This course uses the basic tools of microeconomics to analyse the role of government and the rationale for and design of taxation and  expenditure policy. The topics to be covered include a review of basic microeconomics, welfare economics, cost-benefit analysis,  public goods,  externalities,  public choice, public expenditure programs (including education, health, pensions and welfare payments),  and taxation (including efficiency and equity issues, tax incidence, Australian tax policy, and fiscal federalism). By the end of the course students should have an appreciation of the principal forms of market failure that provide a justification for government intervention, be familiar with the main policy instruments used to mitigate market failures and the principles that guide their optimal use, but also understand the limitations of government intervention - for instance, understand how the presence of information problems both explains the forms that policy intervention take and imposes limits on what can be achieved by it. The course also covers topics on public choice and provides an alternative, more critical, view of government. The public choice perspective places more emphasis on modelling the political process and argues that this, like the market mechanism, has readily identifiable sources of failure.
 

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

Upon successful completion of the requirements for this course, students should be able to:

• Identify and explain the principal forms of market failure that provide a justification for government intervention;
• Describe the main policy instruments used to mitigate market failures and explain the principles that guide their optimal use;
• Explain the limitations of government intervention - for instance, illustrate how the presence of information problems both explains the forms that policy intervention take and imposes limits on what can be achieved by it.
• Identify the trade-offs captured by public economics models; including the assumptions, relevance, and limitations of those models 
• Analyse policy problems and assess arguments appearing in the policy debate.
• Distinguish the normative and the positive approaches to public economics and, in particular, identify and explain public choice models of government

Research-Led Teaching

The course will cover recent research in the area of public economics. Recent papers on taxation, education, social security, among other topics, will be provided in Wattle, often as suggested optional readings. When feasible the main findings of those papers will be discussed in class. 

Examination Material or equipment

The permitted materials at the examinations are non-scientific calculators. You will also be able to check the permitted materials at the examination at http://timetable.anu.edu.au/exams/ when the examination date and location will be announced.

Required Resources

For lectures: Rosen, H. and Gayer, T. (2014), Public Finance (10^th edition), McGraw-Hill.

For Honours/Graduate seminars: Hindriks, J. and Myles, G.D. (2013), Intermediate Public Economics (2^nd edition), MIT Press (Available as eBook in the ANU Library).

Prescribed and recommended texts will be placed on the Reserve Collection (see other information section below for further details).

Recommended Resources

For lectures:

• For public economics:
•  Abelson, P. (2012), Public economics: principles and practice (3^rd edition), Mc-Graw Hill.
•  Stiglitz, J.E. and Rosengard, J.K. (2015), The Economics of the Public Sector (4th edition), W. W. Norton.
• For mathematical techniques: Sydsaeter, K. and Hammond, P. (2006), Essential Mathematics for Economic Analysis, Prentice Hall (Pubs).
• Your existing microeconomics text will also be useful for some topics.

For Honours/Graduate seminars:

• Hillman, A.L. (2003), Public Finance and Public Policy: Responsibilities and Limitations of Government, Cambridge University Press.
• Mueller, D.C. (2003). Public Choice III, Cambridge University Press.

Prescribed and recommended texts will be placed on the Reserve Collection (see other information section below for further details).

Staff Feedback

Students will be given feedback in the following forms in this course:

• The solutions to assignments and mid-semester exams will be covered in class.
• Written comments, if relevant, will be included in the assignments returned to students.
• Verbal comments, if necessary, will be provided during consultation time.

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Other Information

Announcements

Students are expected to check the Wattle site for announcements about this course.

Workload

Students taking this course are expected to commit at least 10 hours a week to completing the work. This will include:

• 2 hours a week: lecture;
• 1 hour a week: tutorial;
• 1 hour a week: Honours/Graduate seminar;
• About 6 hours a week: reading, research, writing, lecture, seminar and tutorial preparation.

Course delivery

• Students enrolled in ECON2132 Public Sector Economics (H), ECON4434 Public Sector Economics (4^th year Honours) and ECON8034 Public Sector Economics (G) attend the two-hour lecture and one-hour tutorial per week together with ECON2131 Public Sector Economics (P) students (check the ANU timetable for details on dates, times and locations). Tutorial meetings start in week 2 (see tutorial registration details above).
• In addition, there will be a one-hour Honours/Graduate seminar per week, starting in week 1, to cover additional Honours/Graduate material (check the ANU timetable for details on dates, times and location). Required reading and questions for the Honours/Graduate seminars will be available in Wattle. It is expected that students read the material to be covered and attempt the questions in advance in order to be able to actively participate in the Honours/Graduate seminar meetings.

Required and recommended readings

Tables including required and recommended readings for both lectures and Honours/Graduate seminars will be provided in Wattle.

Other relevant information

• Handouts, in the form of brief PowerPoint presentations, will be provided before the lecture. Occasionally, more detailed documents will be provided for topics for which this is deemed necessary. All these documents will be available in Wattle.
• Students should note that the PowerPoint handouts are to be regarded as a guide to the referenced material. The required reading is given in the last page of each handout. Students should consult these references.
• The prescribed text for lectures - Rosen and Gayer (2014) - is available in the on campus bookstore. The prescribed text for Honours/Graduate seminars - Hindriks and Myles (2013) - is available as eBook in the ANU Library. Prescribed and recommended texts will be placed on the Reserve Collection, usually on 2-day loan (except for a copy of the prescribed text which I have requested to be placed on a 2-hour loan). A text on mathematical techniques has been included for those who might need it. It is the policy of the library to place texts on 2-day loan by default unless a high utilization rate is observed. If there is high demand for a text, it is automatically transferred to the 2-hour loan. This means that students should preferably seek these references well in advance in order to facilitate the efficient use of resources. There is a link to the Reserve Collection in Wattle.
• The email addresses provided are to be used when you need to contact the lecturer/tutor/administrator about administrative matters (i.e. they are not to be used for instructional purposes). When you have questions about the course material, please consult your regular tutor or lecturer in person.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Lecture 1 - Topic 1: The public sector in a mixed economy Honours/Graduate Seminar 1 - Honours/Graduate Topic 1: An introduction to public choice, Arrow’s impossibility theorem and majority rule (I)
2	Lecture 2 - Topic 2: The economic rationale of government Honours/Graduate Seminar 2 - Honours/Graduate Topic 1: An introduction to public choice, Arrow’s impossibility theorem and majority rule (II) Tutorial 1
3	Lecture 3 - Topic 3: Welfare economics: efficiency and equity Honours/Graduate Seminar 3 - Honours/Graduate Topic 2: Alternatives to majority rule (I) Tutorial 2
4	Lecture 4 - Topic 4: Cost-benefit analysis Honours/Graduate Seminar 4 - Honours/Graduate Topic 2: Alternatives to majority rule (II) Tutorial 3	Assignment 1 due (See assessment summary table)
5	Lecture 5 - Topic 5: Public goods and publicly provided private goods Honours/Graduate Seminar 5 - Honours/Graduate Topic 3: Voting on public goods (I) Tutorial 4
6	Lecture 6 - Topic 6: Externalities Honours/Graduate Seminar 6 - Honours/Graduate Topic 3: Voting on public goods (II) Tutorial 5	Mid-semester exam (check official mid-semester examination timetable for precise date when released later in the semester)
7	Lecture 7 - Topic 7: Education and health care Honours/Graduate Seminar 7 - Honours/Graduate Topic 4: Political competition (I) Tutorial 6
8	Lecture 8 - Topic 8: Social security and welfare programs Honours/Graduate Seminar 8 - Honours/Graduate Topic 4: Political competition (II) Tutorial 7
9	Lecture 9 - Topic 9: Introduction to taxation and tax incidence Honours/Graduate Seminar 9 - Honours/Graduate Topic 5: Introduction to rent-seeking (I) Tutorial 8
10	Lecture 10 - Topic 10: Taxation and economic efficiency Honours/Graduate Seminar 10 - Honours/Graduate Topic 5: Introduction to rent-seeking (II) Tutorial 9	Assignment 2 due (See assessment summary table)
11	Lecture 11 - Topic 11: Optimal taxation Honours/Graduate Seminar 11 - Honours/Graduate Topic 6: Rent-seeking and government policy (I) Tutorial 10
12	Lecture 12 - Topic 12: Fiscal federalism Honours/Graduate Seminar 12 - Honours/Graduate Topic 6: Rent-seeking and government policy (II) Tutorial 11

Tutorial Registration

Tutorial signup for this course will be done via the Wattle website.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Assignment 1	5 %	21/03/2019	04/04/2019	1,2
Assignment 2	5 %	16/05/2019	30/05/2019	1,2,3,4,5,6
Mid-semester exam	30 %	01/04/2019	26/04/2019	1,2,3,4,6
Final exam	60 %	06/06/2019	05/07/2019	1,2,3,4,5,6

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Participation

This is an on-campus course. There are no marks allocated for attendance but participation in all teaching events, while not compulsory, is expected in line with Code of Practice for Teaching and Learning 2(b).

• Lectures: It is expected that students attend lectures whenever possible and come prepared to them. The handouts and information about relevant references for each topic will be available before the lectures in Wattle.
• Tutorials: Tutorials are discussion-based classes. It is expected that students prepare for tutorials in advance and come ready to answer questions about the problems assigned for each week's tutorial. Students who, through unavoidable and unplanned occurrences, are unable to attend a tutorial class one week are encouraged to work through the problems and attend a consultation session to check their answers and discuss any remaining doubts. More detailed information about tutors and tutorials will be available in the folder “Tutors and tutorials” in Wattle.
• Honours/Graduate seminars: It is expected that students attend Honours/Graduate seminars whenever possible and come prepared to them. Required reading and questions for the Honours/Graduate seminars will be available in Wattle. It is expected that students read the material to be covered and attempt the questions in advance in order to be able to actively participate in the Honours/Graduate seminar meetings.

Examination(s)

See assessment tasks 3 and 4.

Assessment Task 1

Assignment 1

The 2 assignments will consist of take-home tasks. They are compulsory and non-redeemable. These assignments will involve a combination of problem-solving questions and short essays, very similar to questions that can be found in examination papers. The purpose of these assignments is to provide regular feedback on how to answer questions. Students will be advised at a later date, in class and in Wattle, of the precise tasks to be fulfilled for each assignment.

Assessment Task 2

Assignment 2

The 2 assignments will consist of take-home tasks. They are compulsory and non-redeemable. These assignments will involve a combination of problem-solving questions and short essays, very similar to questions that can be found in examination papers. The purpose of these assignments is to provide regular feedback on how to answer questions. Students will be advised at a later date, in class and in Wattle, of the precise tasks to be fulfilled for each assignment.

Assessment Task 3

Mid-semester exam

The mid-semester exam is compulsory and 50% redeemable (i.e. if a student obtains a higher mark in the final exam than in the mid-semester exam, the final exam will account for 75% and the mid-semester exam for 15% of the final mark). The mid-semester exam will consist of 3 questions to be answered in 90 minutes and will take place in the mid-semester examination period [Please disregard the dates included for mid-semester and final exams in the assessment summary table above. Due to a system design flaw we are required to include dates to produce the class summary but the effective dates for the mid-semester and final exams will only be available when the official mid-semester and final examination timetables are released later in the semester] Students will be advised at a later date, in class and in Wattle, of the material covered in the mid-semester exam. Students are expected to check the Wattle site regularly for announcements.

Assessment Task 4

Final exam

The final exam is compulsory and non-redeemable, will consist of 6 essay-type questions to be answered in 3 hours and will take place in the final examination period [Please disregard the dates included for mid-semester and final exams in the assessment summary table above. Due to a system design flaw we are required to include dates to produce the class summary but the effective dates for the mid-semester and final exams will only be available when the official mid-semester and final examination timetables are released later in the semester]. The final exam will assess all material covered in the course.

Academic Integrity

Academic integrity is a core part of our culture as a community of scholars. At its heart, academic integrity is about behaving ethically. This means that all members of the community commit to honest and responsible scholarly practice and to upholding these values with respect and fairness. The Australian National University commits to embedding the values of academic integrity in our teaching and learning. We ensure that all members of our community understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with. The University has policies and procedures in place to promote academic integrity and manage academic misconduct. Visit the following Academic honesty & plagiarism website for more information about academic integrity and what the ANU considers academic misconduct. The ANU offers a number of services to assist students with their assignments, examinations, and other learning activities. The Academic Skills and Learning Centre offers a number of workshops and seminars that you may find useful for your studies.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

Late submission is not permitted. If an assessment task is submitted after the due date without a granted extension, a mark of 0 will be awarded.

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Returning Assignments

The assignments will be returned during the tutorials and/or lectures as soon as they are marked. An announcement will be made in Wattle.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. The Course Convener may grant extensions for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

Resubmission of assignments is not permitted.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents undergraduate and ANU College students
• PARSA supports and represents postgraduate and research students