Face-to-face , first term, 30 hours of theory.

First term
Tuesday from 13:00 to 15:00 at 119 Marais 1200

This course is taught in French. The slides are provided in French. The textbook used in this course is in English.

At the end of this course, students should be able to analyse the costs and benefits of public policies in terms of efficiency and equity.
The first part of the course treats the normative analysis of the role of the state in the economy. We start by introducing the economic problem as a coordination problem, and we discuss different possible coordination mechanisms. Next, we study under what conditions the market can provide an efficient solution to the economic problem, and the various reasons for market failures. We study the provision of public goods, and analyse the origins of and solutions to externalities. We analyse economic inequality and different reasons for the redistribution of wealth and incomes. And, finally, we consider the process of collective decision-making.

The second part of the course studies in more details the actual public expenditures and tax system in Belgium and abroad. First, we use the budget and the national accounts to study the structure and evolution of public expenditures in Belgium, and we consider the various reasons for the growth of the public sector.
Next, we analyse the Belgian tax system on the basis of the national accounts, and from a historical and comparative perspective. We study the economics of taxation, with a particular focus on the efficiency and incidence of taxes. And we provide a first introduction to the principles of optimal taxation.
Finally, we study the economics of public debt.

The third part of the course introduces the principles of fiscal federalism, and analyses the federal structure of Belgium.

For the Bachelor in Law :

For the Bachelor in Business Engineering :

For the Bachelor in Economics and Management :

For the Bachelor in Business Engineering :

For the Bachelor in Economics and Management :

1. Introduction: the economic problem and public finance (Rosen & Gayer, Chap. 1 & 2)
2. The efficiency of markets: theoretical toolbox (Rosen & Gayer, Chap. 3)
3. The efficiency of markets 2: the two fundamental theorems of welfare economics (Rosen & Gayer, Chap. 3)
4. Public goods (Rosen & Gayer, Chap. 4)
5. Externalities (Rosen & Gayer, Chap. 5)
6. The analysis of economic inequality and income redistribution (Rosen & Gayer, Chap. 12)
7. Political economy (Rosen & Gayer, Chap. 6)
8. Public expenditure (partially: Rosen & Gayer, Chap. 6)
9. Taxation and the Belgian tax system
10. The economics of taxation: efficiency and incidence (Rosen & Gayer, Chap. 14-15)
11. Optimal taxation (Rosen & Gayer, Chap. 16)
12. Public debt (Rosen & Gayer, Chap. 20)
13. Fiscal federalism and the Belgian federal system (Rosen & Gayer, Chap. 22)

The course formally develops the classical theory of public finance, and focuses extensively on the Belgian context. The course pays in particular attention to an intuitive understanding of the theory, real world applications and current public debates.

Written exam.

The textbook of this course is:
Harvey S. Rosen and Ted Gayer (2014) Public Finance, Global Edition, MacGraw-Hill, New York.
The slides of the course will be made available on eSaintlouis