Module leader

Michela Redoano

Information on Restrictions and Pre- and co-requisites, Teaching Format, Academic Aims, and Learning Objectives can be found in the module thumbprint.

CATS points

This module is available at 15 CATS.

Context

This module will available as an option for final-year students on the following Economics based degree programs: L100, L116, LV13, L1MD (Economics major and Politics and International Studies major), V7ML, V7MP and V7MR. To do this module, students should have previously taken either EC204 or EC201/EC202.

Teaching format

2 lectures/classes per week

Assessment methods

1 x problem set (20%) AND 1.5 hour examination (80%)

Academic aims

The module aims to: (i) provide a firm foundation of knowledge; (ii) equip students with tools of analysis; (iii) enable students to develop the ability to apply the knowledge and skills they have acquired to the solution of selected theoretical and applied problems in the economics of taxation and of public expenditure, and in aspects of political economy.

Syllabus

This course is concerned with understanding the role of government in the economy through taxation, expenditure and regulation. This course will cover both the classic topics in this area, such as the provision of public goods, the design of taxation, and inter-generational distribution, as well more modern themes. In particular, we will focus on three of these. First, we will look at the political economy approach to public finance, which stresses that governments are not benevolent dictators, but take decisions via a political process, and thus may themselves take inefficient decisions; thus, we should be aware of “government failure” as well as market failure. Second, due to globalization, the international dimension in government decision-making is becoming more important, especially on the tax side, with issues of mobile tax bases and tax competition. Third, many countries (although, so far, notably, not the UK) are undergoing a process of fiscal decentralization; we will examine the fiscal relationships between central and local government, a topic known as fiscal federalism.

Illustrative reading

J.Hindriks and G.Myles, Intermediate Public Economics, MIT Press, 2006

J.E Stiglitz Economics of the Public Sector, 3rd edition, Norton, 2000