Institutional and Behavioral Economics

Campus: 
Vienna
Academic Year: 
2019-2020
Term: 
Winter
US Credits: 
2
ECTS Credits: 
4
Course Description: 
Mandatory/Elective for One-year MAPP and MPA 1st year students (Students have to complete 2 credits of either this class or
Economics of Higher Education (2); or Political Economy of Reforms (2); or Data and Development (2))
 
Development Specialization

Institutional economics is the study of the evolution of economic organizations, laws, customs, beliefs and their interactions with the process of economic development. The course examines the role of history and both formal and informal institutions (culture) in the performance of economies.  The course uses a microeconomic and behavioral approach to understand the feedback between individual beliefs and choices and institutions, including a module on nudging. The goals of this course are to (1) deepen your understanding of the role of institutions in the process of economic development, (2) provide you with empirical, conceptual and theoretical apparatus that have wide application for understanding the mechanisms, (3) suggest empirical and theoretical research projects for a nuanced perspective of culture and the long shadow of history on socio-economic outcomes (4) introduce students to recent behavioral insights for policymaking and (4) invoke and engage your curiosity about the “why’s and wherefore’s" of the world today. 

Some examples of the topics covered in the course: How did the slave trade affect mistrust, trade, and growth in Africa? Can an inherited culture of honor explain the history of violence in the US South? How does language affect economic behavior? Can nudging improve pro-social behavior? 

Format

Lectures are intended to provide structure and a theoretical framework to guide the discussions and student presentations. Students interested in advancing their quantitative skill-sets are encouraged to write an empirical research paper. 

Learning Outcomes: 
Students will be able to:
  • understand the effect of institutional mechanisms (e.g., laws, customs and, history) on development
  • widen their understanding of the development process and develop thesis ideas
  • integrate behavioral insights for institutional design (for example, nudging social preferences)
Assessment: 
  • Paper discussion 15%

  • Assignment/Short notes 25%
  • Team presentation 20%
  • Research Paper outline 10%
  • Final Research paper 30% 
Prerequisites: 
There are no prerequisites for this elective (but students are expected to have
taken basic courses in statistics and economics).