in detail issues of production (formal and informal work), reproduction
(health, child survival, and fertility), the family/household nexus (where production and
reproduction meet), and gender biases and inequality in terms of health, education, labour and
inheritance.

Learning outcomes

The Learning Outcomes of this course are as follows:

The course aims at making students to be aware about the issues and concepts of gender and development,
importance of mainstreaming gender, gender and work relations and gender bias and inequality.

Syllabus

UNIT I: Conceptualising and theorizing gender and development (12 hours)

Concepts in gender and development studies: Distinction between gender and sex, patriarchy and matriarchy;
women in development (WID) and women and development (WAD)

UNIT II: Mainstreaming gender (12 hours)

Institutionalization of gender in growth and development, gender and bureaucracy, intra-household
bargaining, changing gender relations and gender budgeting.

UNIT III: Work and Gender Relations (Inside/Outside the House) (12 hours)
Gender dynamics within a household, bargaining models, balance of productive and reproductive roles of
women, agency, inheritance, unpaid work, marriage, and bride price.

UNIT IV: Gender and Inequality (9 hours)

Gender bias and gender inequality in terms of opportunities available: health and education, occupational
segregation and gender wage gap.

Recommended readings

33
• Anderson, S. (2007). The economics of dowry and brideprice. Journal of Economic Perspectives,
21(4), 151-174.
• Aizer, A. (2010). The gender wage gap and domestic violence. American Economic Review, 100(4),
1847-59.
• Heath, R. (2014). Women’s access to labor market opportunities, control of household resources,
and domestic violence: Evidence from Bangladesh. World Development, 57, 32-46.
• Goel, P. A., & Barua, R. (2021). Female education, marital assortative mating, and dowry:
Theory and evidence from districts of India. Journal of Demographic Economics, 1-27.
• Rai, S. M., Brown, B. D., & Ruwanpura, K. N. (2019). SDG 8: Decent work and economic growth–
A gendered analysis. World Development, 113, 368-380.
• Kantor, P. (2003). Women’s empowerment through home–based work: Evidence from India.
Development and Change, 34(3), 425-445
• Neetha, N. (2018). Migration, gender and care economy. Routledge India
• Boeri, N. (2018). Challenging the gendered entrepreneurial subject: Gender, development, and the
informal economy in India. Gender & Society, 32(2), 157-179.
• World Bank. (2011). World development report 2012: Gender equality and development. The World
Bank.
• Kabeer, N. (2003). Gender Mainstreaming in Poverty Eradication and the Millennium Development
Goals: A handbook for policy-makers and other stakeholders. Commonwealth Secretariat.
• Coles, A., Gray, L., & Momsen, J. (Eds.). (2015). The Routledge handbook of gender and
development. Routledge.
• Blakemore, J. E. O., Berenbaum, S. A., & Liben, L. S. (2013). Gender Development. Psychology
Press.
• Momsen, Janet (2020). Gender and Development. Routledge. 3rd Edition
• Moser, C. (2012). Gender Planning and Development (pp. 63-87). Routledge.
• Andrea Cornwall et al (eds): Feminisms in Development: Contradictions, Contestations and
Challenges (Zed 2007).
• Cecile Jackson & Ruth Pearson (eds.): Feminist Visions of Development: Gender Analysis and
Policy (Routledge, 1998)
• Agenor, P. R., & Canuto, O. (2015). Gender equality and economic growth in Brazil: a long-
run analysis. Journal of Macroeconomics, 43, 155-172.
• Nilsson, P. (2013). Gender and development: The challenge of mainstream. Consilience, (10), 125-
135.
• Cornwall, A., Harrison, E., & Whitehead, A. (2007). Gender myths and feminist fables: The struggle
for interpretive power in gender and development. Development and Change, 38(1), 1-20.
• Agarwal, B. (1997). ”Bargaining” and gender relations: Within and beyond the household. Feminist
economics, 3(1), 1-51.
• Doss, C. (2013). Intrahousehold bargaining and resource allocation in developing countries. The
World Bank Research Observer, 28(1), 52-78.
• Kabeer, N. (2005). Gender equality and women’s empowerment: A critical analysis of the third
millennium development goal. Gender & Development, 13(1), 13-24.
• Folbre, N. (2006). Measuring care: Gender, empowerment, and the care economy. Journal of Human
Development, 7(2), 183-199.
• Jayachandran, S. (2015). The roots of gender inequality in developing countries, Economics, 7(1),
63-88.
• Mitra, A., Bang, J. T., & Biswas, A. (2015). Gender equality and economic growth: Is it equality
of opportunity or equality of outcomes? Feminist Economics, 21(1), 110-135.
• Dercon, S., & Singh, A. (2013). From nutrition to aspirations and self-efficacy: gender bias over
time among children in four countries. World Development, 45, 31-50.
• Azam, M., & Kingdon, G. G. (2013). Are girls the fairer sex in India? Revisiting intra-household
allocation of education expenditure. World Development, 42, 143- 164.
• Nguyen, C. P. (2021). Gender equality and economic complexity. Economic Systems, 45(4),
100921.
• Jayachandran, S., & Pande, R. (2017). Why are Indian children so short? The role of birth order
and son preference. American Economic Review, 107(9), 2600-2629.

34
 • Barcellos, S. H., Carvalho, L. S., & Lleras-Muney, A. (2014). Child gender and parental
investments in India: Are boys and girls treated differently?. American Economic Journal: Applied
Economics, 6(1), 157-89.
• Joy, L. (2000). Do colleges shortchange women? Gender differences in the transition from college
to work. American Economic Review, 90(2), 471-475.
• Mbaye, L. M., & Wagner, N. (2017). Bride price and fertility decisions: Evidence from rural
Senegal. The Journal of Development Studies, 53(6), 891-910.
• Babcock, L., Recalde, M. P., Vesterlund, L., & Weingart, L. (2017). Gender differences in accepting
and receiving requests for tasks with low promotability. American Economic Review, 107(3), 714-
47.
• Pande, R. (2015). ‘I arranged my own marriage’: arranged marriages and post-colonial feminism.
Gender, Place & Culture, 22(2), 172-187.
• Bertrand, M., & Mullainathan, S. (2004). Are Emily and Greg more employable than Lakisha and
Jamal? A field experiment on labor market discrimination. American economic review, 94(4), 991-
1013.
• Duraisamy, M., & Duraisamy, P. (2016). Gender wage gap across the wage distribution in different
segments of the Indian labour market, 1983–2012: exploring the glass ceiling or sticky floor
phenomenon. Applied Economics, 48(43), 4098-4111.
• LEE, Jong-Wha; Wie, Dainn (2017). Wage Structure and Gender Earnings Differentials in China
and India. World Development, 97, 313–329

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

35
 Discipline Specific Elective 11 (DSE-11): Law and Economics

Semester
Duration (per week)
Course title Eligibility
Credits Prerequisite
& Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Intermediate
Law and Microeconomics
Economics Class II: Market,
4 3 1 0
– 12th Government
ECON041 and Welfare -
ECON010

Learning Objectives

The Learning Objectives of this course are as follows:

• Law and Economics is an interdisciplinary course, devoted to understanding laws and legal
institutions using the tools of economic theory.
• This is essentially an economic analysis of the laws.
• Topics include an introduction to legal institutions and legal analysis, application of economic
concepts to the law of property, contracts, torts and criminal law and anti-trust law.

Learning outcomes

The Learning Outcomes of this course are as follows:

This course is designed to gain familiarity with basic facts and application of economic principles to analyse
a wide range of legal issues, and better understanding the economic consequences of laws and regulations.

Syllabus

UNIT I: Concepts of Law and uses of foundations of Economics (6 hours)

Tools for Law and Economics: Efficiency criteria in Welfare Economics; Coase theorem; Prisoners’
Dilemma

UNIT II: Economics of Tort (Accident) Law/ Liability Rules (6 hours)

Liability for accidents and harms; product liability; efficiency of liability rules; efficiency-compensation
trade-off.

UNIT III: Economics of Property Law (6 hours)

Property rights and their role in resource allocation; Coase theorem; Legal remedies for breach of property
rights and their economic effects, Eminent Domain (Market and non-market mechanism for land transfer)

UNIT IV: Intellectual Property Rights (IPRs) (6 hours)

Patents, Copyright and Trademarks. Cost and benefits of private IPRs; Individual rights vs common good

UNIT V: Economics of Contract Law (6 hours)

Legal contract; Role of Contracts for functioning of markets; Incomplete contracts; Efficient contracts;
Damages measures and their efficiency properties.

UNIT VI: Economics of Criminal Law (6 hours)

Economics of Crime and Law Enforcement; Crime Vs Tort; Repeat Offenders; Death Penalty

UNIT VII: Anti-trust laws, Competition Policy (3 hours)

36
UNIT VIII: Legal Process (6 hours)
Litigation – its causes and consequences; Benefits of legal certainty

Recommended readings
• Miceli, Thomas J. , "The Economic Approach to Law" 3rd Edition Stanford University Press, 2017
(Indian edition, MPP House, 2020)
• Cooter, Robert and Thomas Ulen, Law and Economics, Sixth Edition, Addison Wesley 2013,
ISBN 9780132540650. Free here Law and Economics, 6th edition (jku.at)
• Pal, Malabika, Economic Analysis of Tort Law - The Negligence Determination. Routledge, 2020.
• Bag, Sugata, Economic Analysis of Contract Law: Incomplete Contracts and Asymmetric
Information. Springer/Palgrave, 2018.
• Basu, Kaushik, The Republic of Beliefs: A New Approach to Law and Economics, Princeton
University Press, 2018
• Singh, Ram (2021) Land for Development: Market Versus Non-Market Mechanisms in S.Mani and
C.G. Iyer (eds.) India's Economy and Society, Springer, pp.187-204.
• Bhattacharjea, Aditya. "Competition policy: India and the WTO." Economic and Political Weekly
(2001): 4710-4713.
• Competition Commission of India, Competition Act of India 2002, https : //www.cci.gov.in/sites/

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

37
 Discipline Specific Elective 12 (DSE-12): Open Economy

Semester
Duration (per week)
Course title Eligibility
Credits Prerequisite
& Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Open
Intermediate
Economy
Class Macroecono
Macroecono 4 3 1 0
12th mics II
mics –
(ECON011)
ECON042

Learning Objectives

The Learning Objectives of this course are as follows:

• The course is designed with the objective of introducing the students to the standard macroeconomic
issues in an open economy framework using the Mundell-Fleming model and the exchange rate
overshooting model.
• It further exposes them to the models of banking and currency crises which try to make sense of the
risks and vulnerabilities in an interdependent economy.
• The course would give an exposure to contemporary concerns in the global economy and the
challenges it poses to policy making.

Learning outcomes

The Learning Outcomes of this course are as follows:

• The student would get a good exposure towards the process of macroeconomic policy- making in
an open economy and the challenges involved.
• The course would facilitate learning the art of building macro-models in an open economy context.
It would also enable the student to relate it to the contemporary issues.
• The student would learn to appreciate contemporary issues by relating the real world data to the
theory in this regard.

Syllabus

UNIT I: Introduction to Open Economy Macroeconomics (10 hours)

Intertemporal long run budget constraint, how much can a country borrow, external wealth, external assets
and liabilities, net international investment position, financial flows and valuation effects, Feldstein Horioka
Puzzle, Harberger-Laursen- Metzler effect, Foreign Exchange Market. An overview of the spot and forward
markets, swaps, options and derivatives. Uncovered and Covered Interest Parity. Covered Interest Arbitrage.

UNIT II: Macro-modelling of the Open Economy (20 hours)

Mundell-Fleming model (with Flexible Prices). Dornbusch’s exchange rate overshooting model with
stability conditions. Monetary Approach to Balance of Payments. PPP and long run monetary approach,
Balassa –Samuleson effect and non-tradables, Fisher effect. Portfolio and macroeconomic equilibrium in an
open economy. 3 equation model for the open economy. Currency crises (first, second and third generation
models). Optimum currency areas and monetary union.

UNIT III: International Monetary System and Policy Co-ordination (15 hours)
Classic specie price flow mechanism and the Gold Standard. Fixed exchange rate system under Bretton
Woods. Triffin dilemma and the collapse of the Bretton Woods, SDRs, international consistency
condition. Financial trilemma. International liquidity and demand for international reserves. Government
policies to- wards capital market, exchange and capital controls. Central bank intervention, sterilization.

38
Prospects of Macroeconomic policy co-ordination in an open economy, Policy reaction function, Hamada
diagram

Recommended readings
• Feenstra, Robert and Taylor, Alan (2020) International Macroeconomics, 3rd ed., Worth Publishers
• Feenstra, Robert and Taylor, Alan (2014) International Economics, 3rd ed., Worth Publishers
• Pugel, T International Economics, 16th ed., McGraw-Hill Education
• Gandolfo, Giancarlo (2016) International Finance and Open Economy Macroeconomics, Springer.
• Krugman, P., Obstfeld, M. and Melitz (2018) International Economics - Theory and Policy, 11th
ed., Pearson Education.
• Carlin, Wendy and Soskice, David (2015) Macroeconomics: Institutions, Instability and the
Financial System
• Wickens, Michael(2012) Macroeconomic Theory. Princeton University Press.
• Sorenson, Peter B and Whitta-Jacobson, Hans Jorgen(2010) Introducing Advanced
Macroeconomics: Growth and Business Cycles. McGraw Hill Education

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

39
 Discipline Specific Elective 13 (DSE-13): Modern Political
Economy

Semester
Duration (per week)
Course title Eligibility
Credits Prerequisite
& Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Intermediate
Microecono
Modern
mics II:
Political Class
4 3 1 0 Market,
Economy – 12th
Government
ECON043
and Welfare
(ECON010)

Learning Objectives

The Learning Objectives of this course are as follows:

• This course will use the methodology and tools of economics to study the implications of various
political institutions and processes that determine the quantum, scope, and nature of the state’s
intervention in the economy.
• Political actors are assumed to be goal-oriented and political outcomes are explained by the
interaction between these actors within their institutional environment.
• This course will complement the Public Economics course as its focus will be on the positive
implications of the state’s interventions rather than the normative aspects.

Learning outcomes

The Learning Outcomes of this course are as follows:

• The students will learn to apply the economic paradigm to the study of political action and policy
formation, and how economic and political forces may shape the incentives and constraints of
policymakers and other political actors.
• They will understand the role of political institutions in shaping the actions of the state and the
resulting outcomes.

Syllabus

UNIT I: Collective choice and redistribution (12 hours)

Insurance motive; public good motive; fairness motive; allocative efficiency; determination of redistribution,
Majority voting and direct democracy; unanimity rule; Con- direct cycles; one dimensional median voter
theorem; multidimensional issues and median voter theorem; agenda manipulation; simple variations of
majority voting such as the Borda rule and approval voting

UNIT II: Representative democracy: two-party competition; and multi-party competition (12 hours)
Downsian model; deterministic voting; cycles and median voter theorems; competition in a constrained
policy space; uncovered set and valence values; model with probabilistic voting model and an application to
taxation, proportionality, and electoral rules; goals of multiple parties; coalition formation with one-
dimensional issue space; coalition formation with multi-dimensional issue space; strategic voting.

UNIT III: Rent-seeking; Tariffs and Political economy of taxation (12 hours)
Basic model of rent-seeking and variations; rent-seeking via regulation; effects of tariffs, quotas, and
voluntary export restraints; corruption, Distortions, and Diamond-Mirrlees production efficiency theorem.

40
UNIT IV: Dictatorship; origins and Lobbying (9 hours)
Model of public goods provisioning; Win- Trobe’s model, Interest groups, lobbying, and collective action;
Olsonian model of collective action; Downsian models

Recommended readings
• K. Shepsle and M. Bonchek (1997), Analyzing Politics: Rationality, Behavior, and Institutions, W.
W. Norton
• D. Mueller (2003), Public Choice III, Cambridge University Press.
• K. Arrow (1963), Social Choice and Individual Values, Yale University Press.
• H. Demsetz (1968), Why regulate utilities? Journal of Law and Economics XI: 55-66.
• A. Dixit (1996), The Making of Economic Policy, MIT Press.
• A. Downs (1957), An Economic Theory of Democracy, Harper and Row.
• A. Krueger (1974), The political economy of a rent-seeking society, American Economic Review
LXIV: 291-303.
• M. Olson (1965), The Logic of Collective Action, Harvard University Press.
• W. Niskanen (1995), Bureaucracy and Public Economics, Edward Elgar.
• D. North (1990), Institutions, Institutional Change and Economic Performance, Cambridge
University Press.
• A. Shleifer (2005), Understanding Regulation, European Financial Management 11 (4); 439-451.
• A. Shleifer and R. Vishny (1993), Corruption, Quarterly Journal of Economics 108 (3): 599-617.
• Kiser, E., & Karceski, S. M. (2017). Political economy of taxation. Annual review of political
science, 20, 75-92.
• Acemoglu, D., Golosov, M., & Tsyvinski, A. (2010). Dynamic Mirrlees taxation under political
economy constraints. The Review of Economic Studies, 77(3), 841- 881.

Note: Examination scheme and mode shall be as prescribed by the Examination Branch, University
of Delhi, from time to time.

41
 Discipline Specific Elective 14 (DSE-14): Public Economics

Semester
Duration (per week)
Course title Eligibility
Credits Prerequisite
& Code Practical/ Criteria
Lecture Tutorial
Practice
V/VII Intermediate
Public
Class Microecono
Economics – 4 3 1 0
12th mics II
ECON045
(ECON010)

Learning Objectives

The Learning Objectives of this course are as follows:

• Public economics is the study of government policy from the points of view of economic efficiency
and equity.
• The course deals with the nature of government intervention and its implications for allocation,
distribution and stabilization problems.
• Inherently, this study involves a formal analysis of government taxation and expenditures.
• The subject encompasses a host of topics including public goods, market failures and externalities.
• The course is divided into two sections, one dealing with the theory of public economics and the
other with the Indian public finances.

Learning outcomes

The Learning Outcomes of this course are as follows:

• The course aims to introduce students to the main theoretical and empirical concepts in public
economics, equip students with a thorough analytical grasp of implications of government
intervention for allocation, distribution and stabilization, and familiarise students with the main
issues in government revenues and expenditure.
• At the end, the students should be able to demonstrate their understanding of the public economics.

Syllabus

UNIT I: Public Economic Theory (30 hours)

• Role of Public Sector - Justification of the Public Sector; Public Sector Growth; Excessive
Government
• Political Economy of Public Sector - Public Mechanisms for allocation; Market and Non-Market
Mechanism; Theory of Rent Seeking
• Taxation - Economic Effects of Tax; Tax incidence; Dead Weight Loss and Distortion; Efficiency
and Equity Considerations; Optimal taxation; Commodity tax; Ramsey rule.

UNIT II: Indian Public Finances (15 hours)

• Tax System – Indian Tax system; Structure and Reforms. Budget, Deficits and Public debt

Recommended readings
• Cullis, J., Jones, P. (1998). Public finance and public choice, 2nd ed. Oxford University Press.
• Hindriks, J., Myles, G. (2013). Intermediate public economics, 2nd ed. MIT Press.
• Stiglitz, J. E. and Rosengard J. K. (2015). Economics of the Public Sector, 4th ed., W. W. Norton.
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 • Srivastava, D K et al. (2021), Taxing Petroleum Products: Sharing Revenue Space between Centre
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• Latest Economic Survey and Budget Documents.
• Other recent contributions in literature.

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of Delhi, from time to time.

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