1.

Class Title

Public Sector Finance & Development

credit value

12

standard / level

Masters (Diploma stage of Masters Programme by Open Learning)

core / optional

Optional

semester

semester 2 (except when taken by Open Learning)

pre-requisites

None

session

2005-06

2.

Contact details

Lecturer in Charge

Dr Mozammel Huq: DUN 4.30

telephone number

0141 548 3863

e-mail address

m.m.huq@strath.ac.uk

Administrator

Mrs Joyce Russell

telephone number

0141 548 3865

e-mail address

j.m.russell@strath.ac.uk

3.

Overview

The module will be taught using a combination of lectures and tutorials, covering a total of 18 contact hours. The lectures will cover the major issues specified in the syllabus.  In each session, time is also allocated for discussions, thus enabling the students to interact closely especially by bringing their first-hand experience to bear on the relevant development issues. 

The module aims to examine the functions of government, to consider the purposes and principles of taxation, and to analyse market failure, public policy and public expenditure.  Candidates will discuss the choice of government financing systems appropriate to the circumstances and objectives of developing countries.

4.

Syllabus

The topics covered in the module will be taught as shown below:

• State Finance in Developing Countries: Allocative, Distributive and Stabilisation Roles;
  
  
• Government Intervention: The Main Issues;
  
  
• Taxation in a Developing Economy; Principles of Tax Design; Varieties and Classification of Taxes; Taxation and Economic Efficiency;
  
  
• Deficit Financing in a Developing Country, and the Role of Foreign Aid;
  
  
• Allocation of Public Expenditure: Social Appraisal of Projects; and
  
  
• Failure of the LDC Financial System to Stimulate Economic Development and the Need for Public Sector Saving for Economic Development in Developing Countries.

5.

Class Materials

Reading

• Abisadeh, S and Yousefie, M (eds) (1996). Fiscal Systems and Economic Development: CaseStudies of Selected Countries.  New York:  Nova Science Publishers.
• Bain, A D (1992). The Economics of the Financial System. Oxford: Blackwell (2nd Edition).
• * Brown, C V and Jackson, P M (1990). Public Sector Economics. Oxford:  Blackwell (4^th Edition).
• Bird, R M and Oldman, O (eds) (1990). Readings on Taxation in Developing Countries. Baltimore: Johns Hopkins University Press (4^th Edition).
• Blejer, M I and Chu, Ke-young (eds) (1989). Fiscal Policy, Stabilisation and Growth in Developing Countries. Washington DC: International Monetary Fund.
• * Clunies-Ross, A and Huq, M (1997). Public Sector Finance in Developing Countries. Department of Accounting and Finance, Glasgow: University of Strathclyde (mimeo).
• Due, J F and Friedlaender, A F (1981). Government Finance: Economics of the Public Sector. Homewood (Illinois): Richard D Irwin (7^th Edition).
• * Goode, R (1984). Government Finance in Developing Countries.  Washington DC: Brooklings Institution.
• Huq, M (1989). The Economy of Ghana: The First 25 Years since Independence. London: Macmillan.
• Meier, G M and Rauch, J E (2000), Leading Issues in Economic Development. New York: Oxford University Press.
• * Stiglitz, J (2000). Economics of the Public Sector. New York:  Norton (3rd Edition).
• * Tanzi, V (1990). Public Finance in Developing Countries, London: Edward Elgar.
• World Bank (2000). World Development Report 2000/2001.  New York: Oxford University Press.

* Priority reading

6.

Assessment Structure

Two assignments will account for 50 per cent and the final examination for 50 per cent of the assessment.  The final examination will take place in the May/June diet of examinations.  The assignments will be submitted during the 2nd semester prior to the exams in May/June.  The final examination will comprise of essay elements and will take two hours.

The tutorial presentations, to be made in a group form, will help the students first, to learn from group work, and secondly, to benefit from questions and comments raised in the class. 

7.

Learning Outcomes

The module is offered in the belief that a strong understanding of the principles of public sector finance is essential for viewing the role a government in a developing country should play in the allocation and distribution of resources.In the process the students will gain experience in evaluating choices in economic policy in a way which takes into account the implications for economic efficiency, the distribution effects, and knowledge about social behavior and institutions.

On completing this course the students will be able to:

• appreciate the range of methods available for financing the public sector;
  
  
• view the role of public policy and examine the need for public expenditure in situations of market failure;
  
  
• identify and explain the administrative and political factors that may constrain the choice of a tax system in a developing country;
  
  
• evaluate the administrative, equity and efficiency considerations that may be important in the choice between different categories of direct and indirect tax in the construction of a tax system in a developing country; and
  
  
• appreciate the problems of allocating expenditure for efficient resource utilisation.

During the course the students will develop:

• skills in decision-making:
  
  
• an appreciation of some pressing development issues in developing countries, especially in savings growth and capital formation;
  
  
• an understanding of the role of abstract analysis focusing on public and private sector participation in economic development.

8.

Elements of Teaching

The module will be taught using a combination of lectures and tutorials, covering a total of 18 contact hours. The lectures will cover the major issues specified in the syllabus.  In each session, time is also allocated for discussions, thus enabling the students to interact closely especially by bringing their first-hand experience to bear on the relevant development issues. 

The module aims to examine the functions of government, to consider the purposes and principles of taxation, and to analyse market failure, public policy and public expenditure.  Candidates will discuss the choice of government financing systems appropriate to the circumstances and objectives of developing countries.

9.

Teaching Staff

Mozammel Huq

10.

Additional Information

The students will be given copies of transparencies used for the lectures. Additional reading materials will also be given to the students.

11.

Complaints Procedure, Equal Opportunities and Disability Service

Information on the University’s Complaints Procedure, Policy on Equal Opportunities and Provision for Students with Special Needs is contained in the MSc EMP Handbook 2005-06. This information is also available on the Faculty’s Undergraduate Student Handbook and on the University’s web pages: http://www.strath.ac.uk

Students’ with Special Needs should see the Module Administrator, Joyce Russell, as soon as possible.  Students who believe they may need additional support or equipment, but have not spoken to anyone in the University about it yet should also contact the University’s Disability Service, Level 4, Graham Hills Building, tel: 0141 548 3402, web: http://www.mis.strath.ac.uk/SSS/