This course is the advanced version of ECON2131 Public Economics – Theory. The course is taught at a more advanced level for undergraduate students enrolled at the Honours level.

The Pass component consists on a standard public economics course, which commonly takes for granted the existence of a benevolent government and focuses mostly on what governments should do (see details for the Pass component in the ECON2131 Study @ page).

The Honours component covers topics on public choice and provides an alternative, more critical, view of government. The public choice perspective places more emphasis on modeling the political process and argues that this, like the market mechanism, has readily identifiable sources of failure.

Upon successful completion of the requirements for this course, students should be able to:
• understand the principal forms of market failure that provide a justification for government intervention;
• understand the main policy instruments used to mitigate market failures and the principles that guide their optimal use;
• understand the limitations of government intervention - for instance, understand how the presence of information problems both explains the forms that policy intervention take and imposes limits on what can be achieved by it.
• understand the trade-offs captured by public economics models; including the assumptions, relevance, and limitations of those models.
• analyse policy problems and assess arguments appearing in the policy debate.
• understand the differences between the normative and the positive approaches to public economics; in particular, become familiar with public choice models of government.

 In-class tests, a mid-semester examination and an end-of-semester examination. Details to be determined at the commencement of the course.

Contact hours as for the pass course together with additional honours classes and assessment.

Completion of or concurrent enrolment in ECON2101/2111 Microeconomics 2 (P or H).

Please refer to Course Website