Syllabus
• Introductiono Four questions of public financeo Facts on governments around the worldo Why study public finance now?• Economic Rationale for the Government o Efficiency of the marketso Market failureso Distributive justiceo Paternalismo Efficiency equity trade-off• Public goodso Types of public goodso Efficient provision of public goods• Public choiceo Votingo Majority rule• Government Bureaucracyo Principal agent problemo Rent-seeking• Externalities o Private solutions to externalitieso Public solution to externalities• Expenditure programso Educationo Pension systemso Health care and health insurance• Financing public programso Taxation and economic efficiencyo Tax incidenceo Government borrowing• Choice of taxationo Optimal taxation - Ramsey rule, equal sacrificeo Capital and other tax bases
Annotation
The course deals with standard public finance topics: we start with an introduction to the economic rationale for government. The major part of the course is then devoted to the theory of taxation, i.e. how taxes influence economic activities and analysis of public expenditure theories, namely public choice theory.
We conclude with an overview of literature and empirics on the globalization and Internet effects on the tax systems worldwide.