Event

The course Introduction to Public Finance provides an overview of the fundamental issues in public economics. The first part of the course deals with normative theories about the economic role of the state in a market economy. Welfare economics theory is offered as a base model, with which alternative normative theories are compared and contrasted. Within this theoretical framework, arguments concerning efficiency and equity are developed as justification for varying degrees of economic intervention by the state. The second part of the course deals with the positivist theory of public economics. Processes of public decision making are examined and the conditions that lead to market failures resulting from collective action problems are discussed. The third part of the course examines a variety of public spending programs, including social security systems, the public education system, and programs aimed at reducing poverty. The fifth part of the course addresses the key theoretical and political issues associated with fiscal federalism.

Learning goals:

Students are able to:

• critically assess the economic role of the state in a market economy
• explain and discuss key concepts in public finance, including: public goods; economic externalities; and market failure
• explain and critically discuss competing theoretical approaches to public finance, including welfare economics and public choice theory
• explain the theory of bureaucracy according to Weber and critically assess its strengths and weaknesses
• evaluate the incentives inherent in the bureaucratic model, as well as the more recent introduction of market-oriented incentives associated with public-sector reform

Workload:

The total workload for this course is approximately 135.0 hours. For further information see German version.