Course 2023-2024 a.y.

1. In the first part of the course, we cover the main motivations for government intervention in the economy:
   • We analyze the different market failures, such as externalities and underprovision of public goods.
   • We discuss equity and efficiency rationales.
   • We discuss how to measure the benefits and the costs of government interventions.
   • Which is the optimal government level for intervention (fiscal federalism).
   • Why governments intervene in the way they do (political economy).
   • We conclude the first part by analyzing an impure type of public good provided by governments of all developed economies: education.
2. In the second part of the course, we discuss the social insurance framework and focus on the main welfare state programs:
   • Pensions.
   • Healthcare.
   • Unemployment benefits.
   • Anti-poverty programs.
3. Finally, we discuss how governments raise the resources needed for intervention by analyzing taxation issues:
   • Tax incidence.
   • Tax efficiency.
   • Distortionary effects of taxation.

• Illustrate the economic rationales of government intervention in market economies.
• Define Public Goods, externalities, asymmetric information issues
• Identify in which instances government intervention is needed to correct market failures.
• Explain how social insurance programs are designed in different countries
• Explain how personal income taxation works in different countries and why

• Discuss the role and extent of government intervention in market economies based on normative theory and empirical evidence.
• Analyze empirical evidence of academic research that evaluates the effects of government intervention.
• Evaluate effectiveness of public policies.
• Compare different policy/reform proposals for both public expenditure and taxation.
• Evaluate why governments intervene in the way they do.

• Face-to-face lectures
• Exercises (exercises, database, software etc.)

We solve and discuss numerical exercises and theoretical questions in class throughout the course. The goal is to put the concepts and theory of public finance "at work" and practice for quizzes and exams.

For both attending and not-attending students, written individual exams can be a mix of open-ended essays, numerical exercises, and multiple-choice questions aimed at assessing students' ability to illustrate the economic rationales of government intervention in market economies, identify market failures and propose viable correcting public policies, estimate economic costs and benefits of the proposed policies and explain how social insurance programs are designed. The assessment will also be aimed at testing students' developed ability to analyze empirical evidence of academic research that evaluates the effects of government intervention, compare different policy/reform proposals for both public expenditure and taxation, and evaluate why governments intervene in the way they do.

For both attending and not-attending students, written individual exams are a mix of open-ended, numerical, multiple-choice, and "True" or "False" questions.

Two options are available for the assessment based on the student’s preference:

Option A: midterm (50%) on the first half of the course + final (50%) on the second half of the course. The final grade is the average of the two grades if and only if they are both above 18.

Option B: general exam (100%) on all the topics.

QUIZZES: two multiple-choice quizzes will be administered in class via Bboard. Each one is made up of 15 questions (30Q in total). If you score at least 18/30 in total, you get an extra point +1 on your final grade (computed with either option A or option B)

• J. GRUBER, Public Finance and Public Policy, Palgrave Macmillan, 6th edition.
• We upload the slides used for lectures on Bboard. We will also upload exercises and solutions. Online teaching materials are compulsory for the course.