lesston 1: State X Market failures

Market failures:

Monopoly

Externalities

Information assymetry

 State/government failures:

Log rolling

Byrocracy

Time lags in policies

Policy analysis shortcomings

Political blocks of needed change

Tarriffs, quotas, subsidies and so on

(public choice theory)

lesson 2: Where does the government get "their" money?

Public goods→ publicly financed →

Public Finance functions:

1.   alocation (production factors: labour + capital + land)

2.   redistribution (taxation + transfers)

3.   stabilization (business cycle/individual or family← social security)

Public fiance = projecting or materializing political ideas → CZ gov. has 30 % of GDP in expenses ← 80 % tax (peoples work) 10% other 10 % debt

Political cycle (4 years)

1: deal, coalition..preparation

2: change happens (unpopular)

3: unpop not anymore

4: ↑benefits +

What is the main motivation of a politician?

lesson 3 Information autocracy introduction↓