PAUD 8040: Seminar: The Economic and
Institutional Foundations of Public Affairs
Class Time: Mondays 4:00pm – 6:45pm
Class Location: Room 525 SPA Suite
Instructor
Benoy Jacob, PhD
Benoy.jacob@ucdenver.edu (I try to answer student emails within 24 hours)
Office: 525Q
Office Hrs: By appointment
Course overview and objectives:
This course is a survey course. It begins by introducing some simple economic concepts
alongside some models/frameworks for critically assessing scholarship. It then proceeds by
following the evolution of economic thought, as it relates to the field of public affairs. As such,
we start with the emergence of public choice scholarship (such as James Buchanan, Gordon
Tullock and Mancur Olson). Thus, we do not consider Marxian political-economy or any of the
classical economic scholars (such as David Ricardo or Adam Smith).
In tracing the evolution of thought in this way, this course (and the related assignments) achieves
the following three objectives:
1. It will enhance your understanding of the development of scholarship in the field of
public affairs. As such, it is worth noting that the course strives for a breadth of
coverage, as opposed to a depth of coverage.
2. It will give you an opportunity to think about research questions in your particular area of
interest, i.e. your future dissertation, and
3. It will expose you to the “culture” of scholarship. That is, you will be expected to
consider and discuss the reading material in a scholarly manner. This means you will
need to develop your scientific reasoning and to focus your discussions in a way that
reflect such reasoning.
Required Texts:
Kuhn, T. (1996) The structure of scientific revolutions 3rd edition. University of Chicago Press.
Morton, R. (1999) Methods and models: a guide to the empirical analysis of formal models in
political science. Cambridge University Press
Shepsle, K (2010) Analyzing Politics: Rationality, Behavior, and Institutions 2nd Edition. W.W.
Norton Press.
Green D.P. and Shapiro I. (1994) Pathologies of Rational Choice Theory. A critique of
applications in political science. Yale University Press.
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Hindmoor, A. (Ed) (2006) Rational Choice. Palgrave MacMillan Press
Friedman J. (Ed) (1996) The Rational Choice Controversy: Economic Models of Politics
Reconsidered. Yale University Press.
Dobbin, F. (Ed) (2004) The new economic sociology: a reader. Princeton press
Rhodes, Binder and Rockman (Eds) (2006/2008) The Oxford Handbook of Political Institutions.
Oxford University Press.
Bowles, S. (2004) Micro-economics: Behavior, institutions and evolution. Princeton press
Additional books will be required for each student’s particular book reviews.
Journal articles are ALL available digitally through the library. It is your responsibility to track
these down.
How to be successful in this class:

Attendance: Attendance at every class meeting is crucial for success. Of course,
unexpected events may keep you from class but please bear in mind that it is extremely
difficult to “catch up once you are behind.” Additionally, if you are late to class, I will
not review the material that you missed and you should not expect your colleagues to ‘fill
you in’ while the seminar is in progress.

Reading: The course is reading intensive. DO NOT show up to class having NOT read
the material. To succeed in this course, (and in your future courses) you will need to
develop your critical thinking skills and engage in “active” reading (read the material,
think about the material, synthesize the main arguments, re-read the material, re-think
your original synthesis, come to class to discuss your ‘informed’ perspective on the
material, read the material again….and possibly again).
The frameworks, models and theories covered in this class should NOT merely be
memorized and then recited when the opportunity arises. Rather a deeper understanding
(as should be the expectation at a graduate level) is achieved by actively discussing and
engaging the course material (and your peers). You should strive to challenge underlying
assumptions and re-conceptualize key elements of the main arguments of the ‘classic
works.’ You should also challenge your own assumptions and re-conceptualize your own
arguments about public affairs. The goal of the discussions is to ‘play’ with the ideas
found in the readings. Don’t be afraid of ‘being wrong’…. BUT, be prepared to present
your thoughts in a logically coherent fashion.
The discussion will be grounded in the intellectual discourse. You should express your
thoughts in terms of the course reading material. If the readings do not conform to your
views or past experiences, you should:

Ask: why your experience differs from what the readings suggest?
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o
o
o


Is the theory wrong?
Is your experience a ‘special case’?
Can the theory/model be expanded to incorporate your position?
Go beyond the course readings to find theories that coincide with your position
and integrate them in the class materials.
Writing
The papers should be VERY well written. Writing is your job! Take it seriously.
In all of your papers (the book reviews and syntheses) MAKE AN ARGUMENT. This
involves taking a stand on an issue and marshaling the requisite evidence. However, for
your (our) purposes writing is not simply an expression of your argument, idea etc.. It is
an exercise in thinking. You should view the writing process as an opportunity to shape
your intellectual position on the issue at hand. Thus, you should never hand me (or any
of your other professors) the first draft of your writing. Write, re-write, re-write and then
send it to me.

Participation: The value of this class, (like all other PhD classes) is directly related to
what you “put in.” I expect you to contribute each and every week; indeed, regular,
respectful, and enthusiastic verbal contributions to class are a must! If you are not
comfortable in these settings, you will have to commit to making a conscious effort to
work on these skills.

Standards: I expect you to take yourself, your classmates, your work and me, seriously. I
expect you to go beyond the minimum expectations (i.e. the required readings). That
said, grades are based on the quality of the work presented, NOT on effort. Some of you
will have to work harder than your classmates to achieve the same grade.
Course Requirements & Grading:
1. Class Participation (0%)
There is no grade assigned for participation. It is simply expected that, as PhD students, you will
be actively engaged in the class and will participate in ongoing discussions about the course
material (see “how to be successful,” above).
As described below, the class is largely organized around student presentations. In these
presentations students will present their arguments about the reading material. The discussion
follows a process of ‘enlightened interrogation.’ That is, presenters must be willing and able to
defend their claims against a sustained set of critical questions. These questions will be offered
up by the course instructor as well as your peers.
Both the presenter and the ‘interrogators’ will be evaluated.
2. Synthesis Papers and Presentation (30%)
Students will be required to write and present at least 2 papers that synthesize the readings for the
week. Each paper (and presentation) should be structured as an argumentative essay that:
a) Presents the main themes of the readings for that week. If there are multiple articles they
should be summarized AS A WHOLE.
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b) Describes the intellectual merit of the readings, i.e. what intellectual shortcoming, in
economics, are these readings addressing and how do these new ideas move economics
forward, and
c) Relates the readings to the broader literature from your other classes in public affairs, i.e.
have any of these ideas come up in your public affairs classes? If so, how? If not, do you
think they could address a shortcoming in the public affairs literature?
The presentations will serve as the basis for each class discussion. Thus, EVERY student should
have read and considered the same readings for each week.
Powerpoint Presentations (or versions thereof) are NOT allowed.
3. Critical Book Review & Presentation (30%)
Each student will be responsible for writing and presenting at least 2 critical book reviews. Each
student will email the group (posted 24 hours before the beginning of class, so that others have a
chance to look them over before class). This will help students generate a small set of critical
reviews that should help when studying for the qualifying exam.
These reviews are NOT simple summations of the text. These are critical reviews. Thus, you
must make an argument about the book that takes into account:
a) How the book fits with the readings for that week
b) The contribution that the book had (or has) on economics and some aspect of public affairs,
and
c) Any shortcomings in the main argument of the book or of the evidence put forward.
NOTES FOR THE BOOK REVIEWS
** these issues will, likely, NOT be self-evident. They will require some additional reading and
consideration
** it is not a particularly valuable critique to state that the book was (or was not) “well-written.”
** the reviews should NOT exceed 3 pages. Reviews that exceed three pages will be returned to
the student (without comments or a grade) to be re-written. Providing critical reviews of complex
subjects (as found in the book selection) in a very concise manner is difficult. That is the point!
Don’t fiddle with the formatting to make your review fit the page limit (12 pt font, Times New
Roman and 1” margins all around).
4. Research Proposal (40%)
For this assignment you will need to take your area of scholarly interest and develop a research
proposal. The proposal does not need to go as far as identifying datasets or a research design.
BUT it should clearly identify:
1) a research question
2) the scholarly importance of the research question
3) some hypotheses to be tested
In this assignment you have wide latitude. It need not be based on any part of the economic
framework developed in this class. These proposals will be presented in the final class session
(powerpoint should be used). I will likely invite other professors, who have related interests (and
might serve on your committee) to come and comment on your presentation.
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In terms of grading, I keep in mind that our PhD students must maintain a 3.5 GPA to stay in
good standing. Thus, I consider an “A” grade to represent excellence in all facets of the course,
and “A-“ to be close to that standard, but falling a bit short, a “B+” to be solid doctoral
performance, and a “B” grade to be adequate, but not outstanding. Grades less than “B” are given
for performance below expected standards, and grades below “B- do not count for core course
credit.
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Course Schedule
Date
January
27
February
3
Topic
Introduction:
Describe course
requirements
Science, Rational
Choice, and the
Emergence of
Public Choice
Reading
Kuhn T. The Structure of
Scientific Revolutions
Morton: Methods and
Models – Chapters 1 – 3
Mueller, D. Introduction:
Perspectives in Public
Choice (on blackboard)
Ostrom (1971) Public
Choice: a different approach
to the study of public
administration. Public
Administration Review 31
(2) 203 -216
Mitchell, W.C (1988)
Virginia, Rochester, and
Bloomington: twenty-five
years of public choice and
political science. Public
Choice 56(2) 101-119
Introduction
to Rational
Choice
Book Reviews
Buchanan, J & Tullock, G.
(1962) The Calculus of
Consent: Logical
Foundations of
Constitutional Democracy.
Ann Arbor: University of
Michigan Press
Olsen, M. (1965) The Logic
of Collective Action: Public
Goods and the Theory of
Groups. Cambridge:
Harvard University Press
Buchannan, J. & Musgrave,
R.A. (1999) Public Finance
and Public Choice: two
contrasting visions of the
state. MIT Press
Heikkila, T. 2006. “The
Contribution of Public
Choice Analysis to Decision
Making Theories in Public
Administration” in, The
Handbook of Decision
Making, ed. Goktug Morcol.
New York: Taylor and
Francis, pp. 21-38. (on
blackboard)
Hindmoor – Chapter 1, 5, 8
&9
February
10
Class 3
Tiebout,
Polycentricity &
the Leviathan
Shepsle – Part I (Chapters 1
& 2).
Tiebout, C (1956) A Pure
theory of Local
Expenditures . Journal of
Political Economy 64 (5)
416-424
Fischel, W. The Homevoter
Hypothesis: How Home
Values Influence Local
Government Taxation,
School Finance, and LandUse Policies. Harvard
University Press
Two chapters from: the
Tiebout model at 50 (on
Niskanen, W. A. (1971)
6
blackboard)
1) Footloose at Fifty:
An Introduction to
the Tiebout
Anniversary
Essays, William A.
Fischel
Bureaucracy and
Representative Government.
Chicago: Aldine Press.
2) The Many Faces of
the Tiebout Model,
Wallace E. Oates
Commentary,
Robert Inman
Chapters 1 – 5 from
Polycentricity and Local
Public Economics (on
blackboard)
Oates W. (1985) Search for
Leviathan: an empirical
study.
American Economic Review
(Sept. 1985), 75, pp. 74857.
Holcombe R.G (1989) The
median voter in public
choice theory. Public
Choice. 61(2) 115 – 125
Addressing
the Limits of
Rational
Choice
February
17
Challenges to
Rationality
February
24
Bounded
Rationality
Boyne G (1998)
Bureaucratic Theory meets
reality: public choice and
service contracting in U.S.
Local Government. Public
Administration Review 58
(6) 474-484
Green & Shapiro (1994)
Pathologies of Rational
Choice Theory: a critique of
application in political
science. Yale University
Press
Conlisk, J. Why Bounded
Rationality?
Journal of Economic
Literature , Vol. 34, No. 2
(Jun., 1996), pp. 669-700
Sen, A.K. Rational Fools: A
Critique of the Behavioral
Foundations of Economic
Theory Philosophy &
Friedman J. (1996) The
Rational Choice
Controversy: Economic
Models of Politics
Reconsidered. Yale
University Press.
Simon, Herbert (1956)
Administrative Behavior
Jones B.D. (2001) Politics
and the Architecture of
Choice: Bounded Rationality
and Governance. Chicago:
University of Chicago Press.
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Public Affairs, Vol. 6, No. 4
(Summer, 1977), pp. 317344
Jones B. D. Bounded
Rationality and Political
Science: Lessons from
Public Administration.
Journal of Public
Administration Research
and Theory; Oct 2003; 13, 4
Forester, J. Bounded
Rationality and the Politics
of Muddling Through.
Public Administration
Review. January 1984. Pgs
23-31
March 3 -
Transaction-Costs
Principal-Agent
Theory
Organizational
Learning
Padgett, J.F. Bounded
Rationality in Budgetary
Research
The American Political
Science Review , Vol. 74,
No. 2 (Jun., 1980), pp. 354372
Coase, Ronald. "The Nature
of the Firm." Economica 4
(1937): 386-405.
Alchian, Armen, and Harold
Demsetz. "Production,
Information Costs, and
Economic Organization."
American Economic Review
62 (1972): 316-325.
Williamson, Oliver.
Transaction Cost
Economics: The
Governance of Contractual
Relations. Journal of Law
and Economics 22 (1979):
233-261
Cyert, Richard, and James
March (1992). A Behavioral
Theory of the Firm. 2nd ed.
New York, NY: WileyBlackwell, 1992.
Miller, Gary, Managerial
Dilemmas: The Political
Economy of Hierarchy
Allison,Graham, The
Essence of Decision
March J.G. (1991).
Exploration and exploitation
in organizational learning.
Organization Science 2, 7187.
Eisenhardt, K. (1989)
Agency theory: An
assessment and review,
Academy of Management
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March 10
Introduction to
Institutions
Review, 14 (1): 57-74
R, B &R Part I & Part II
(pgs 3 – 110)
Institutional Economics
John R. Commons
The American Economic
Review , Vol. 26, No. 1,
Supplement, Papers and
Proceedings of the Fortyeighth Annual Meeting of
the American Economic
Association (Mar., 1936),
pp. 237-249
March 17
Institutional
Theories and
Frameworks of
Collective Action
Bendor, J &Mookherjee, D.
Institutional Structure and
the Logic of Ongoing
Collective Action
The American Political
Science Review , Vol. 81,
No. 1 (Mar., 1987), pp. 129154
Lubell, M. Feoick, R, &
Ramirez, E (2005) Political
Institutions and
Conservation by Local
Governments. Urban Affairs
Review 40 pp706-729.
North, D. 1990 Institutions,
Institutional Change and
Economic Performance.
Cambridge: Cambridge
University Press.
March, J. & Olsen, J. (1989)
Rediscovering Institutions:
the organizational basis of
politics.
Elinor O. (1990) Governing
the Commons: the evolution
of institutions for collective
action. Cambridge:
Cambridge University Press
Clingermeyer J.C. and
Feiock, R.C. (2001)
Institutional Constraints and
Policy Choice: and
exploration of local
governance. SUNY Press.
Feiock, R (2009)
Metropolitan Governance
and Institutional Collective
Action Urban Affairs
Review vol. 44 no. 3 356377
Ostrom, E. A Behavioral
Approach to the Rational
Choice Theory of Collective
Action 1997
The American Political
Science Review , Vol. 92,
No. 1 (Mar., 1998), pp. 1-22
Lubell, M. Schneider, M,
Scholtz, J.T. and Mete, M.
(2002) Watershed
Partnerships and the
Emergence of Collective
Action Institutions
American Journal of
Political Science , Vol. 46,
No. 1, pp. 148-163
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March 24
March 31
April 7 -
Spring Break
R,B & R Part III (Chapter 8,
Chapter 9, Chapter 10,
Chapter 13, Chapter 19,
Chapter 21, Chapter 25)
Behavioral
Economics
Posner, R.A. (1998)
Rational Choice, Behavioral
Economics, and the Law
Stanford La w Review 50 (5)
Kahneman , D (2003) Maps
of Bounded Rationality:
Psychology for Behavioral
Economics American
Economic Review. 93(5)
Scott R. (2001) Institutions
and Organizations
(Foundations for
Organizational Science).
Sage Publications
Bok, D (2010) The Politics
of Happiness: What
government can learn from
the new research on wellbeing. Princeton University
Press
1449-1475
Simon, H. (1985) Human
Nature in Politics: The
Dialogue of Psychology
with Political Science.
American Political Science
Review, Vol. 79, No. 2 pp.
293-304
Tversky, A.; Kahneman, D.
(1981). "The Framing of
decisions and the
psychology of choice".
Science 211 (4481): 453–
458
Tversky, A.; Kahneman, D.
(1986) Rational Choice and
the Framing of Decisions.
Journal of Business. 59(4)
S251-S278
Druckman J. (2001) The
Implications of Framing
Effects for Citizen
Competence. Political
Behavior 23 (3) 225-256
Druckman J. (2004)
Political preference
formation: competition,
deliberation and
(ir)relevance of framing
effects. American Political
Science Review. 98(4) 671686.
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April 14 -
April 21 -
Economic
Sociology
Social Networks
Dobbin, F. (2004) The new
economic sociology: a
reader. Princeton press
(Chapters 1- 5, Chapter 17,
Chapter 18, Chapter 20)
Schumpeter, J. (1943)
Capitalism, Socialism and
Democracy
Dobbin, F. (2004) The new
economic sociology: a
reader. Princeton press
(Chapters 8 - 13)
Fligstein, N. (2001) The
architecture of markets: an
economic sociology of 21st
Century Capitalist societies.
Princeton University Press.
Monge & Contractor 2003
Theories of Communication
Networks. Oxford
University Press
Granovetter, M. (1973).
"The Strength of Weak
Ties", American Journal of
Sociology, Vol. 78, Issue 6,
May 1973, pp. 1360-1380.
Rauch, J. (ed) 2007. The
Missing Links: the formation
and decay of economic
networks. Russell Sage
Foundation
John F Padgett and
Christopher K. Ansel (1993)
Robust action and the rise of
Medici American Journal of
Sociology 98(6): 1259-1319.
Watts, D (2003) Small
Worlds: the dynamics
between order and
randomness. Princeton
Press.
Provan K. G. & Milward H.
B (2001) Do Networks
really work? A framework
for evaluating public sector
organizational networks.
Public Administration
Review 414-423
April 28 -
Complexity
Theory
Borgatti S. P. & Halgin,
D.S. (2011) On Network
Theory. Oganization
Science 22(5) 1168-181
Page S.E. & Miller J.H.
(2004) The Standing
Ovation Problem.
Complexity (9) 8-16
Page S. E. & Hong L.
(2001) Problem Solving by
Heterogeneous Agents.
Journal of Economic Theory
97 (1) 123-163.
Page S.E. (2010) Diversity
and Complexity. Princeton
University Press.
Schelling T.C. (1978)
Micro-motives & MacroBehavior. W.W. Norton &
Company Inc.
Kollman, K; Miller, J.H. &
Page, S.E. (1998) Political
Parties and Electoral
Landscapes British Journal
of Economic Theory 28 (1)
139 – 158.
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Simon, H.A. (1962) The
Architecture of Complexity.
Proceedings of the
American Philosophical
Society. 106 (6) 467-482
May 5A new
economic
framework?
Behavior,
Institutions and
Evolution
May 12 –
Bowles, S. (2004) Microeconomics: Behavior,
institutions and evolution
Research Proposal
Presentations
Students with Disabilities:
“The University of Colorado Denver is committed to providing reasonable accommodation and
access to programs and services to persons with disabilities. Students with disabilities who want
academic accommodations must register with Disability Resources and Services (DRS), North
Classroom 2514, phone: 303 556-3450, TTY: 303 556-4766. I will be happy to provide approved
accommodations, once you provide me with a copy of DRS’s letter.”
[DRS requires students to provide current and adequate documentation of their disabilities. Once
a student has registered with DRS, DRS will review the documentation and assess the student’s
request for academic accommodations in light of the documentation. DRS will then provide the
student with a letter indicating which academic accommodations have been approved.]
Student Code of Conduct:
As members of the University community, students are expected to uphold university standards,
which include abiding by state civil and criminal laws and all University policies and standards of
conduct. Every student should review the Student Code of Conduct.
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