《Public Finance》双语课程教学大纲

《Public Finance》(双语)课程教学大纲

（2003年制订，2006年修订）

课程编号：110110

中文名：公共财政

课程类别：专业主干课

前置课：西方经济学、财政学、大学英语

后置课：

学分：3学分

课时：51课时

主讲教师：任巧玲、郭晔、毛翠英等

选定教材：Harvey S. Rosen: Public Finance, New York: McGraw-Hill, 2002（节选）.

课程概述：

本课程为财政学专业的专业主干课，本大纲适用于财政学本科专业。当前，我国的公共财政体制正在进一步地发展和完善，在这个过程中，充分了解和有效借鉴西方市场经济国家财政领域的基础理论和实践状况十分必要。而在财政学专业课程体系中设置相应课程，正体现出与这一现实要求的协调一致。本课程主要内容包括：财政学的定义及其主要思想；公共品的定义及其提供等问题；外部性的本质及其影响和对策；公共选择的各种机制的讨论与评估；赤字融资及其相关问题等。

教学目的：

本课程的教学目的在于使学生在已有知识基础上，重点掌握西方财政学体系中的基本理论观点，也可以了解到西方国家（主要是美国）财政运行的一般情况；使学生能够在不同的具体现实条件中思考运用所学到的相应观点和知识；同时，使学生掌握财政学方面术语的英语表达方式。

教学方法：

本课程作为一门双语教学课程，使用的是英文教材，课堂教学过程中的内容讲解采用中英文结合方式，英语使用程度需要参考学生的整体接受程度。为强化相关理论知识及其实践运用，本课程根据教学内容进程及其侧重点设置了讨论课时段。同时，本课程大量借助多媒体手段使讲解更加清楚。

各章教学要求及教学要点

Chapter 1 Introduction

课时分配：3课时

教学要求：

通过本章的学习使学生掌握财政学的内涵及其主要功能，并以此为基础把握两种主要的财政思想。本章重点为财政学的基本涵义。

教学内容：

1.1Introduction of Public Finance

Public finance, also known as public sector economics or public economics, focuses on the taxing and spending activities of government and their influence on the allocation of resources and distribution of income.

1.2 Public Finance and Ideology

1. Organic view of government

Society is conceived of as a natural organism．Each individual is a part of this organism，and the government can be thought of as its heart. The individual has significance only as part of the community，and the good of the individual is defined with respect to the good of the whole. Thus，the community is stressed above the individual.

2. Mechanistic view of government

Government is not an organic part of society. Rather, it is a contrivance created by individuals to better achieve their individual goals．The individual rather than the group is at center stage．

思考题：

1. How is public finance defined?

2. What are the ideological views concerning the relationship between the individual and the state?

Chapter 2 Public Goods

课时分配：12课时

教学要求：

通过本章学习使学生掌握公共品的界定和内涵，并以此为基础把握公共品的有效提供及其生产方面的基本观点。本章重点为公共品的定义及其供给的局部均衡模型。本章难点为非排他性、公共提供与公共生产。

教学内容：

2.1 Public Goods Defined

1. Public goods are neither excludable nor rival.

That is, people cannot be prevented from using a public good, and one person’s use of a public good does not reduce another person’s ability to use it.

2. Public goods are characterized by non-rivalry and non-excludability in consumption.

⑴ Non-excludability: the property of a good whereby a person can not be prevented from using it.

⑵ Non-rivalry: the property of a good whereby one person’s use doesn’t diminish other people’s use.

3. Some important aspects of public goods:

⑴ Thus, each person consumes the same amount, but not necessarily the preferred amount, of the public good.

⑵ Different types of public goods: pure and impure public goods; local public goods; congestible goods; etc.

⑶ The relationship between public goods and public provision:

Public goods are not necessarily publicly provided.

Public goods that are publicly provided are not necessarily publicly produced.

Public goods can be provided privately, and private goods can be provided publicly.

2.2 Efficient Provision of Public Goods

1. Efficient provision of public goods requires that the sum of the individual MRSs equal the MRT, unlike private goods where each MRS equals the MRT, required by Pareto efficiency.

MRS: marginal rate of substitution.

MRT: the marginal rate of transformation.

A Pareto efficient allocation occurs when no person can be made better off without making another person worse off.

2. Graphically, it’s shown as “horizontal summation” for private goods, while for public goods it is “vertical summation”.

3. The free rider problem

A free rider is a person who receives the benefit of a good but avoids payment for it.

Because public goods are not excludable, the free-rider problem prevents the private market from supplying them. The government, however, can potentially remedy the problem.

Casual observation and laboratory studies indicate that people do not fully exploit free riding possibilities. Nonetheless, in the certain cases, free riding is a significant problem.

Market mechanisms are unlikely to provide non-rival goods efficiently, even if they are excludable.

4. Cost-benefit analysis

Deciding that the government must play a role in supplying public goods is only the first step, and then the government must determine what kinds of public goods to provide and in what quantities.

If the total benefits exceed the costs of supplying a public good, the government can provide it and pay for it with tax revenue, making everyone better off.

Cost-benefit analysis: a study that compares the costs and benefits to society of providing a public good.

Cost-benefit analysis has a tough job. It does not observe any price signals when evaluating whether the government should provide a public good.

The efficient provision of public goods is, therefore, intrinsically more difficult than the efficient provision of private goods.

2.3 About Privatization

1. Privatization:

It means taking goods or services that are supplied by the government and turning them over to the private sector for provision and /or production.

2. Public or private production of public goods.

Even in cases where public provision of a good is selected, a choice between public and private production must be made:

⑴ Between public sector and private sector

Incentive to improve in efficiency;

Difficulty in acquiring and measuring efficiency;

Outcome: cost saving and quality of output.

⑵ Determining whether public or private production will be more efficient:

A key factor is the market environment. Public versus private ownership is less important than whether effective competition is present.

Another important question is the extent to which complete contracts can be written with private sector service providers.

思考题：

1. How are public goods defined?

2. Why does the free-rider problem induce the government to provide public goods?

3. How should the government decide whether to provide a public good?

4. What is the right mix of public and private provision for public goods?

Chapter 3 Externalities

课时分配：15课时

教学要求：

通过本章学习使学生在掌握外部性性质和特征的基础上，把握在应对外部性（主要是负外部性，如污染）方面市场和政府的对策。本章重点和难点为外部性的定义及其特征、科斯定理、对外部性的公共对策。

教学内容：

3.1 The Nature of Externalities

1. Externality: the uncompensated impact of one person’s actions on the w ell-being of a bystander.

When the activity of one entity (a person of a firm) directly affects the welfare of another in a way that is outside the market mechanism, that effect is called an externality (because one entity directly affects the welfare of another entity that is “external” to it).

Simply, an externality occurs when the activity of one person affects another person outside the market mechanism.

2. The nature of externalities:

An externality is a consequence of the failure or inability to establish property rights. Namely, externalities may generally be traced to the absence of enforceable property rights.

3. The characteristics of externalities:

They can be produced by consumers as well as firms;

Externalities are reciprocal in nature;

Externalities can be positive;

Public goods can be viewed as a special kind of externality.

4. The effect of externalities

⑴ Externalities lead markets to allocate resources inefficiently. Externalities cause market price to diverge from social cost, bringing about an inefficient allocation of resources:

In the presence of a negative externality, such as pollution, the social cost of the good exceeds the private cost. The socially optimal quantity is therefore smaller than the market equilibrium quantity;

Positive externalities generally lead to under provision of an activity.

⑵ All of the remedies share the goal of moving the allocation of resources closer to the social optimum.

3.2 Private Solutions to Externalities

1. Bargaining and the Coase Theorem

⑴ Coase theorem: the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, if property rights are established..

⑵ Two important assumptions played a key role in the preceding analysis:

T h e c o s t s t o t h e p a r t i e s o f b a r g a i n i n g a r e l o w.Transaction costs: the costs that parties incur in the process of agreeing and following through on a bargain;

The owners of resources can identify the source of damages to their property and legally prevent damages.

2. Mergers

It is to internalize an externality by combining the involved parties.

3. Social conventions

Some social conventions can be viewed as attempts to induce people to take into account the externalities they generate.

3.3 Public Policies toward Externalities

1. Pigovian Taxes

⑴ Pigouvian Tax: a tax enacted to correct the effects of a negative externality.

That is, a Pigouvian tax is a tax levied on each unit of a polluter’s output in an amount just equal to the marginal damage it inflicts at the efficient level of output.

⑵ In essence, the Pigouvian tax places a price on the right to pollute. Such a tax gives the producer a private incentive to pollute the efficient amount.

Just as markets allocate goods to those buyers who value them most highly, a Pigouvian tax allocates pollution to those factories that face the highest cost of reducing it.

The taxes give the factories incentive to develop cleaner technologies, because a cleaner technology would reduce the amount of tax the factory has to pay.

2. Subsidies

⑴ A subsidy for pollution not produced can induce producers to pollute at the efficient level.

However, subsidies can lead to too much production, are administratively difficult, and are regarded by some as ethically unappealing.

⑵ A subsidy can correct the under-provision of an activity caused by positive externalities, but care must be taken to avoid wasteful subsidies.

3. Tradable Pollution Permits (Creating a Market)

As long as there is a free market for the pollution rights, the final allocation will be efficient whatever the initial allocation. Pollution rights may be traded in markets.

This fixes the total level of pollution, an advantage when administrators are uncertain how polluters will respond to Pigouvian taxes.

4. Regulation

Regulation is likely to be inefficient because the social value of pollution reduction varies across firms, locations, and the populace.

Nevertheless, this is the most widespread form of environmental policy.

思考题：

1. What is an externality? What are the nature and the characteristics of externalities?

2. What is the Coase Theorem? How to understand and apply it?

3. What are the public policies toward externalities? How to apply them? What are the differences between them?

Chapter 4 Political Economy

课时分配：12课时

教学要求：

通过本章学习使学生把握在直接民主制和代议民主制下公共支出如何被决定及其存在的问题，

并进一步了解政府增长的原因及其应对办法。本章重点为直接民主制、代议民主制、政府增长的解

释与控制。本章难点为投票悖论、阿罗不可能定理。

教学内容：

4.1 Direct Democracy

Various voting procedures are used to decide on public expenditures. Some are here:

1. Unanimity Rules

⑴ The Lindahl’s model shows the tax shares and level of public good provision to which everyone agrees.

Lindahl Prices: the tax shares of each individual.

An equilibrium is a set of Lindahl prices such that those prices each person votes for the same quantity of the public good.

⑵ Two main problems may impede the practical provision:

It assumes people vote sincerely, but strategic behavior may prevent individuals from reaching the Lindahl equilibrium;

It may take a lot of time to find the mutually agreeable tax shares.

2. Majority Voting Rules

With it, one more than half of the voters must favor a measure to gain approval.

⑴ Majority voting may lead to inconsistent decisions regarding public goods if some people’s preferences are not single peaked.

Voting Paradox:although e ach individual voter’s preferences are consistent, the community’s are not.

Agenda Manipulation: the process of organizing the order of votes to assure a favorable outcome.

Single-peaked Preferences: when moving away from the most preferred outcome in any and all directions, the individual’s utility consistently falls.

Double-peaked Preferences: when moving away from the most preferred outcome, the individual’s utility goes down, but then goes up again.

⑵ Median Voter Theorem:

As long as all preferences are single peaked, the outcome of majority voting reflects the preferences of the median voters.

Median Voter: the voter whose preferences lie in the middle of the set of all voters’ preferences — half the voters want more of the good than the median voter, and half want less.

3. Logrolling

People can trade votes and hence register how strongly they feel about various issues.

Logrolling allows voters to express the intensity of their preferences by trading votes. However, minority gains may come at the expense of greater general Losses.

4. Arrow’s Impossibility Theorem

⑴ Nobel laureate Kenneth Arrow proposed that in a democratic society, a collective decision-making rule should satisfy the following criteria:

It can produce a decision whatever the configuration of voters’ preferences.

It must be able to rank all possible outcomes.

It must be responsive to individuals’ preferences.

It must be consistent (transitive).

S ociety’s ranking of A and B depends only on individuals’ rankings of A and B.

(Independence of irrelevant alternatives.)

Dictatorship is ruled out.

⑵Arrow’s Impossibility Theorem states that, in general, it is impossible to find

a decision-making rule that simultaneously satisfies a number of apparently reasonable criteria.

The implication is that democracies are inherently prone to make inconsistent decisions.

4.2 Representative Democracy

Explanations of government behavior require studying the interaction of elected officials, public employees, and special-interest groups.

1. Elected Politicians

Under restrictive assumptions, the actions of elected officials mimic the wishes of the median voter.

Median voter theorem for elections has two striking implications:

First, two-party systems tend to be stable in the sense that both parties stake out positions near the “center”.

Second, the replacement of direct referenda by a representative system has no effect on the outcome.

Several aspects of the analysis require careful examination:

Single-dimensional rankings; ideology; personality; leadership; decision to vote

2. Public Employees

Public employees have an important impact on the development and implementation of economic policy.

Niskanen’s model of bureaucracy

One theory predicts that bureaucrats attempt to maximize the size of their agencies’ budgets, resulting in oversupply of the service.

3. Special interests

Special interests can form on the basis of income source, income size, industry, region, or demographic and personal characteristics.

The iron triangle

4. Other Actors

The judiciary; journalists; experts

4.3 Explaining Government Growth

1. The growth of government has been rapid by any measure.

The important point is that the increase in the relative size of the public sector does not necessarily imply something is “wrong” with the political process.

Explanations of this phenomenon include:

Citizen preferences, Marxist view, chance events, changes in social attitudes, income redistribution

Wagner’s law: the hypothesis that government services/expenditure rise at a faster rate than income.

2. Proposals to control the growth in government include:

Encouraging private sector competition, reforming the budget process, constitutional

amendments.

思考题：

1. What would lead to the voting paradox? What would be the effect of logrolling?

2. How could Arrow’s Impossibility The orem be understood?

3.What do Median voter theorem for elections and Niskanen’s model of bureaucracy implicate？What are the special interests?

4. How can the growth in government be explained and controlled?

Chapter 5 Deficit Finance

课时分配：9课时

教学要求：

通过本章学习使学生掌握赤字和债务方面的基本概念，并进一步把握债务负担的系列观点以及与税收融资相比债务融资的特点。本章重点为赤字的定义、债务负担、征税与举债的权衡。本章难点为迭代模型、新古典模型。

教学内容：

5.1 Basics of Deficit and Debt

1. Deficit:

The deficit during a time period is the excess of spending over revenues.

Surplus: The surplus during a time period is the excess of revenues over expenditures.

On-budget deficit (or surplus): it considers only on-budget activity.

Off-budget deficit (or surplus): it takes into account only off-budget activity.

2. Debt:

The debt at a given time is the sum of all past budget deficits. That means, the debt is the cumulative excess of past spending over past receipts.

Borrowing is an important method of government finance.

3. Official figures regarding the size of federal government deficits, surpluses, and debts must be viewed with caution for several reasons:

Government debt held by the Federal Reserve Bank.

State and local government debt.

Effects of inflation: Inflation erodes the real value of the debt; the official deficit

or surpluses does not reflect this fact.

Capital versus current accounting: The federal government does not distinguish between capital and current expenditure.

Tangible assets: Tangible assets owned by the government should be taken in to account.

Implicit obligations: such as promises to pay Social Security benefits.

5.2 The Burden of the Debt

1. Lerner’s View

Assume the government borrows from its own citizens—the obligation is an internal debt.

According to Lerner, an internal debt creates no burden for the future generation.

When a country borrows from abroad to finance current expenditure, the obligation is referred to as an external debt.

In this case, the future generation certainly bears a burden.

2. An Overlapping Generations Model

It takes into account a phenomenon that several generations coexist simultaneously at any given time.

⑴ Then the following results emerge:

As consequence of the debt and accompanying tax policies, the generation that was old originally has a lifetime consumption level higher than it otherwise would have had.

Those who were young and middle-aged originally are no better or worse off from the point of view of lifetime consumption.

The young generation originally has a life time consumption stream lower than it would have been in the absence of the debt and accompanying fiscal policies.

⑵ The natural framework for comparing across generations the burdens (and benefits) of government fiscal policies is called generational accounting.

It involves the some steps.

3. Neoclassical model

It stresses that when the government initiates a project, whether financed by taxes or borrowing, resources are removed from the private sector.

Crowding out hypothesis means that, when the public sector draws on the pool of resources available for investment, private investment gets crowded out.

Crowding out is induced by changes in the interest rate.

4. Ricardian model

It means that the form of government finance is irrelevant.

In effect, private individuals undo the intergenerational effects of government debt policy, so tax and debt finance are essentially equivalent.

5.3 Borrowing Compared with Taxing

Several factors influence whether a given government expenditure should be financed by taxes or debt.

1. Benefits-received principle:

The benefits-received principle suggests that if the project will benefit future generations, then having them pay for it via loan finance is appropriate.

2. Intergenerational equity:

If future generations are expected to be richer than the present one, some principles of equity suggest that it is fair to burden them.

3. Efficiency considerations:

From an efficiency standpoint, one must compare the excess burdens of tax and debt finance.

4. Macroeconomic considerations:

Functional finance: use taxes and deficits to keep aggregate demand at the right level, and don’t worry about balancing the budget by itself.

5. Moral and political considerations.

The views based on ethical and political standpoints.

思考题：

1. What is the connection between deficit and debt?

2. What are the views on the burden of debt?

3. What influence a given government expenditure should be financed by taxes or debt?

附录：参考书目

1. Harvey S. Rosen. Public Finance[M]. New York: McGraw-Hill, 200

2.

2. Holley H. Ulbrich. Public Finance in Theory and Practice[M]. 北京：清华大学出版社，

2004.

3. Arye L. Hillman. Public Finance and Public Policy: Responsibilities and Limitations of Government[M]. Cambridge University Press,2003.

4. Richard A. Musgrave. The Theory of Public Finance[M]. New York: McGraw-Hill, 2001.

5. N. Gregory Mankiw. Principles of Economics[M].New York: McGraw-Hill, 2000.

6．David N. Hyman. Public Finance: A Contemporary Application of Theory to Policy[M]. The Dryden Press,1996.

课时分配表

执笔人：毛翠英 2006年5月

审定人：吴美华 2006年5月

院负责人：杨抚生 2006 年6月