Business and Public Policy
Please note: Before scheduling classes, check with the department to determine the availability of courses for the upcoming semester or visit the Business and Public Policy website.
The Business and Public Policy major educates future business leaders for their interactions with government. Government influence on the conduct of business is pervasive. Whether a firm is engaged in real estate development, bringing new products to market, developing new technologies, exporting products, addressing environmental issues, or providing infrastructure services, it will need to be familiar with the myriad of government regulations and standards that determine what it can do, how it can do it, and where it can do it.
The major enables future public policy innovators in consulting or public sector employment to formulate policy with the best techniques offered by both private and public sector research. It helps future private managers to understand, react to, and help form the public environment in which they will operate.
The department’s courses focus on understanding the implications for the business world of increased globalization; technological change, such as the internet and e-commerce; the increasing role of intellectual property rights; and the public demand for greater government efficiency. These new developments have resulted in privatization, deregulation, and changes in health, antitrust, and environmental policy – all of which critically affect business interests.
The Business and Public Policy Department also participates in a cross-functional major in Environmental and Risk Management.
Requirements for the Major (Pass/Fail elective courses cannot be counted toward the major)a) BPUB 621 Government and Legal Environment of Business b) Four additional credit units in business and public policy. One of four credit units may be from an approved list of courses in other departments of the Wharton School or in other Schools of the University. Courses in health care, energy, the environment, taxation, and international finance are some of those that have been approved for the major in the past. An advanced study project (BPUB 893) may be taken as one of the four credit units.
MBA Advisor: Bruce Allen (telephone: 215.898.7696; email: allen@wharton.upenn.edu)
BPUB/LGST 621 (.5 cu)
The Governmental and Legal Environment
of Business
Description: See description in Core section.
BPUB 664
Economics of Transportation
Description: This course is an introductory course designed to familiarize the student with the subject matter of transportation. Expenditure in the transportation industry totals 11% of the U.S. Gross National Product and transportation and other supply chain expenditures in many firms are second only to labor costs. While the industry has been substantially deregulated in the last 25 years, the transition to deregulation is not complete and the legacy of the 100 years of regulation still exists. In addition, the industry is unique in the sense that a major portion of the major factor of production (its infrastructure) is publicly financed. These factors make the industry different from others and suggest different management policies.
Format: Classroom lectures and discussion, homework, paper, and final exam.
Prerequisites: None, but microeconomics is helpful.
BPUB 720
Behavioral Economics and Prediction and Betting Markets
Description: This class considers an intriguing – and growing – set of non-traditional markets, including trading (or gambling) on the outcome of sporting events, elections, political risks, corporate outcomes, public policy and economic statistics. We will explore these markets, drawing on insights from economics and psychology, and highlighting the parallels between these markets and other existing markets. We will examine the potential uses of these markets in the business and public policy domains. Importantly, the success of these markets depends on whether these markets yield efficient forecasts, which in turn depends on factors such as market design, and the biases exhibited by individual traders. We then turn to discussing recent advances in behavioral economics and attempt to apply psychologically-grounded theories of information processing to a particular set of prediction markets: sports betting. Assessing potentially profitable trading strategies with a critical eye, we will discuss not only investment opportunities, but what these findings reveal about both human psychology and the operation of markets.
Format: Lecture, class discussions and computer lab, participation, and research project.
Prerequisites: None.
BPUB 761/OPIM 761
Risk Analysis and Environmental Management
Description: This course is designed to introduce students to the role of risk assessment, risk perception and risk management in dealing with uncertain health, safety and environmental risks including the threat of terrorism. It explores the role of decision analysis as well as the use of scenarios for dealing with these problems. The course will evaluate the role of policy tools such as risk communication, economic incentives, insurance, regulation and private-public partnerships in developing strategies for managing these risks. A project will enable students to apply the concepts discussed in the course to a concrete problem.
Prerequisites: MGEC 621 or microeconomics.
BPUB 770
The Political Economy of the Public Sector
Description: This course explores the role of government in the economy. We will first consider the economic rationale for government intervention in the economy-in what situations is government intervention in private markets warranted? We will then analyze the successes, failures, and compromises inherent in government interventions in a variety of areas, such: the environment, legalizing marijuana, research and development, piracy and intellectual property, merger policy, financial disclosure, banking, airlines, media, social security, terrorism, bankruptcy, education, health care, labor unions, employment regulation, and tax policy.
Format: Lectures, class discussions, assignments, midterm, and paper.
Prerequisites: A basic understanding of microeconomics.
BPUB/REAL 772
Urban Public Policy and Private Economic Development
Description: This course considers the pervasive interaction between real estate developers and government. Governments influence real estate development in many ways: through zoning laws, taxes, public expenditures, impact fees, infrastructure, building codes, environmental regulations, to name just a few. Much of the time in the course is spent understanding the effect on residential and commercial real estate development of these government interventions.
Format: Lectures, formal class discussion, visitors from private developers and policy officials, midterm and in-class final quiz.
Prerequisites: A basic understanding of microeconomics.
BPUB 773/FNCE 730/REAL 730
Urban Fiscal Policy
Description:The purpose of this course is to examine the financing of governments in the urban economy. Topics to be covered include the causes and consequences of the urban fiscal crisis, the design of optimal tax and spending policies for local governments, funding of public infrastructures and the workings of the municipal bond market, privatization of government services, and public financial systems for emerging economies. Applications include analyses of recent fiscal crises, local services and taxes as important determinants of real estate prices, the infrastructure crisis, financing and the provision of public education, and fiscal constitutions for new democracies using South Africa as an example.
Format: Lecture, discussion, and exams.
Prerequisite: MGEC 621.
BPUB 777
Cost Benefit Analysis
Description: The principle tool for project and policy evaluation in the public sector. For government, whose “products” are rarely sold, the valuation of costs and benefits by means alternative to market prices is necessary. It is the counterpart to cost accounting in the private firms and provides guidance to avoiding wasteful projects and undertaking those that are worthwhile. Given government regulations, cost benefit evaluations are critical for many private sector activities. Real estate developers, manufacturing firms, employers of all types are required to provide evaluations of environmental impacts and of urban impacts for their proposed projects. They too must engage in cost benefit analysis, in the valuation of social benefits and costs. Government analysts, consultants, and private firms regularly carry out cost benefit analyses for major investments-bridges, roads, transit systems, convention centers, dams – as well as for regulatory activities – OSHA workplace safety regulations and the Clean Air Act are two important examples.
Format: Class lectures, formal discussions, midterm, and in-class final quiz.
Prerequisites: Microeconomics.
BPUB 784/MGMT 784 (.5 cu)
Managerial Economics and Game Theory
Description: See Management, MGMT784.
BPUB 788
International Industrial Development Strategies
Description: This course analyzes the alternate industrialization strategies emerging economies have followed and their implications for firm managers and portfolio advisers. Industrial targeting, import substitution policies, export orientation, the role of foreign direct investment, and recent macroeconomic and banking crises are considered in detail. The role of the World Bank and the International Monetary Fund is analyzed. The impact of globalization and recent trends in information technology are analyzed. The sources of rapid growth in east Asia, the collapse in 1997, and the potential for further growth are considered. Microfinance strategies are intensively analyzed.
Format: To be determined by instructor.
Prerequisite: MGEC 621.
BPUB 789
Nations, Politics, and Markets
Description: The course addresses the interaction of economic and political policy and the lessons to be derived for businesses and international organizations. The course will examine the political factors underlying economic policy in emerging market economies including policies toward banking crises, privatization of state owned enterprises, macroeconomic problems, reform of the international trade system, and corruption. The role of international agencies such as the World Bank and the International Monetary Fund will be analyzed. Intensive attention will be given to government and international responses to the recent financial crises in Asia and Latin America and the problems encountered in Eastern Europe including Russia as well as China.
Format: To be determined by instructor.
Prerequisites: FNCE 602.
BPUB 798
Privatization: An International Perspective
Description:Privatization is sweeping the globe. The redefinition of boundaries between the public and private sectors created new and exciting opportunities for businesses and policy makers. This course will review the international experience with privatization— the Thatcher privatizations of the 1980s, the current sale of electric utilities, airlines, and telecommunication companies in emerging and developed economies. We will also analyze the ongoing transformation of post-Communist countries. Students will learn how to value state-owned assets using real option value techniques. We will discuss bidding strategies in privatization auctions. The last part of the course offers an introduction to project finance as a new form of cooperation between the public and private sectors. Guest speakers from investment banks, the World Bank, and former senior government officials (e.g., former Ministers of Finance) will also provide a personal view of their privatization experiences.
Format: Classroom lectures, discussion, and course paper.
Prerequisites: None.