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Southeast Missouri State University

EC 470. Public Sector Economics.

EC470 Public Sector Economics
SOUTHEAST MISSOURI STATE UNIVERSITY
Department of Economics and Finance
COURSE SYLLABUS, EC470, PUBLIC SECTOR ECONOMICS


I. Catalog Description and Credit Hours of Course

The financing of national, state and local governments.. (3)

II. Prerequisite(s)

Minimum grade of "C" in MA134, EC215 and EC225

III. Purposes or Objectives of the Course

A. To acquaint the student with the major sources of revenue and major classes of expenditure at federal, state and local levels.

B. To inquire into the causes of the rapid rise in government spending.

C. To examine the concepts of fiscal efficiency and equity and their applicability to actual spending and taxation policy.

D. To examine problems relating to the regulation of business and to public enterprises.

E. To relate fiscal policy to economic stability and growth.

IV. Expectations of Students

A. Regular class attendance.

B. Understanding of assigned reading materials.

C. Participation in class discussion.

V. Course Outline

A. Introduction

1. The no-government economy

2. The all government economy

3. Types of market failure

4. Overview of the public sector in the U.S.

B. Social Welfare Functions

1. Rawlsian - maxi-min.

2. Utilitarian

3. Equity-efficiency tradeoff

C. Public Expenditure Theory

1. Private provision of private goods

2. Private provision of public goods

3. Public provision of public goods

4. Public provision of private goods

5. Externalities and common property resources

6. Allocation mechanisms for public goods

a. voting

b. The Tiebout model

7. Applications

a. Health care

b. Defense

c. Education

d. Social insurance

e. Welfare programs

D. Taxation Theory

1. Qualities of a "good" tax

2. Equity - tax incidence

3. Efficiency

a. Consumption taxes

b. Labor taxes

c. Optimal taxation

E. The U.S. Tax System

1. The personal income tax

2. The corporate profits tax

3. Taxation of capital

F. Further Issues

1. Fiscal Federalism

2. Grants

3. Deficits, stability and growth

VI. Textbook(s) and/or Other Required Materials or Equipment

Public Finance, Rosen, Harvey, 3rd Edition, Irwin, 1992

VII. Basis of Student Evaluation

Performance on exams, including the regularly scheduled final, quizzes, assignments, reports, or other activities.

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