Public policies evaluation

Knowledge and understanding. In recent years, the need for a rigorous evaluation of the effectiveness of public policy interventions and for a correct analysis of the social costs and benefits of public investments has grown consistently. The course aims to introduce students to the analysis of the main quantitative approaches to the economic evaluation of public policies and programs, and to provide them with the necessary tools for this purpose. In particular, students will acquire critical awareness of the role of economic evaluation in the decision-making process of public bodies and of the strengths and weaknesses that characterize the different methodologies adopted at international level for evaluation (ex ante, in itinere and ex post) of projects and public policies..

Applying knowledge and understanding. At the end of the course, students will know the fundamentals to promote the implementation of projects and public policies rational from an economic point of view, as well as to evaluate their intermediate and final results.

Making judgments. Students will be able to use the economic approach to formulate an autonomous, conscious, and critical judgment on the public decision-making process in the presence of relevant resource constraints. To further help students to develop autonomous judgments, during the lectures case-studies in different sectors of public intervention will be analysed and the use of Excel models for the evaluation of policy effects will be illustrated. 

Communication skills. Students will be able to acquire a technical language and a series of transversal skills for reporting in a clear and unambiguous way the results of the evaluation of public policies to specialist and non-specialist interlocutors, also through the use of ad hoc IT tools. Students’ communication skills will be formally evaluated during the oral exam, not precluding the possibility of evaluating these skills also through individual interventions in class.

Learning skills. Students’ learning ability will be stimulated and (informally) verified during the lectures, through an adequate interaction and discussion on general knowledge principles and their application to the case studies examined. However, the formal learning assessment will take place during the final test.

The course includes lectures, carried out with the support of slides and supplementary teaching material that will be made available to students through the Studium platform. During all the lectures some examples from real case studies will be discussed as well as practical tutorials will be held on the use of appropiriate software (excel, etc.) for carrying out economic analyses of public investments. Should teaching be carried out in mixed mode or remotely, it may be necessary to introduce changes with respect to previous statements, in line with the programme planned and outlined in the syllabus.

No formal prerequisites. The course necessarily requires the knowledge of some basic concepts of Microeconomics and Public Finance.

Lecture attendance, although not mandatory, is encouraged, to improve the acquisition of the technical language, evaluation concepts and theoretical methodologies as well as to develop the ability to apply them autonomously and consciously,

The course is ideally structured in two parts. In the first part, after considering the different definitions of evaluation and examining the role of economic evaluation in the decision-making process of public sector entities, the tools of cost-benefit analysis and its alternatives will be studied in the light of the latest national and international experiences. Topics of this first part of the program will be: definition of economic evaluation and its role in the decision-making process of public sector entities, elements of Economic Theory of Welfare and tools for measuring surplus, cost-benefit analysis and selection criteria, methodologies for evaluation of non-market goods, social discounting rate, treatment of uncertainty and risk,  distributional issues in cost-benefit analysis, cost-benefit analysis in the context of the Structural Funds of the European Union, economic evaluation of projects and sustainable development, alternatives to cost-benefit analysis (cost effectiveness, cost utility and multi-criteria analyses). In the second part of the course, issues relating to the impact evaluation of public policies will be explored. Topics of the last part of the course will be: introduction to public policy impact analysis, counterfactual logic and application difficulties, experimental method, non-experimental methods and the difference-in-differences method, uses of regression analysis,discontinuity around the threshold, Interrupted time series analysis, beneficiary surveys, definition and measures of the evaluation quality.

1. Momigliano S. and Giovannetti Nuti F., La valutazione dei costi e dei benefici nell'analisi di impatto della regolazione, Rubettino, 2001.

2. Commissione Europea, Guida all'analisi costi-benefici dei progetti d'investimento - Strumento di valutazione economica per la politica di coesione 2014-2020, 2014 (available at: https://www.invitalia.it/-/media/invitalia/documenti/news-ed-eventi/guida_costibenefici_ue.pdf?la=it-it&hash=525FAB2FEA40F1ADD240C0399A49CD5AB743C8B5).

3. Martini A. and  Sisti M., "A ciascuno il suo. Cinque modi di intendere la valutazione in ambito pubblico", Informaires, n.33, Dicembre 2007, pp. 1-9.

4. Florio M. “Apologia di un economista”, FrancoAngeli, 2020 (available at: http://ojs.francoangeli.it/_omp/index.php/oa/catalog/book/506)

5. Florio, M., Morretta, V., and Willak, W. “Cost-Benefit Analysis and European Union Cohesion Policy: Economic Versus Financial Returns in Investment Project Appraisal.” Journal of Benefit-Cost Analysis, 9(1): 147–80, 2018.

6. Martini A. and Sisti M., Valutare il successo delle politiche pubbliche, il Mulino, Bologna, 2009. (Chapters 1, 6,7,8,9)

The exam will be oral. The relevance of the answers to the questions asked, the quality of their content, the use of an appropriate technical language, the ability to apply theoretical models and policy evaluation criteria constitute elements of evaluation for the purpose of assigning the final grade. It is possible for students attending the course to replace the oral exam with a project work and / or a final written exam. Should the epidemiological conditions require it, the verification of learning may also be carried out remotely.

Exam questions may concern the following topics (as a pure example): the role of evaluation in the public decision-making process. Consumer and producer surplus: their use in the cost-benefit analysis. The different phases of the cost-benefit analysis. Techniques for the economic valuation of goods in absence of a market. Cost-benefit analysis in the context of the European Union's Structural Funds. The Funding Gap system. The counterfactual logic for the evaluation of the impact of public policies. Experimental methods. Non-experimental methods.