Public Economics

Course Description

Public economics provides us with a toolkit for analyzing and evaluating a host of aspects of the issue at stake. First, why might such a policy be desirable? Market failure, externality and public goods analysis here becomes helpful. So too does cost-benefit analysis. What are the likely effects of such a policy? Public economics provides us with tax incidence theory, helping us to sort out who will bear the brunt of the tax burden. Now, why really might we implement such a policy? For that, we turn to the public choice aspects of public economics: which interest groups come into play, how the costs and benefits of the policy are distributed, and how the institutional structures of an MMP parliamentary system affect outcomes. This course will examine these three facets of public economics in taxation, expenditure and other public policies. Efficiency-based methods of analysis will also be contrasted with alternative approaches.

Learning Outcomes

Students will:

• Learn core principles of public finance and public choice.
  
• Be able to analyze the merits of economic policies
  
• Understand the political processes generating policy outcomes.

Course Content

• Intro to public finance and public choice
  
• Emergence of Government
  
• Collective choice mechanisms
  
• Legislative
  
• Tax Theory
  
• Democracies and interest groups
  
• Rent Seeking
  
• Bureaucracy and Regulation
  
• Size and Scope of government

Compulsory Reading Materials

• Cullis, J. and P. Jones. 1998. Public Finance and Public Choice Second Edition. Oxford University Press. (Henceforth referred to as Cullis and Jones).
  
• Mueller, D. 2003. Public Choice III. Cambridge University Press (Henceforth referred to as Mueller).
  

 Optional Reading Materials

• Myles, G. 1995. Public Economics. Cambridge University Press (Henceforth referred to as Myles).
  
• Winer, S. and H. Shibata. 2002. Political Economy and Public Finance: The Role of Political Economy in the Theory and Practice of Public Economics. Edward Elgar. (Henceforth referred to as Winer and Shibata)