Economics of the Public Sector

The economies of different countries are organised in different combinations of what economic literature classifies as traditional economic systems, command systems and free market systems. In no country would one probably find a perfect textbook example of anyone, rather combinations with the pendulum having swung very far in favour of market systems, although not entirely free in the sense of the textbook model. In such mixed economies the market and the state both have an important role to play; the question is what ought to be the role of each – how is the balance obtained between a degree of market freedom and a degree of state intervention? This is the fundamental question which participants to this course will be able to answer. Such participants will thus be able to make case studies of the variety of roles which the state plays in their respective economies and to evaluate the economic and social justification for each case of state intervention. In a similar vein, participants will be able to evaluate new cases for state intervention that may arise and determine the fundamental validity of cases for privatization that may or ought to arise. Participants to this course will be able to identify those cases of capital expenditure by the state that ought to be subjected to systems analyses, in particular social cost-benefit analyses.