PUBLIC SECTOR ECONOMICS
The purpose of the course is to provide the students with the basic theoretical elements in order to analyze the public sector economy and its interactions with the private sector. Focus is on the macroeconomic and microeconomic aspects that explain public intervention in the economic system through budgetary and / or regulatory policies; taxation and public supply of private goods.
Expected learning outcomes
Knowledge and understanding: the student should demonstrate the knowledge of the main analytical tools to analyze from the economic point of view the scope and aims of public sector intervention in market economies as a response to market failures.
Applying knowledge and understanding: the student should demonstrate that he has understood the acquired theoretical knowledge on the role of the public sector in allocating and redistributing the economic resources. He should also reveal the ability to combine the theoretical knowledge with operational skills , both in the interpretation of specific economic policy interventions by the deputy institutions and in the understanding of resource management tools implemented nationwide in the various sectors (health, education, pensions, care ...).
Making Judgments: the student should show his ability to provide independently an assessment of public intervention policies aimed at achieving a redistribution of economic resources on the basis of the principles of fairness and efficiency.
Communication: the student should reveal the ability to use the economic terminology in order to discuss on the topics of the written exam questions for the final exam as well as to present the seminar discussions that will take place during the lessons.
Lifelong learning skills: the student should acquire a learning ability to make him able to obtain updates through the consultation of scientific texts and publications on the role of the public sector in the management of economic resources, which are applicable to subsequent studies in the following university course.
For an adequate understanding of the contents of the course, it is necessary to acquire and assimilate the knowledge of the fundamental concepts of microeconomics and macroeconomics.
I Module – Public sector and market (18 hours of lesson)
The public economy: definition elements. The role of the state in a mixed economy. The balance between the public sector and the private sector. Public sector analysis. Market efficiency. Fundamental theorems of the welfare economy. Efficiency in exchange. Efficiency in production. Efficiency in product composition. Market failures.
II Module – Public choices (18 hours of lesson)
Analysis of the social choices. Measure of benefits. Measure of inefficiency. Public goods and market failure. Private goods provided by the public sector. Efficency conditions for public goods. Public al location mechanism for the economic resources. Alternative schemes to determine public goods spending.
III Module –The role of the State in the production of goods and interventions aimed to control externalities (18 hours of lesson)
Natural monopoly and public production of private goods. Sources of inefficiency in the public sector. The problem of exsternalities. Private solutions to externalities. Economic failure of private solutions. Public remedies to externalities. Environmental protection: the role of the state in practice.
IV Module – The taxation system (18 hours of lesson)
Introduction concepts to the tax system: the five desirable features. A general scheme for choosing between taxation systems. The impact of taxes on perfectly competitive markets. Incidence of taxes on non-competitive markets. The effect of taxes on consumers. Quantify distortions. The effects of taxes on producers. Saving Taxes. Income tax on labour.
The course is conducted through frontal lessons during which the topics of the program will be analyzed. During the lessons, students are discussing seminars on specific cases of policy interventions and business strategies.
- Stiglitz Joseph E. (2003) Economia del Settore Pubblico, Volume primo- Fondamenti teorici, seconda edizione. Editore Ulrico Hoepli, Milano
The objective of the exam is to assess the level of achievement of the objectives. The exam consists of a structured written test with open, argumentative and analytical questions aimed at assessing the degree of in-depth general theoretical knowledge. Students will have to answer the questions by showing the ability to expose the technical contents, definitions, and basic concepts acquired with their study appropriately in terminology, and to know graphically the main macroeconomic and microeconomic models presented during the course. The written test consists of 6 questions.