Contemporary governance systems are characterised by a variety of actors – public and private, local and international, formal and informal. Furthermore, actors operate in a complex institutional setting. What are institutions, how do they change, and what effect do institutions have on the behaviour of actors? These are the key questions in this course.

In this course students master modern methods of applied empirical research. We focus on empirical methods that uncover the causal impact of public policies. For example, what is the impact of subsidized childcare on female labor participation, or what is the impact of an extra year of schooling on your salary? Students also learn how to apply these methods using a ‘hands-on’ approach

When do markets fail and what policy instruments can be used to correct these market failures? This is the central question in the course on the economics of regulation. Economists distinguish several potential causes of market failure: externalities, collective goods, imperfect competition, and information asymmetries. On top of this, the decision-making process by individuals is key for the scope and effectiveness of government policy that intends to improve the outcome of markets.

Globalisation, ageing of populations and high levels of unemployment pose difficult dilemmas for policy-makers. On the one hand, policy-makers may pursue socio-economic reforms in order to increase a country’s competitiveness or to improve the functioning of the labour market. On the order hand, the reality is that such socio-economic reforms are politically challenging. In this course, we study this type of dilemmas at the intersection of economics and governance from an international comparative perspective. Questions that we address are for example: How do policy-makers adjust social assistance and unemployment benefit schemes in times of increasing migration? To what extent do international trade and capital flows trigger reforms of corporate income taxes? Why did the response of policy-makers to the financial crisis vary across countries? What is the effect of globalization and technological change on income inequality?

Governments implement welfare state programs to protect their citizens to social risks such as falling sick, becoming unemployed, ageing or the occurrence of health costs. These programs, that range from public benefits to the regulation of private insurance markets, may have a strong impact on the income, well-being and the behavior of individuals. Welfare state programs are typically justified by equity and public responsibility, but at the same time the growth of public expenditures force governments to make more efficient use of existing resources. This gives rise to a tension between equity and efficiency considerations.

This course provides an economic perspective on the design of equitable and efficient welfare state programs. The course starts with exploring the fundamental arguments for state intervention and the provision of social insurance, using concepts from insurance theory. Next, attention will be devoted to different welfare state interventions, including cash benefits (such as unemployment insurance, sick pay, disability insurance and pensions) and benefits in kind programs (e.g. health care and labor market programs). Throughout the course, these programs will be assessed along the line of equity and efficiency measures, using insights from the empirical literature on the effect of welfare state interventions on individual behavior and social outcomes.