Academic Year:
2022/23
23171 - Principles of Public Economics
Teaching Plan Information
Academic Course:
2022/23
Academic Center:
304 - Faculty of Law and Economics
332 - Faculty of Economic and Business Sciences
Study:
3041 - Double bachelor's degree programme in Law and Business Management and Administration / Economics
3325 - Bachelor's degree in Economics
Subject:
23171 - Principles of Public Economics
Ambit:
---
Credits:
5.0
Course:
418 - Bachelor's degree in Economics: 4
412 - Bachelor's degree in Business Sciences: 4
418 - Bachelor's degree in Economics: 3
412 - Bachelor's degree in Business Sciences: 3
417 - Bachelor's degree in Business Management and Administration: 3
417 - Bachelor's degree in Business Management and Administration: 4
523 - Double bachelor's degree programme in Law and Business Management and Administration / Economics: 6
Teaching languages:
Theory: | Group 1: Catalan |
| Group 2: Spanish |
| Group 7: English |
Seminar: | Group 101: Catalan |
| Group 102: Catalan |
| Group 103: Catalan |
| Group 201: Spanish |
| Group 202: Spanish |
| Group 203: Spanish |
| Group 701: English |
| Group 702: English |
| Group 703: English |
Teachers:
Guillem Lopez Casasnovas, Luis Andre Pinheiro de Matos , Rodrigo Carril Mac Donald
Teaching Period:
First quarter
Schedule:
Presentation
The subject “Principles of Public Economics” offers, at an intermediate level, the principal concepts and implications of the State intervention in the economy. Its objective is to analyse the rationality of that intervention from an efficiency and equity point of view, and their effects on the economy and the improvement on Social Welfare, as well as evaluating the instruments that better serve that goal. Along the course the fundamental theorems of welfare economy are developed. Principal market failures are analysed, jointly with the proper instruments of intervention in function of each case: in spending (direct production, outsourcing, transferences), in revenues (taxes and public prices in their typology and economic effects), and as a whole regarding the financial operations, budgetary activity and public regulation. Finally virtual efficiency and equity are presented and also the coordination problems when public sector intervenes through multijurisdictional tax offices, according to their international and territorial aspects of fiscal federalism.
Narrative: Preface to highlight the importance of public sector on the resources allocations: visible hand allocates and reallocates half of GDP in most of countries. Often, this is not turned into the study of the algorithm which must manage this visible hand.
To do so, it is expected to teach the basics, first, introducing the topic by the side of market failures, where improvements on efficiency thanks to public intervention are verified in those cases through the recovering of deadweight losses in welfare. We emphasize the importance of the intervention instruments: it is not only about “what” but also about “how” to do this intervention. Beyond the justification of the first theorem, the second refers to redistribution according a determined social welfare function. How to build it and which are the principal instruments are anticipated here in order to do a detailed analysis after. Finally, in this first part we will remind that the objectives and means are combined in a determined context of public choice in which social preferences must get through the filter of political democratic representation and bureaucracies that have to put them in place. So, in opposition to what happens in a market economy and the free private willingness to pay, in which if anybody buys a good it is worth what it is paid for it, because otherwise nobody would buy it. In the public sector, the good value for money demands for explicit techniques of cost-benefit and cost-effectiveness, in which between the objectives we find something more than the own goals of financial evaluation (basically issues of efficiency and equity), and among the means, legal restrictions given that not everything is allowed.
The other parts of the program emphasize the instruments, of regulation (which are barely mentioned), and, in particular, budgetary: a part in spending programs and their modalities (in kind, monetary, hybrid, compensatory, global, conditioned or not), and a part in revenue (modalities also and effects of taxes on personal income, of the society and on consumption=. Finally, the program ends up by reminding that most of tax agencies show a distribution of competences in favour of more than one jurisdiction (we call it “multijurisdictional tax agencies”), either supra-national (let’s say Europeans) or infra (autonomous community level). Who is better to do what? is, consequently, the topic of study to close the subject.
Associated skills
General competences:
1. Analytical and synthesis skills.
2. Ability to identify economic problems (using simple economic models) and the potential trade-offs arising in their resolution.
3. Ability to independently find information (databases, media, etc.) in order to build an argument using available evidence.
4. Ability to participate actively in lectures and seminars (know how to intervene, to listen and acquire oral and written communication skills), keeping an open mind.
5. Ability to understand and critically analyze the current economic events, as they are covered in the media.
6. Ability to work individually (reading material for the course, solving exercises, doing empirical research, etc.).
7. Ability to apply public economic concepts in practice (solving case studies and analysis of economic news and current events).
8. Research skills (search databases and academic journals, in order to expand your knowledge in the field).
Specific competences:
1. Understanding of the public economic concepts of the course.
2. Ability to identify and solve economic problems.
3. Ability to understand and use economic models
4. Ability to relate the analysis of socio-economic problems with the objectives and the main instruments of economic policy.
5. Ability to search information in order to increase your knowledge of the topics discussed.
Sustainable Development Goals
SDG 1: No Poverty
SDG 8: Decent Work and Economic Growth
SDG 10: Reduced Inequalities
Contents
FIRST PART
Topic 1. The first goal of government intervention: addressing market failures
Topic 2. The second goal of government intervention: redistribution of resources
When the market is efficient, but the resulting distribution of resources is not socially desirable, the government intervenes in order redistribute resources.
Topic 3. Why do governments choose to intervene in the way that they do: Public choice and the formation of collective decisions
SECOND PART
Topic 4. Public expenditures: main tools
Topic 5. Some public spending programs
THIRD PART
Topic 6. How to finance public expenditures: efficiency; tax incidence, and optimal taxation
Topic 7. Taxation in practice: analysis of the main economic effects of some taxes
FOURTH PART
Topic 8. Fiscal federalism
SEMINARS
Seminars’ content is detailed in the following table. There will be a seminar session for each of the mentioned topics, and one session to correct the midterm exam. One week before of each seminar, the content of the seminar and the required material to prepare it will be uploaded to the Aula Global.
Title
|
Topic
|
Public spending in the Welfare State (Social Spending)
|
1, 2, 4 and 5
|
Design of public spending programs
|
4, 5
|
Taxation I
|
7
|
Taxation II
|
7
|
Progressivity and inequality indicators
|
4-7
|
Activities Program
Week
|
Theory Classes
|
Seminars
|
Week 1
|
Introduction
+
Topic 1
|
|
Week 2
|
Topic 1 (cont.)
|
|
Week 3
|
Topic 2
|
|
Week 4
|
Topic 3
|
Seminar 1
|
Week 5
|
Topic 4
|
Seminar 2
|
Week 6
|
Topic 5
|
Seminar 3
|
Week 7
|
Topic 5 (cont)
|
Seminar 4
|
Week 8
|
Topic 6
|
Seminar 5
|
Week 9
|
Topic 7
|
Seminar 6
|
Week 10
|
Topic 8
|
|
Teaching Methods
The methodology of the course is based on student autonomy. Students must provide a systematic and continuous effort, guided by the professor and the teaching assistant. Thus, the course combines activities performed in the classroom with activities that students must carry out their own, either guided or independently. Specifically, students are expected:
1. To read and critically think about the readings and material made available for classes.
2. To complement the content presented in lectures and the readings analyzed in seminars by using the recommended bibliography.
3. Dedicate specific effort in order to identify and summarize the most important point of each reading.
4. Ask questions and talk to the teacher if they have difficulties understanding of the topics, before and/or during lectures and seminars.
5. Attend all classes.
6. Participate during lectures and seminars.
7. Hand-in all the homework (studies and exercises) assigned before the seminars in which they are discussed.
For their part, teachers are expected:
1. Present the main points of each topic in class and answer questions of the students regarding the understanding of the topic.
2. Assess the level of understanding and knowledge of the material, asking several students at random questions on the readings, case studies and other course materials, in each class or seminar.
3. Illustrate the application of theoretical material through exercises and case studies.
Evaluation
Evaluation Method
The course is based on the principle of continuous assessment, with an important weight put on the acquisition of knowledge and skills.
1. For this purpose, participation in classes and seminars, as well as individual analysis of exercises and cases represent 30% of the total (this first part of the final grade is referred to as the “continuous evaluation” for participation in class/seminars), while the final exam accounts for 70% (this second part of the final grade is referred to as “exam”). The final exam can include topics seen at the “continuous evaluation” part.
2. In order to pass the course (and compute the weighted average of the continuous evaluation and the final exam grade), the student must obtain a minimal grade in both the continuous evaluation *and* the final exam, which will be determined by the lecturers. Also, to pass the course the student must obtain a final grade equal or superior to 5.0. If the continuous evaluation grade was below the passing level, it may be compensated at the discretion of the professor to facilitate attendance to the final exam, stating the new minimum grade that must be obtained in the final exam to make the compensation count.
Students who attended the course but fail can take the re-sit (recuperació). In this case, students have to attend the part(s) of the re-sit corresponding to the part(s) of the course that they failed: continuous evaluation, exam or both (see paragraph below on the re-sit exam rules).
3. Attendance at seminars and participation is required to get a grade for a seminar (i.e., hand-in the homework without attending the seminar will result in a grade of 0 for the seminar). Seminar attendance without participation does not ensure any minimum grade (i.e., if a student attends but does not participate, she/he may fail in the “continuous evaluation”). One needs to participate appropriately to ensure good grades: handing in the work and attending without participating is not sufficient to pass the “continuous evaluation” part.
4. Approved partial grades are not saved (exam or participation/seminars) for subsequent academic years.
5. There will be a mid-term test, which will serve both the teacher and the students to assess the understanding of the topics. The mid-term will not have any negative impact on the final grade of the course. Only in case of a good grade this would count as evidence of good participation affecting positively to the seminars grades and class participation), in case of failure there will be no effect on the final grade. The date for this midterm exam will be on November the 3rd. Correction will be done at class or in the corresponding seminar session, there will be no right to individual revision.
Specific office hours will be scheduled prior to the mid-term and the final exams. The purpose of these office hours will be to answer specific questions of students who regularly attend lectures and seminars.
6. In order to be able to take the final exam, a student must have a minimal grade in the “continuous evaluation” part, which will be determined by the lecturers. The goal doing this is to allow for joining the exam those who failed seminars but may compensate their overall grade of the subject. A grade lower than 5 in the seminars, but high enough to be considered eligible to take the final exam will indicate which extra effort in terms of final exam grade will have to be put by the student. The grades for “continuous evaluation” will be announced at least one week before the final exam.
7. According to the regulations for courses taught in English, students will take all the exams (instructions, questions and answers) exclusively in English.
8. Exceptions for Erasmus students: those that have a justified reason to not attend the Seminars will be allowed to have the 100% of the grade coming from final exam. But the content of the exam will include all theory topics and also seminars’ content.
Rules for re-sit exam
The re-sit exam will take place on the date scheduled in the academic calendar (the date will be published in Aula Global). A student can take the re-sit exam if and only if she/he has participated in the teaching and evaluation activities of the course during the term, but has failed to pass the course. Students who did not participate in such activities or have cancelled their participation in the evaluation of the course cannot take the re-sit exam.
It is considered that a student has participated in the teaching and evaluation activities of the course when:
- She/he has participated in the continuous evaluation of the course, handing-in the work and assisting to at least 50% of the seminars and participating in the other activities mentioned in the syllabus of the course (except for duly justified reasons).
- She/he has done the final exam.
The re-sit exam is only for students who attended and participated in the activities of the course, but failed. Students who attended the course and passed with a final grade equal or superior to 5.0 cannot take the re-sit exam.
A student who participated in the teaching and evaluation activities of the course, but failed, can take the re-sit exam for the parts of the course that he initially failed during the term: continuous evaluation, exam, or both; but the student cannot take the re-sit for a part of the course for which her/his initial grade is already higher than 5.0 (the initial grade will be kept). The re-sit exam will therefore consist in two parts, the first part corresponding to the re-sit for continuous evaluation and the second part corresponding to the re-sit for the exam (although this may include questions about material covered during seminars).
Finally, in order to encourage student mobility, students who took the course during the term but are studying abroad and cannot attend the re-sit exam have to contact in advance the professor responsible for the course in order to opt for an alternative exam that will take place in July. Exceptionally, if the student studying abroad cannot attend the July exam for justified reasons, an alternative date or an alternative evaluation will be arranged, under the supervision of the professor responsible for Public Economic courses at UPF and with the agreement of the coordinator of student mobility at UPF. This particular disposition only applies to students who participate in a mobility program recognized by the University.
Bibliography and information resources
Main Textbook
STIGLITZ, J. and ROSENGARD J.K. Economics of the Public Sector, 4th edition, W.W. Norton and Company, 2015.
Additional Textbooks
GRUBER, J. Public Finance and Public Policy, 2Nd edition, Worth Publishers, 2012.
ROSEN, H. S and GAYER T. Public Finance, 10th. edition. McGraw Hill, 2014.
HILLMAN, A. Public Finance and Public Policy. Ed. Cambridge, 2009.
CULLIS J. and JONES P. Public Finance and Public Choice. Ed. McGraw-Hill. 1992.
Spanish textbook: ALBI, E.et al., Economía pública I; Economía pública II. 3rd ed. Barcelona: Ariel Economía, 2009.
Other resources
Additional material will be available through Aula Global. Specific material for each seminar will be posted on Aula Global before the seminar.