This course is taught by Professor Edoardo Reviglio.
The course will introduce students to the law and economics of the public sector in contemporary Western countries. The approach will be both comparative and historical, focusing on the evolution of public spending in the 20th centuryand the changing balance between public and private power in the passage from mixed economy and large welfare systems to privatization, open market economies and attempts to reduce the social role of the State. The course will be divided in three parts. The first part deals with the theoretical underpinnings of the law and economics of the public sector in an historical perspective. The second part deals with the comparative evolution of the welfare systems in major Western countries and the challenge of recasting a new Welfare State for the future. The third part studies the evolution of modern capitalism in the 20th century and the passage from mixed economy to market economy systems all the way to privatization and to its failure.
The welfare system, we will argue, is one of the greatest achievements in the history of civilization. Such a model has been under attack in the last 20 years due to the rise and dominance of neo-liberal ideologies. However, in the last 20 years there has been no reduction on the public spending/GDP ratio in any of the major European or American countries. At the end of the 20th century, many countries underwent massive privatization programs. Privatization was joined by deregulation and the introduction of competitive policies. The results of such a process will be studied from a critical perspective. There is today very convincing empirical evidence that privatization, deregulation and competitive regulation have not produced any benefit in terms of price and quality of services or any positive social and economic externalities for the economy and society as a whole. They have just produced a massive transfer of wealth from the poorest to the richest, and a heavy downgrading of the quality of the long term infrastructural basis of the economy.
The course will explore the effects of the present crisis in world economy and try to understand what kind of State intervention will emerge as a response to it. The challenge is that of reinventing the future according to a revised balance between private and public power, between the short-term view of private actors and the long- term view of public institutional actors. We believe that the latter should return at the centre of the stage. But how should we govern this political and structural change? That is where new ideas and visions are needed.