Main topics of study:

PART A: Market Failure

Economic Rationales for the State

• Competitive Equilibrium
• Efficiency
• Pareto Principle
• Interpretations
• Further Rationales

Equity and Efficiency

• Equality and Efficiency
• Social Choice
• Social Welfare Functions
• Consequentialism
• Marginal Cost of Public Funds

Public Goods

• What are Public Goods?
• Optimal Provision
• Market Failure
• Government Intervention
• Government Provision of Public Goods

Externalities

• Externalities and Market Failure
• Solutions to the Externality Problem
• Commons and Congestion

Asymmetric Information

• The Value of Insurance
• Principal and Agent
• Agency and Government

Cost Benefit Analysis

• Potential Pareto Improvements
• Opportunity Costs and CBA Fundamentals
• Risk of Estimating Benefits
• Cost-Benefit Analysis in Practice
• Cost-Effectiveness Analysis

PART B: Public Choice

Public Choice

• Democratic Process
• Public Choice Mechanisms
• Inefficiency with Majority Rule

Government Failure

• Agency Problems
• Monopoly Bureaucracy
• Rent Seeking
• Comparing Institutions
• The Political Marketplace

PART C: TAXATION

Taxation

• Tax Systems
• Taxes in Countries
• Current Issues
• Budgetary Process

Tax Incidence and Efficiency

• Incidence and Partial Equilibrium
• General Equilibrium Incidence
• The Costs of Taxation
• Optimal Taxation

Intertemporal Issues

• Intertemporal Choice and Taxes
• Debt and Government Budget Constraint
• Long-term Consequences of Tax Policy

Taxes on Labour

• Modelling Labour Supply
• Income Tax and Inefficiency
• Transfer Payments and Labour Supply

PART D: The Welfare State

Income Inequality

• Measuring Inequality
• Practical Issues
• International Comparisons and Recent Trends
• Explaining the Trends
• Fundamental Causes

Poverty

• Defining Poverty
• Measuring Poverty
• Recent Trends in Poverty
• Changing Nature of Poverty

Social Insurance and Welfare State

• Social Insurance
• Market Failure and Social Insurance
• Welfare State and Social Insurance in Practice
• Crisis in the Welfare State

Social Policy

• Policies to Combat Poverty
• Welfare State in the UK
• Welfare Reform
• Current Welfare System
• Citizenship and the Welfare Stat

Pensions and Ageing

• Pensions
• Market Failure and Equity
• Demographic Time Bomb
• Pensioner Poverty
• Changing Face of Society
• Care and the Elderly

Healthcare

• Economics of Healthcare
• Market Failure and Healthcare
• Healthcare Systems and their Weakness
• Health Expenditure Escalation
• Quasi markets and the Reform of Healthcare Systems

Education and Training

• Optimal Investment
• Market Failure
• Reform of Education
• Student Finance

PART E: Regulation and the Boundaries of the State

Privatisation and Social Ownership

• Public or Private Ownership
• Ownership
• Incentives and Efficiency
• Privatisation Process
• Impact of Privatisation

Regulation and Competition Policy

• Theory of Regulation
• Regulation and Privatisation
• Regulatory Bodies
• Regulation of Privatised Industries in Practice

The Environment

• Equity and Environment
• Market-based Instruments and Environmental Policy
• Roads and the Environment
• Transboundary Pollution and the Global Commons
• Global Warming

Federal Issues and the European Union

• Layers of Government
• The European Union
• The Assignment Problem

Reading List

Main Text:
Sara Connolly and Alistair Munro, Economics of the Public Sector (Pearson Education, 1999, ISBN 013096641X)