This course focuses on the application of economic analysis to the activities of the government sector. The analysis draws on the relevant analytical literature, and fiscal management experiences in various countries, particularly from Asia.
Major topics covered include economic boundaries of the state, options for financing government expenditure; the role of budgetary system; the role of Psychology in public finance, economics of grants and subsidies; economic effects of various taxes; the role of fiscal incentives; VAT; lessons of tax reforms; globalization and fiscal systems; marketization of state enterprises and organizations; fiscal decentralization issues and social sector financing. While the emphasis is on economic reasoning, the importance of other areas, particularly governance, societal norms, and legal institutions and practices are also emphasized. Each student is encouraged to explore the relevance of insights from the analytical literature and experiences in various countries for the specific context in his or her own country. Understanding the specific context is therefore an essential element of analyzing issues in public sector economics. The participants are therefore expected to make themselves familiar with the fiscal accounts, organizational structures, and institutions pertaining to their countries.