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

Exams will be held remotely through the Course Wattle Site and may be invigilated. Stable and reliable internet connection is necessary. A webcam is also necessary for invigilated exams.

Required Resources

There is no prescribed text for this course. See information about recommended texts below.

Recommended Resources

The recommended texts for the Public Sector Economics lecture material are:

• Abelson, P. (2012), Public economics: principles and practice (3^rd edition), Mc-Graw Hill.
• Rosen, H. and Gayer, T. (2014), Public Finance (10th edition), McGraw-Hill.
• Stiglitz, J.E. and Rosengard, J.K. (2015), The Economics of the Public Sector (4th edition), W. W. Norton.
• Note: Sydsaeter, K. and Hammond, P. (2006), Essential Mathematics for Economic Analysis, Prentice Hall (Pubs) may be useful for background mathematical techniques. Your existing microeconomics text may also be useful for background microeconomics concepts.

The recommended texts for the Public Sector Economics Honours/Graduate seminar material are:

• For required reading: Hindriks, J. and Myles, G.D. (2013), Intermediate Public Economics (2nd edition), MIT Press.
• For further reading:
• 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.

All recommended texts will be placed on the Reserve Collection. There will be a link to the Reserve Collection in the Course Wattle Site.

• Rosen and Gayer (2014) is available as eBook in the ANU Library.
• The latest version of Abelson's text is available online free of charge and the link will be provided in the Course Wattle Site.
• Hindriks and Myles (2013) is available as eBook in the ANU Library.

Staff Feedback

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

• The solutions to quiz and mid-semester exam questions will be provided online and/or discussed in lectures upon release of results.
• Written comments, if relevant, will be included with the pieces of assessment 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 Course 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 includes:

• 2 hours a week: lecture;
• 1 hour a week: tutorial;
• 1 hour a week: Honours/Graduate interactive workshop;
• At least 6 hours a week: reading, research, writing, lecture, tutorial and Honours/Graduate interactive workshop preparation.

Course delivery

• The Pass component of Public Sector Economics (ECON2131) consists of a two-hour lecture (on campus, ECHO360 recorded) and a one-hour tutorial (either face-to-face or online, not recorded) per week. For more detailed information, see participation section above.
• The Honours/Graduate version of Public Sector Economics (ECON4434 for 4th year Honours and ECON8034 for Graduates) consists of the activities indicated above, to cover common material with ECON2131, and an additional one-hour interactive workshop (dual delivery, Zoom recorded) to cover specific Honours/Graduate material. For more detailed information, see participation section above.

Recommended readings

A table including recommended readings for each lecture topic and required readings for each Honours/Graduate interactive workshop will be provided in the Course Wattle Site.

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 the Course Wattle Site.
• Students should note that the PowerPoint handouts are to be regarded as a guide to the referenced material. Recommended readings for lecture topics and required readings for Honours/Graduate interactive workshops are included in the table mentioned above and in the last page of each handout. Students should regularly consult these references.

Class Schedule

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

Tutorial Registration

There will be separate face-to-face and online one-hour tutorials each week, starting teaching week 2. Each student will need to register in one tutorial group and will be able to select whether to attend face-to-face or online. Tutorial signup for this course will be done via the Course Wattle Site.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Quiz 1	5 %	15/03/2022	25/03/2022	1,2
Quiz 2	5 %	28/03/2022	08/04/2022	1,2,3,4,6
Mid-semester exam	25 %	*	*	1,2,3,4,6
Quiz 3	5 %	09/05/2022	20/05/2022	1,2,3,4,5,6
Quiz 4	5 %	23/05/2022	03/06/2022	1,2,3,4,5,6
Final exam	55 %	*	*	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 Students may choose not to submit assessment items through Turnitin. In this instance you will be required to submit, alongside the assessment item itself, hard copies of all references included in the assessment item.

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

There are no marks allocated for attendance but participation in lectures and tutorials, while not compulsory, is expected in line with Code of Practice for Teaching and Learning 2(b).

• Lectures will be delivered on campus and ECHO360 recorded (See ANU timetable for details on day, time and location). Lectures start in week 1. It is expected that students attend lectures whenever possible and come prepared to them. The handouts and other relevant information for each lecture will be available before each lecture in the Course Wattle Site. For those students unable to attend lectures it is expected that they engage with the lecture recordings and other material provided online on a weekly basis. The on campus lectures are subject to student attendance and COVID-19 circumstances. In the event of poor student attendance and/or adverse COVID-19 circumstances, the on campus lectures will be replaced with pre-recorded lectures.
• Tutorials will be offered both face-to-face and online (See tutorial registration information above). Tutorial meetings start in week 2. 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 Course Wattle Site.
• Honours/Graduate interactive workshops will be offered via dual delivery (simultaneous face-to-face and online) and Zoom recorded (See ANU timetable for details on day, time and location). The Honours/Graduate interactive workshop starts in week 1. Required reading and questions for the Honours/Graduate interactive workshops will be available in the Course Wattle Site before the teaching week where these are to be covered. 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 interactive workshops.

Examination(s)

See assessment tasks 3 and 6.

Assessment Task 1

Quiz 1

There will be 4 online Wattle quizzes throughout the semester. They are compulsory and non-redeemable. The Wattle quizzes will test knowledge covered in the preceding weeks' lectures and tutorials. The precise topics covered in each quiz will be announced in the Course Wattle Site one week before the quiz. Each quiz will count for 5% to your final grade. The questions will be a mix of multiple choice, short answer, numerical/calculation and essay type questions. The number of questions in each quiz will depend on the particular mix but there will be no more than 10 questions to answer. The quizzes will be available Friday 12pm of weeks 3, 5, 9 and 11 and will be open until Monday 12pm of the following week (Tuesday 12pm when Monday is a public holiday). However, once started each student will only have approximately 1 hour to complete the quiz, can only attempt the quiz once and cannot go backwards through the questions. There will be instructions at the beginning of each quiz – students should make sure to read them thoroughly before commencing. If a student misses a quiz for a legitimate reason, documentation will need to be provided to the course email address, and the remaining quizzes will be re-weighted. Quiz answers will be provided online and/or discussed in lectures upon release of quiz results. No late submissions are accepted. 

Assessment Task 2

Quiz 2

There will be 4 online Wattle quizzes throughout the semester. They are compulsory and non-redeemable. The Wattle quizzes will test knowledge covered in the preceding weeks' lectures and tutorials. The precise topics covered in each quiz will be announced in the Course Wattle Site one week before the quiz. Each quiz will count for 5% to your final grade. The questions will be a mix of multiple choice, short answer, numerical/calculation and essay type questions. The number of questions in each quiz will depend on the particular mix but there will be no more than 10 questions to answer. The quizzes will be available Friday 12pm of weeks 3, 5, 9 and 11 and will be open until Monday 12pm of the following week (Tuesday 12pm when Monday is a public holiday). However, once started each student will only have approximately 1 hour to complete the quiz, can only attempt the quiz once and cannot go backwards through the questions. There will be instructions at the beginning of each quiz – students should make sure to read them thoroughly before commencing. If a student misses a quiz for a legitimate reason, documentation will need to be provided to the course email address, and the remaining quizzes will be re-weighted. Quiz answers will be provided online and/or discussed in lectures upon release of quiz results. No late submissions are accepted. 

Assessment Task 3

Mid-semester exam

A mid-semester exam will be held during the ANU mid-semester exam period (week 6 or week 7). The exam will be delivered online via the Course Wattle Site and may be invigilated. The mid-semester exam is compulsory and non-redeemable, will consist of a mix of multiple choice, short answer, numerical/calculation and essay type questions to be answered in 90 minutes and will count 25% of the final grade. The mid-semester exam will cover topics 1-4 and material covered in Honours/Graduate interactive workshops 1-4. Final details and submission information will be provided no later than week 4 in the Course Wattle Site. The precise date will be announced in the official mid-semester examination timetable. Students are expected to check the Course Wattle Site regularly for announcements.

Assessment Task 4

Quiz 3

There will be 4 online Wattle quizzes throughout the semester. They are compulsory and non-redeemable. The Wattle quizzes will test knowledge covered in the preceding weeks' lectures and tutorials. The precise topics covered in each quiz will be announced in the Course Wattle Site one week before the quiz. Each quiz will count for 5% to your final grade. The questions will be a mix of multiple choice, short answer, numerical/calculation and essay type questions. The number of questions in each quiz will depend on the particular mix but there will be no more than 10 questions to answer. The quizzes will be available Friday 12pm of weeks 3, 5, 9 and 11 and will be open until Monday 12pm of the following week (Tuesday 12pm when Monday is a public holiday). However, once started each student will only have approximately 1 hour to complete the quiz, can only attempt the quiz once and cannot go backwards through the questions. There will be instructions at the beginning of each quiz – students should make sure to read them thoroughly before commencing. If a student misses a quiz for a legitimate reason, documentation will need to be provided to the course email address, and the remaining quizzes will be re-weighted. Quiz answers will be provided online and/or discussed in lectures upon release of quiz results. No late submissions are accepted. 

Assessment Task 5

Quiz 4

There will be 4 online Wattle quizzes throughout the semester. They are compulsory and non-redeemable. The Wattle quizzes will test knowledge covered in the preceding weeks' lectures and tutorials. The precise topics covered in each quiz will be announced in the Course Wattle Site one week before the quiz. Each quiz will count for 5% to your final grade. The questions will be a mix of multiple choice, short answer, numerical/calculation and essay type questions. The number of questions in each quiz will depend on the particular mix but there will be no more than 10 questions to answer. The quizzes will be available Friday 12pm of weeks 3, 5, 9 and 11 and will be open until Monday 12pm of the following week (Tuesday 12pm when Monday is a public holiday). However, once started each student will only have approximately 1 hour to complete the quiz, can only attempt the quiz once and cannot go backwards through the questions. There will be instructions at the beginning of each quiz – students should make sure to read them thoroughly before commencing. If a student misses a quiz for a legitimate reason, documentation will need to be provided to the course email address, and the remaining quizzes will be re-weighted. Quiz answers will be provided online and/or discussed in lectures upon release of quiz results. No late submissions are accepted. 

Assessment Task 6

Final exam

A final exam will be held during the ANU final exam period. The exam will be delivered online via the Course Wattle Site and may be invigilated. The final exam is compulsory and non-redeemable, will consist of a mix of multiple choice, short answer, numerical/calculation and essay questions to be answered in 3 hours and will count 55% of the final grade. The final exam will cover topics 5-12 and material covered in Honours/Graduate interactive workshops 5-12. Final details and submission information will be provided no later than week 10 in the Course Wattle Site. The precise date will be announced in the official final examination timetable. Students are expected to check the Course Wattle Site regularly for announcements.

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

The ANU uses 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. While the use of Turnitin is not mandatory, the ANU highly recommends Turnitin is used by both teaching staff and students. For additional information regarding Turnitin please visit the ANU Online website.

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 original submitted assignment, and any relevant feedback comments, will be made available in the Course Wattle Site as soon as the assignments are marked and the marks are released, no later than 2 weeks after the assignment is due. An announcement will be made in the Course Wattle Site.

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