COURSE CONTENT
Lecture One: Introduction and the nature of public finance
- Definition of public finance
- The scope of government activities
- The needs for public sector
- Reasons why government should participate in economic activities
- Models of efficient allocation and Measuring the size of public sector
- The size of the public sector
- The principles of maximum social benefits
Lecture Two: Public policy objectives
- Introduction
- Public sector objectives (the allocation function; public provision of social goods; the distribution function; fiscal instruments of distribution policy; the stabilization function)
- Instruments of stabilization policy
- Coordination and conflict of interest.
Lecture Three: Public goods
- Properties of public goods
- Difference between public goods and private goods
- Comparison between efficient provision of public and private goods
Lecture Four: Market failure and the rationale for government intervention
- Sources of market failure (Imperfect markets; costly information; externality as a cause of market failure)
- Implications of externalities for allocation efficiency
- Solutions to externalities
Lecture Five: Public expenditure
- Definition of public expenditure
- Canons public expenditure
- Reasons for the growth of public expenditure
- Restraints to the growth of public expenditure
- Consequences of the growth of public expenditure
- Effect of public expenditure
- Public expenditure and economic stability in advanced economies
- Theoretical aspects to public expenditure evaluation
- Types of public projects; types of benefits and costs; shadow pricing and market item; decisions involving long-term projects; choice of discount rate; capital budgeting techniques
Lecture Six: Budget
- Canons of budgeting
- Types of budget
- Incremental budgeting
- Zero base budgeting
- Performance and programming budgeting system
Lecture Seven: Taxation as a source of revenue
- Canons of good tax system
- Approaches to equity
- Benefit principle
- Ability to pay as basis for taxation
- Categories of taxes
- Shifting and incidence of tax
- Magnitude of tax burden
- Types of tax incidences
- Effects of tax incidence on market for goods
- Other factors that affect effective incidence of tax
Lecture Eight: Alternative sources of public revenue
- Theory of Public debts
- Classification of public debt
- Why is public debt incurred
- Sources of public borrowing
- Economic effect of public borrowing
- Effects of public debt
- Burden of internal and external debt
- Redemption of public debt
- Public borrowing requirement
- Government induced inflation
Lecture Nine: Privatization
- Mechanism of privatization
- Case for privatization
- Case against privatization.
