Office hours: Tues., 4:30-5:30 p.m.; Thurs., 3:30-4:30 p.m., 6:00-7:00 p.m.; or by appointment. Public Economics
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1 Econ 433 Spring 2009 A. D. Lowenberg Office: JH 4238; Phone: Office hours: Tues., 4:30-5:30 p.m.; Thurs., 3:30-4:30 p.m., 6:00-7:00 p.m.; or by appointment. Public Economics The objective of this course is to introduce students to the economic analysis of government. Public economics uses the tools of microeconomic theory to explain the functions of government, collective choice processes, the consequences of alternative government activities and expenditures, and the incidence and allocative effects of taxation. The main emphasis will be on understanding the rationale for government in a market economy, the advantages and disadvantages of supplying goods through political institutions as opposed to private markets, and how government policies are determined in majoritarian democratic political systems. Prerequisites: Econ 309 and Econ 310 and passing score on the Upper-Division Writing Proficiency Exam. Text: Course packet produced by Follett Custom Publishing and available from the campus bookstore (note that all of the readings contained in this packet are also available on Reserve in the Oviatt Library). Course Requirements and Grading: Midterm test 35% Thurs., March 5 Term paper 15% due Tues., April 28 Final exam 50% Thurs., May 14, 12:45-2:45 p.m. Please make a note of these dates. There will be no make-up test for students who miss the midterm, with no exceptions. If you do not take the midterm, you will automatically have a greater weight placed on your final examination. If you take the midterm, you cannot decide later on to drop it from the calculation of your course grade. The decision to drop the midterm must be made before the test; once you have taken the test, its score will count in the course grade calculation. The final exam will cover the entire syllabus, although it will be weighted more heavily toward material covered after the midterm. Points will be deducted on term papers submitted after the deadline, with no exceptions. Note that there will be no extra credit assignments available in this class, with no exceptions. Note on Grading Policy: Plus/minus grades will be used. See the last page for drop/incomplete policies.
2 Syllabus and Reading List (these readings, unless otherwise stated, are contained in the course packet and are also available on Reserve in the Oviatt Library): 1. Introduction View, CA: Bristlecone Books, 1991, pp. 1-13; Buchanan, James M., "Public Finance and Public Choice," National Tax Journal, December 1975, 28, Reprinted in Baker, Samuel H. and Elliott, Catherine S., eds., Readings in Public Sector Economics, Lexington, MA: D. C. Heath and Company, 1990, pp [excluded from course packet, available on Reserve] Gwartney, James D. and Wagner, Richard E., "The Public Choice Revolution," Intercollegiate Review, Spring 1988, 23, [excluded from course packet, available on Reserve] 2. Private Market Efficiency, Interdependencies, and the Rationale for Collective Action View, CA: Bristlecone Books, 1991, pp ; 53-67; 70-77; Hyman, David N., Public Finance: A Contemporary Application of Theory to Policy (Fifth Edition), Fort Worth, TX: Dryden Press, 1996, pp ; Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp Ordeshook, Peter C., Game Theory and Political Theory, Cambridge: Cambridge University Press, 1986, pp Externalities and the Coase Theorem View, CA: Bristlecone Books, 1991, pp Coase, Ronald H., "The Problem of Social Cost," Journal of Law and Economics, October 1960, 3, Reprinted in Baker, Samuel H. and Elliott, Catherine S., eds., Readings in Public Sector Economics, Lexington, MA: D. C. Heath and Company, 1990, pp Gifford, Adam Jr. and Santoni, Gary J., Public Economics: Politicians, Property Rights, and Exchange, Hinsdale, IL: Dryden Press, 1979, pp Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp
3 4. Local Public Goods and the Economic Theory of Clubs View, CA: Bristlecone Books, 1991, pp [excluded from course packet, available on Reserve] Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp Tiebout, Charles M., "A Pure Theory of Local Expenditures," Journal of Political Economy, October 1956, 64, Reprinted in Baker, Samuel H. and Elliott, Catherine S., eds., Readings in Public Sector Economics, Lexington, MA: D. C. Heath and Company, 1990, pp [excluded from course packet, available on Reserve] Buchanan, James M., "An Economic Theory of Clubs," Economica, February 1965, 32 (125), Public Choice Through Voting View, CA: Bristlecone Books, 1991, pp ; 155-6; 160-3; Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp Gifford, Adam Jr. and Santoni, Gary J., Public Economics: Politicians, Property Rights, and Exchange, Hinsdale, IL: Dryden Press, 1979, pp ; Hyman, David N., Public Finance: A Contemporary Application of Theory to Policy (Third Edition), Hinsdale, IL: Dryden Press, 1990, pp ; [excluded from course packet, available on Reserve] 6. Majority Voting and Redistribution View, CA: Bristlecone Books, 1991, pp Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp Ordeshook, Peter C., Game Theory and Political Theory, Cambridge: Cambridge University Press, 1986, pp
4 7. Representative Democracy View, CA: Bristlecone Books, 1991, pp ; Gifford, Adam Jr. and Santoni, Gary J., Public Economics: Politicians, Property Rights, and Exchange, Hinsdale, IL: Dryden Press, 1979, pp Hyman, David N., Public Finance: A Contemporary Application of Theory to Policy (Third Edition), Hinsdale, IL: Dryden Press, 1990, pp ; ; [pp ; excluded from course packet, available on Reserve] Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp Bureaucrats and the Supply of Public Goods View, CA: Bristlecone Books, 1991, pp Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp ; Hyman, David N., Public Finance: A Contemporary Application of Theory to Policy (Third Edition), Hinsdale, IL: Dryden Press, 1990, pp Rent Seeking View, CA: Bristlecone Books, 1991, pp Buchanan, James M., "Rent Seeking and Profit Seeking," in Buchanan, James M., Tollison, Robert D. and Tullock, Gordon, eds., Toward a Theory of the Rent-Seeking Society, College Station, TX: Texas A & M University Press, 1980, pp Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp ; ; Interest Groups and Regulation Stigler, George J., "The Theory of Economic Regulation," Bell Journal of Economics and Management Science, Spring 1971, 2, Reprinted in Stigler, George J., ed., Chicago Studies in Political Economy, Chicago: University of Chicago Press, 1988, pp [excluded from course packet, available on Reserve]
5 Mueller, Dennis C., Public Choice II, Cambridge: Cambridge University Press, 1989, pp ; 243-4; Tax Incidence, Efficiency, and the Distribution of Income Hyman, David N., Public Finance: A Contemporary Application of Theory to Policy (Fifth Edition), Fort Worth, TX: Dryden Press, 1996, pp
6 Economics Department drop/incomplete policies: In this class, the University drop policy will be strictly enforced. According to University policy, non-attendance does not constitute withdrawal. If you fail to attend this class, and you do not formally drop the class, a WU (unauthorized withdrawal), the equivalent of a failing grade, will be recorded. During the first three weeks of instruction, students may withdraw online through SOLAR. After the third week, drops are not normally permitted. Exceptions may be granted by the Office of Undergraduate Studies if there is a serious and compelling reason and there is no viable alternative (a viable alternative includes taking a failing grade and repeating the course). Changes in work schedule, etc., generally will not be considered a sufficient reason. Complete Medical Withdrawals (all classes are dropped due to medical problems - yours or those of someone you assist) are processed by the Health Center. A grade of Incomplete will be assigned only when most of the course has been completed with a passing grade. This is only permitted when unforeseen circumstances arise that preclude finishing course work related to a class. According to University policy, an incomplete may not be assigned when a student would have to retake the course.
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