Welfare Economics (ECO122)

Welfare economics is a branch of economics that focuses on the optimal allocation of resources and goods. This course integrates discussions relating economic theories to different notions of social justice and historical developments of welfare state. Welfare state theories and concepts are discussed in terms of equity and efficiency. The course introduces crucial debates about the borderline between state and market. Various aspects of welfare state are analysed with help of two broad questions: what are the aims of policy and by what methods those aims are best achieved?

Each society faces questions related to scope of redistribution (of wealth, income, power etc. and how much of it should be there) and methods that are employed to organise economic activities (market, central planning, mixed economy) to achieve societal economic and social goals. Those two broad sets of questions are the main axis for the discussions during the course. In order to enhance such discussions, the course examines origins and dissemination of welfare state, two main social welfare traditions (Bismarckian and Beveridgean) as well as comparative welfare state typologies (liberal, conservative and social-democratic). Basic principles of social insurance, role of private and public sector in social insurance provision are covered during the course. The course examines retirement pensions and their financing mechanisms (pay as you go and funded) in detail, social assistance principles, its organisational aspects and main types of benefits. Special attention during the course is paid to income inequality, poverty and social exclusion, their measurement methods.

Aim of this course is to enable students to develop a basic understanding of main topics in the economics of welfare state in democratic market economies. Students are expected to be able to define central concepts and apply these in basic discussions about the role of the state and the individual in provision of welfare (in terms of efficiency, social justice and equity) and some of the major issues in the design and financing of welfare state provisions. Moreover, it is important for the students to be able to apply concepts and theories to practical domestic and global policy debates.

• Analyse and discuss main features and failures of market economy and public policiesf
• Compare and discuss arguments utilised in favor/against state intervention in different schools of economic thought.
• Apply basic concepts, terminology and organisational principles of welfare.
• Evaluate and compare different methods of welfare financing.
• Overview and compare structure of welfare state and social security in particular in different countries.
• Compare and discuss relationship of economic and social policies.
• Compare and discuss welfare state theoretical models and analyse real welfare systems.
• Analyse and compare different welfare provisions among countries: retirement pensions, health care, social assistance systems.
• Analyse and discuss main principles of measuring income inequality, poverty and social exclusion.
• Overview international aspects of welfare/social security regulation.
• Work in teams, present work results both in writing and orally, provide argumentation.