SYLLABUS FOR POLITICAL SCIENCE/ECONOMICS 409A, Undergrad Seminar in Political Economy: Economics & Politics of Property Rights, Regulation, and Innovation
Professor Contact Information:
Professor Victor Menaldo
Dept. of Political Science
Gowen Hall, Room 31
Email: profmenaldo@gmail.com
Office Hours: by appointment
Class Information:
Fall Quarter, 2026
Overview:
In this class, we explore the economic consequences of property rights and government regulation of the economy, as well as the origin of these institutions and policies. We focus particular attention on innovation and the government’s role in fostering innovation.
We examine the following questions:
- What are property rights?
- What are transaction costs?
- What are market failures?
- What are public goods?
- How is regulation an extension of property rights?
- How do firms differ from states?
- What explains firms’ size, scope, product lines, and business strategy?
- What is innovation, and why should we care about it?
- What effects do property rights and regulation have on innovation?
- What is the relationship between science, education, and innovation?
- What is the Fourth Industrial Revolution and the future of innovation?
In order to address these questions, we familiarize ourselves with the “new institutional economics” framework, which focuses on property rights, transaction costs, market failures, and firm and market structure. We complement this approach with basic micro-economics and employ concepts such as supply and demand curves, economies of scale, externalities, public goods, and rents.
Course Requirements:
Students are expected to complete the required readings each week, turn in short responses to the readings, and contribute to in class discussion. Grades are awarded on the basis of these things and a final group project each group will present to the class.
Course Evaluation:
Short Responses to Readings – 25%
Verbal Participation in Class – 25%
Final Project – 50%
Reading and other Assignments:
I will share a dropbox link with you all of the books (in electronic form), journal articles and unpublished papers that will be assigned as required readings. Read these in the order in which they appear in the syllabus. YOU DON’T NEED TO PURCHASE ANY BOOKS OR COURSE PACKETS!
Class Participation Guidelines:
Students cannot participate if they are not present to do so. Since I am serious about grading participation, the safest conclusion to draw is: attend class. Not all participation is created equal, however. You will be graded on the relevance, cogency, and persuasiveness of your oral contributions. During class discussion, you should draw from the week’s readings—which means that you should complete the readings before our class meeting.
Directions for Short Responses to Readings:
Send me a few paragraphs about the readings before our class meeting. Discuss interesting puzzles/questions/ideas provoked by the readings. What surprised you about them? What did you learn the most? What do you disagree with?
So, when we meet on MONDAYs, make sure that you have sent these to me by Sunday at midnight. And, when we meet on WEDNESDAYs, make sure that you have sent these to me by Tuesday at midnight. Make sure you have done the reading and done it carefully. Make sure these emails are well crafted and thoughtful.
You MUST send your short response paper that you share with me before class to the following email address: profmenaldo@gmail.com
Final Project:
You will get organized into groups of four/five and choose a country. You will then identify the regulatory system of your country in regards to competition policy, intellectual property rights, and access to finance. You will also evaluate the economic consequences that these regulatory domains have in terms of promoting or discouraging entrepreneurship and innovation. Finally, you will do case studies of businesses that operate in your country or propose how a startup firm would seek to begin operations, compete, grow, and innovate.
Accommodations:
Washington state law requires that UW develop a policy for accommodation of student absences or significant hardship due to reasons of faith or conscience, or for organized religious activities. The UW’s policy, including more information about how to request an accommodation, is available at Religious Accommodations Policy (https://registrar.washington.edu/staffandfaculty/religious-accommodations-policy/). Accommodations must be requested within the first two weeks of this course using the Religious Accommodations Request form (https://registrar.washington.edu/students/religious-accommodations-request/)
Course Schedule:
The following course schedule lists the required readings for each day under each lecture’s topic.
- COURSE BUILDING BLOCKS
WEEK 1, DAY 1 (WED)
Review of the syllabus and Introduction
- Mangu-Ward, “We Live in a World of Reliable Miracles”
- Pinker, “The Enlightenment is Working”
- Ip, “When Tech Bites Back: Innovation’s Dark Side”
- Easterly, “Review of Going Beyond the Limits of the Earth With ‘The Wizard and the Prophet’”
- Yu, “The World Is in Crisis, and That’s Good for the Economy”
WEEK 2, DAY 1 (MONDAY)
What is innovation and its deeper causes?
Mokyr, “Long-Term Economic Growth and the History of Technology”
WEEK 2, DAY 2 (WED)
Innovation in the past, innovation now, innovation in the future.
Gordon, “Rise and Fall of American Growth (Chapter 1).”
Baily, Manyika, Gupta: “U.S. Productivity Growth: An Optimistic Perspective”
Mokyr, “The Next Age of Invention”
Cambon, “U.S.’s Long Drought in Worker Productivity Could Be Ending.”
- UNDERSTANDING PROPERTY RIGHTS & REGULATION
WEEK 3, DAY 1 (MON)
Intro to New Institutional Economics: property rights, transaction costs, the state & firms.
Alston, Alston, Mueller and Nonnenmacher, “Institutional and Organizational Analysis,” pgs. 31-71.
WEEK 3, DAY 2 (WED)
The Coase Theorem, Externalities, Market Failures
Alston, Alston, Mueller and Nonnenmacher, “Institutional and Organizational Analysis,” pgs. 71-79.
Coase, “The Problem of Social Cost”
Long and Menaldo, “From the Election Lie to Gamestop: How to Stop Social Media Algorithms from Harming Us”
WEEK 4, DAY 1 (MON)
Public Goods and the State’s Role in Crafting Markets
Nelson and Romer, “Economic Growth and Public Policy”
Menaldo, Chapter 3 of “History’s Most Revolutionary Innovation: AI and Its Origins and Impact.”
Feld, Jungen, and Schuknect, “Why the Social Market Economy Succeeds”
WEEK 4, DAY 2 (WED)
Intellectual Property Rights: What is IP?
Granstrand, “Innovation and Intellectual Property Rights”
Spulber, “How Patents Provide the Foundation of the Market for Inventions”
WEEK 5, DAY 1 (MON)
Financing Innovation
Hall and Lerner, “The Financing Of R&D and Innovation.”
WEEK 5, DAY 2 (WED)
Antitrust and Competition Policy
Menaldo, Chapter 6 of “History’s Most Revolutionary Innovation: AI and Its Origins and Impact.”
WEEK 6, DAY 1 (MON)
Choose your groups and start work on projects; email me your group composition and country.
- UNDERSTANDING FIRMS
WEEK 6, DAY 2 (WED)
The Theory of the Firm: whether to buy or make, opportunism problems & principal agent issues
Coase, “The Nature of the Firm”
Alston, Alston, Mueller and Nonnenmacher, “Institutional and Organizational Analysis,” pgs. 81-109.
Watch “The Founder” (Movie) on iTunes or YouTube or Amazon Prime or Vudu or Google Play
WEEK 7, DAY 1 (MON)
How firms compete: the competition ecosystem, supply chains & business strategy
Porter, “The Five Competitive Forces that Shape Strategy”
Saloner and Chang, “Shimano and the High-End Road Bike Industry”
- UNDERSTANDING THE FOURTH INDUSTRIAL REVOLUTION
WEEK 7, DAY 2 (WED)
The Fourth Industrial Revolution
Menaldo, “The Political Economy of the Fourth Industrial Revolution”
Kelly, et al., “Smartphones as Multisided Platforms”
- GROUP PRESENTATIONS
WEEK 8, DAY 1 (MON)
Menaldo, “Instructions for 409A Presentations”
Review of what should be in group projects; group presentation order lottery.
WEEK 8, DAY 2 (WED)
Work on your presentations
WEEK 9, DAY 1 (MON)
Group 1 Presentation
WEEK 9, DAY 2 (WED)
Group 2 Presentation
WEEK 10, DAY 1 (MON)
Group 3 Presentation
WEEK 10, DAY 2 (WED)
No class, Thanksgiving
WEEK 11, DAY 1 (MON)
Group 4 Presentation
WEEK 11, DAY 2 (WED)
Group 5 Presentation