TEL: +254-(0) 20 2696596;

P.O. Box 1100-20300, Cell: +254 713-552761/ (0)736-299961

NYAHURURU, [email protected]; www.laikipia.ac.ke
KENYA

DEPARTMENT OF ECONOMICS

COURSE OUTLINE

PROGRAMME: BSC (ECON-STAT)/ BA (ECON-SOCI)

COURSE CODE: ECON 213
COURSE TITLE: Public Sector Economics
CF: 3.0
COURSE LECTURER: Miss Mary Mang’eli Email: [email protected]
Mobile no: 0712-386879

Course Purpose
It introduces students to welfare economics and analysis of key issues in public expenditure policies
that affect individual behaviour and how the government sets policies

Course Objectives
At the end of the course student should be able to:
(i) Explain the reasons of market failure
(ii) Demonstrate good understanding of the role of government in an economy
(iii) Explain the concept of edge worth box and pareto optimality
(iv) Explain the effects of spill over in economic decisions
(v) Analyse loses in markets and their traces to economic agents.
(vi) Analyse public sector problems and expenditure policies
Mode of Delivery
There will be three hours face-to-face lecture sessions per week. Students will also be given hand-
outs and are expected to read them before each lecture session to enable active participation.

Contact Hours
Monday 11- 2 PM
Consultation hours: Monday 3- 5 PM Lecturer’s Office

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COURSE CONTENT AND DELIVERY PLAN
WEEK/DATE TOPICS/SUB-TOPICS
WEEK 1 TOPIC 1: INTRODUCTION TO PUBLIC SECTOR
ECONOMICS
Definition of Public Sector
Importance of the Public Sector
Measuring the size of public sector

WEEK 2 TOPIC 2. OVERVIEW OF WELFARE ECONOMICS

Meaning of welfare economics
Pareto optimal criteria for social welfare
Perfect competition and economic efficiency
Theory of second best

WEEK 3&4 TOPIC 3. MARKET FAILURE: THE RATIONALE FOR

GOVERNMENT INTERVENTION
Meaning of market failure
Sources of Market failure
Roles of Government
Government Failure: Government Failure defined and Causes of
Government failure

WEEK 5 CAT ONE

WEEK 6&7 TOPIC 4: THEORY OF PUBLIC GOODS

Definitions of public; private and impure goods
Other type of goods: merit goods, club goods
Characteristics of public goods
Efficient / optimal provision of public goods
Free rider problem

WEEK 8 TOPIC 5: EXTERNALITIES

Definitions
Types of externalities
Consequences of externalities
Corrective mechanisms (Private and Public responses)

WEEK 9 TOPIC 6: PUBLIC CHOICE THEORY

 Public choice in direct democracy
 Public choice in representative democracy
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  Models of Public participation and voting.

WEEK 10
CAT 2 Take away Group Work Presentations

WEEK 11 TOPIC 7: THEORY OF PUBLIC EXPINDITURE

• Meaning of Public expenditure
• Uses of Public expenditure
• Principles of Public expenditure
• Theories of public expenditure growth
• Public expenditure in Africa: Income distribution;
Poverty reduction; Social insurance

WEEK 12 TOPIC 8: EVALUATION OF PUBLIC EXPENDITURE

PROGRAMMES
• Benefits and Costs from Public enterprises/projects
• Public enterprise pricing
• Evaluation Criteria

WEEK 13 TOPIC 9: PUBLIC BUDGET

• Importance of budgeting
• Types of budgets
• Principles of budgeting

WEEK 14 & END OF SEMESTER EXAMS

15

Course Evaluation:

Type Weighting (%)

Examination 70
Coursework 30
CAT 1 (Supervised CAT) 20
CAT 2 (Take Away Assignment) 10

Total 100 %

REFERENCES

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Core reading material for course
Artkinson, A.B and J.E, Stiglitz (1980): Lectures in Public Economics. New York,
McGraw- Hill
Barley, S.J. (2002). Public Sector Economics Theory and Practice. 2nd edition. New
York Palgrave
Recommended reference material
Hillman, A.L (2009). Public Finance and Public policy- Responsibilities and limitations
of Government. Cambridge. Cambridge University Press
Howard, M (2001). Public Sector Economics for Developing Countries. Kingston 7.
University of West Indies Press
Krueger, A.O (1990) “Government Failure in Development” in the Journal of Economic
Perspectives 4(3)
Layard, R and S. Glaisten (1994) Cost Benefit Analysis. 2nd ed. Cambridge. Cambridge
University Press

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