Public Finance and Budgeting

Catalog description

This course provides an overview of taxation and expenditure choices made by government as essential inputs into the policy process. How big should government be? What is a good source of revenue? What is a good expenditure? The course examines and compares how different theoretical and disciplinary approaches to fiscal analysis -- economics, political science, and public administration -- answer these questions. In addition to examining the question of the overall size and growth of the public sector and the governmental institutions responsible for fiscal choices, public expenditures will be evaluated from the perspectives of public goods theory (market failure and non market failure), rational budgeting theory and the development of budget proposals, incremental theory, and democratic theory. Revenue choices will be examined through the lens of both normative tax theory on the criteria of adequacy, stability, efficiency, and equity, and positive theories of taxation that address how taxes are actually adopted and altered by governments. An understanding of tax incidence is central to several of these criteria. The course will also examine the balance of government revenues and expenditures by examining the sources, financing, and consequences of government debt and the use of capital budgets. The course will be especially attentive to how policy professionals apply these varied theoretical approaches to answering these questions. The goal of the course is to enable students to become conversant both with the many conceptual languages in which government taxation and budgeting issues are debated and to prepare them for professional positions in which revenue and expenditures are essential instruments in the formulation and implementation of public policy.