Unit 2514: Public Economics

1. Introduction to Public Economics

• Definition and scope of public economics
• Role of government in the economy
• Types of government intervention: regulation, taxation, subsidies, provision of public goods
• Importance of public goods and externalities

2. Economic Efficiency and Market Failures

• Concept of economic efficiency: allocative and productive efficiency
• Market failures:
  • Externalities (positive and negative)
  • Public goods
  • Imperfect competition
• Government intervention to correct market failures:
  • Taxes and subsidies
  • Regulation
  • Provision of public goods

3. Public Goods and Common Resources

• Characteristics of public goods: non-excludability and non-rivalry
• Common resources and the tragedy of the commons
• Challenges in market provision of public goods and common resources
• Policy options:
  • Government provision and financing
  • Property rights and privatization
  • Regulation and quotas

4. Taxation and Redistribution

• Principles of taxation: equity, efficiency, simplicity, and transparency
• Types of taxes: income, consumption, property, and wealth taxes
• Tax system design: progressive, regressive, and proportional taxes
• Trade-offs between equity and efficiency
• Role of taxation in income redistribution and social welfare

5. Social Insurance and Welfare Programs

• Economic rationale for social insurance
• Key programs: unemployment insurance, social security, healthcare
• Impact on income distribution and poverty alleviation
• Moral hazard and adverse selection concerns
• Evaluation of effectiveness and sustainability

6. Government Budgeting and Fiscal Policy

• Government budgeting process and types of budgets
• Fiscal policy tools: government spending, taxation, borrowing
• Fiscal policy objectives: economic stabilization, growth promotion
• Short-term vs long-term fiscal policy effects
• Budget deficits and public debt considerations

7. Public Choice Theory

• Overview of public choice theory
• Behavior of voters, politicians, and interest groups
• Collective decision-making and voting systems
• Rent-seeking and lobbying
• Implications for public policy and government efficiency

8. Environmental Economics and Sustainability

• Economic analysis of environmental issues
• Externalities related to the environment
• Government roles: regulation, Pigouvian taxes, tradable permits
• Sustainable development concepts
• Policy design to protect natural resources and promote sustainability

9. Globalization and International Trade

• Effects of globalization on public economics
• Role of trade policies and tariffs
• International agreements and organizations (WTO, IMF, etc.)
• Economic integration and its impact on domestic policies
• Challenges and opportunities for government policy in a global economy