Public Choice and Public Finance

Public Choice and Public Finance, WT 2007/2008

Prof. Dr. Cay Folkers

Professor of Public Economics, Ruhr-University of Bochum 
 

Lecture without Tutorial

Schedule:

• 09th of November 2007, 8 c.t. - 10, 10 c.t. - 12, 14 c.t. - 16, HS 006 Wilhelmstr. 26
• 10th of November 2007, 8 c.t. - 10, 10 c.t. - 12, ÜR 1 UB
• 07th of December 2007, 8 c.t. - 10, 10 c.t. - 12, 14 c.t. - 16, HS 006 Wilhelmstr. 26
• 08th of December 2007, 8 c.t. - 10, 10 c.t. - 12, HS 006 Wilhelmstr. 26
• 18th of January 2008, 8 c.t. - 10, 10 c.t. - 12, 14 c.t. - 16, HS 006 Wilhelmstr. 26
• 19th of January 2008, 8 c.t. - 10, 10 c.t. - 12, HS 006 Wilhelmstr. 26

Target Group

IMP students (second year, MEP) and Diploma students (Hauptstudium, anrechenbar für Pflichtfach Wirtschaftspolitik: Ordnungspolitik, Pflichtwahlfach Ordnungs- und Wettbewerbspolitik).

Credits

4 Credit Points.

Downloads

• Announcement and complete reading list.
• Package of Figures (1).

Syllabus (Preliminary) and Basic Textbooks

I. Introduction - The impact of public choice theory on positive and normative public finance

II. Public Goods and Fiscal Decisions

1. Orthodox theory of public goods and collective decisions
2. Majority voting on public goods provision
   1. Simple models – one-dimensional issues
   2. Complex models – multidimensional issues, logrolling, agenda control
3. Political power and supply of public goods
4. Pure majoritarian democracy, endogeneity of alternatives, and the supply of public goods
5. Political cooperation in a federal democracy – universalism and mutualism in public expenditure decisions
6. Constitutional rules for spending decisions

III. Taxation and Tax Reform

1. Orthodox theory of efficient and equitable taxation
   1. The welfare cost of taxation
   2. Optimal commodity taxation
   3. Optimal income taxation
2. Constitutional theory of taxation
   1. The constitutional approach to taxation
   2. Tax institutions for Leviathan
   3. Tax institutions for pure majoritarian democracy
3. Tax structure in representative democracies
4. Tax reform and the fiscal constitution

IV. Fiscal Federalism and European Integration

1. Orthodox theory of fiscal federalism
2. Public choice theory of federal fiscal systems
3. Fiscal federalism and the European Union
4. Public choice theory of European Integration
5. Aspects of a constitutional contract for the EU

V. Summary and Conclusions - Public choice, public sector growth, and constitutional order

Basic Textbooks:

1. Buchanan, J.M. and M.R. Flowers (1987), The public finances, 6th Ed., Homewood, Ill.: Richard D. Irwin.
2. Cullis, J. and Ph. Jones (1998), Public finance and public choice, 2nd Ed., Oxford: Oxford University Press.
3. Mueller, D.C. (2003), Public choice III, Cambridge, U.K.: Cambridge University Press.