Syllabus
1. Introduction: public goods, externalities
2. The principal-agent problems in the public sector
3. The state and local budget – their composition and the budgeting process
4. Public procurement – theory, efficiency, corruption risks, waste, and mechanism limiting their extent
5. Public procurement – the “law in action” at the competition offices and courts
6. European and state subsidies – the correction of market failures in theory and practice
7. Transparency of the public sector and its economic implications
8. Financing of political parties and its impacts on the allocation of public goods
9. Design of the tax system
10. Tax evasion, avoidance, and tax havens
11. Regulatory impact assessment (RIA) – theory, practice, and the institutional setting in the legislative process
12. RIA – case studies
Annotation
The course introduces students to selected topics in the economics of the public sector, with a special focus on their real-world applications and legal regulation. It starts with the theoretical arguments for government interventions in markets, and then moves on to the most significant applications: public budgets, public procurement, and subsidies. We will study how these tools of public policy are regulated, and whether their regulation is economically efficient. This approach is synthesized in the final lectures devoted of the theory and practice of the regulatory impact assessment (RIA) in the legislative process.
Important information about the prerequisites: The course requires prior knowledge of economics at the level of an introductory microeconomics course (e.g., Mankiw, G.: Principles of Economics, chapters 1-19). For the Faculty of Law regular master students, this implies that they should have completed the course Theory of national economy I. Throughout the classes and exams, we will presume that the students have the requisite knowledge of this material.