UNIVERSITY OF NATIONAL AND WORLD ECONOMY
COURSE TITLE: Public Finance
SEMESTER: (WINTER or SUMMER)
TEACHER’S NAME: Assoc.Prof.Dr Presiana Nenkova, Dr Emil Kalchev
OFFICE: 2016
E-MAIL: [email protected], [email protected]
1. ANNOTATION
The primary objective of this course is to introduce students to the recent advances in
the theory of public finance. The students will use the tools and methods of economic analysis to
improve their understanding of public sector resource allocation and the effects of state and local
governmental fiscal activities on private sector resource allocation, on economic efficiency and on the
distribution of income. The Public finance module content covers the role and size of the public
sector, including the rationale for public sector interventions such as market failure and distributional
concerns; key factors determining decision – making in public sector; public resource mobilization via
user charges and taxation including the theory of taxation, taxation of income, wealth, consumption
and trade, tax incentives, tax compliance and enforcement, and tax reform; public expenditure policy,
including assessment of government programs and public sector efficiency and effectiveness; fiscal
decentralization and intergovernmental fiscal relations. The course utilizes case studies, placed in a
comparative conceptual framework, to evaluate the impact of alternative resource mobilization and
expenditure policies on efficiency and equity.
2. LANGUAGE OF TEACHING
ENGLISH
3. COURSE CONTENT (TOPICS)
1. Welfare Economics. Efficiency. Partial Equilibrium Analysis. General Equilibrium Analysis.
Market Failures.Equity.
2. Public Goods. The Characteristics of the Public Goods. Classification of the Public
Goods.Efficient Provision of Public Goods. Partial Equilibrium Analysis. General Equilibrium Analysis.
3.Redistribution. Income Distribution. Equity Considerations. Tools for Redistribution - Taxes,
Social Transfers,Other Tools.
4.Public Choice. From Individual Preferences to Collective Decisions. Direct Democracy. Voting.
Representative Democracy.
5.Public Expenditures. Defense. Social Security. Social Aid. Health Care. Education.
Infrastructure.Others
6.Cost-Benefit Analysis. Theoretical Foundations . Methodology . Identification of the Relevant
Costs and Benefits. Economic Assessment of Costs and Benefits. Discounting. Risk and Uncertainty.
Project Selection. Social Cost-Benefit Analysis
7.Taxation. Principles of Taxation. Tax “Anatomy". Classification of Taxes.
8.Alternatives to Taxation. User Charges. Public Debt. Inflation. Donations. Public Enterprises
9.Tax Incidence. Partial Equilibrium Analysis. General Equilibrium Analysis.
UNIVERSITY OF NATIONAL AND WORLD ECONOMY
10. Taxation and Economic Behavior. Commodity Taxation and Consumer Choice. Income
Taxation and the "Work – Leisure" Choice. Income Taxation and the "Consumption – Savings"
Choice. Corporate Taxation and Risk Taking. Tax Evasion.
11.Taxation and Efficiency. Excess Burden. Measurement of Excess Burden. Determinants of
Excess Burden.Optimal taxation.
12. Bulgarian Tax System. Personal Income Taxation, Social Insurance Taxes and Health
Insurance Taxes.
13. Bulgarian Tax System. Corporate Income taxation.
14. Bulgarian Tax System. Consumption Taxation - Value Added Tax, Excise Taxes, Custom
Duties.
15. Fiscal Decentralization. Decentralization theorem. Expenditure-revenue assignment. Fiscal
equalization. Property taxation.
4. METHODS OF TEACHING
The educational process is carried out through a combination of lectures and discussions on
previously posed questions based on papers, guest lecturers from the practical field, individual
assignments for the seminar classes, presentations and course works, simulation games on the
thought subject etc.
During instruction we use Power point presentations, on-line sources, participation of students with
written papers and presentations etc.
In order to acquire practical skills in the module taught during the seminars the students will be
encouraged to develop individual written works/case studies in compliance with their preferences and
abilities. The individual works will be evaluated separately and will have a given weight in the
students’ complex grade.
5. LEARNING OUTCOMES
The primary course’s objective is to provide students with the tools to understand the underlying
concepts and practical tradeoffs entailed in public finance policy alternatives. This will prepare and
equip students to engage constructively in the formulation, implementation, and evaluation of public
finance policies. Upon completion of this course, students will be able to:
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utilize theoretical knowledge in a comparative context for evaluation of the impact of
alternative resource mobilization and expenditure policies;
discuss the criteria for evaluating market based and government based solutions to society’s
needs and wants;
understand modern public choice;
apply the methodology of cost-benefit analysis;
identify the costs to society related to the imposition of a tax;
discuss issues relating to the supply of public goods in a multilevel system of government;
discuss current controversies related to taxation and government spending;
synthesize their learning by composing a research paper on a public economic topic.
6. ASSESTMENT METHODS
UNIVERSITY OF NATIONAL AND WORLD ECONOMY
The method of evaluation is based on a complex grade which includes 3 grade components:
a) midterm exam; b) participation with individual and group written assignment, c) final exam. Each
component has a weight in % (up to 70% for exams). Grades rate 100% (61% minimum to pass Satisfactory 3; 71-80% - Good 4; 81-90% - Very Good 5; 91% and above - Excellent 6.
7. REFERENCES (MANDATORY AND RECOMMENDED)
INDICATIVE READING
Mandatory
1.Hyman, D. N., Public Finance: A Contemporary Application of Theory to Policy, Thomson SouthWestern, 10th ed., 2010.
2.Rosen, H. S. and T. Gayer, Public Finance, Irwin / McGraw-Hill, 9th ed., 2009.
Recommended
1.Anderson, J. E., Public Finance: Principles and Policy, Houghton Mifflin, 1st ed., 2003.
2.Cullis, J. G. and P. R. Jones, Public Finance and Public Choice: Analytical Perspectives, Oxford
University Press, 3rd ed., 2009.
3.Musgrave, R. A., The Theory of Public Finance: A Study in Public Economy, McGraw-Hill, 1959.
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