Public Finance (Finance) A - L

Academic Year 2023/2024 - Teacher: MARINA CAVALIERI

Expected Learning Outcomes

Knowledge and understanding: students will acquire in-depth knowledge and understanding of the role that the State plays in modern market economies by means of financial tools and the definition of the game’s rules that all members of the society have to respect as far as their economic behaviour is concerned. The student will develop the understanding of the complex State’s decision-making process with regard to allocation, stabilization and redistribution functions. 

Applying knowledge and understanding: students will be able to properly evaluate the problems regarding the State’s presence in an economic system where different subjects, either public or private for-profit or private not-for-profit, interact.

Making judgements: students will acquire the ability to employ the economic approach to formulate their personal opinion, critical and freestanding, on those aspects that concern the State’s presence in a complex economic system, where subjects are expected to act in their own self-interest.

Communication skills: students will be able to communicate, in a clear and unambiguous way, to either experts or non-experts, their opinion concerning the State’s role in the modern economic systems, also through written works, diagrams and graphs, employing the existing information technologies for the presentation, acquisition and exchange of knowledge. Evaluation of the communication skills, in a concise and/or analytic form, will take place formally during the written exam, leaving the possibility to evaluate students’ communication skills also through interactive interventions during the in-class lectures.

Learning skills: students will acquire a high learning capacity that will allow them to be autonomous in the management of their professional updating process concerning the evaluation of the activities that the State has to undertake in an economic system, through both budget management and regulation. This type of knowledge is nowadays of increasing importance, mainly because of the debate on the best way to implement privatization policies.

Course Structure

The course includes lectures, carried out with the support of slides and supplementary teaching material that is made available to students through the Studium on-line platform. In order to consolidate the understanding of the topics and the analytical skills of the students, during the planned lectures, some classroom exercises will be done.

Required Prerequisites

No formal prerequisites. A knowledge of the basic concepts of Microeconomics is very useful and is therefore recommended.

Attendance of Lessons

Although not compulsory, it is strongly recommended to attend the lessons.

Detailed Course Content

The first part of the course program focuses on the study of the general principles of the State’s intervention in the modern market economies. The program goes on with the theory of government revenues, paying special attention to the distortive effects of taxation. The fundamentals of the fiscal decentralization are also considered. 

Textbook Information

1. Balestrino A., Galli E., Spataro L., (2023) Scienza delle Finanze, UTET, Torino.

or its previous edition: 

2. Balestrino A., Galli E., Spataro L., (2019) Scienza delle Finanze, UTET, Torino.

Course Planning

 SubjectsText References
1Introduction to the study of public intervention in market economiesFirst part, ch.1 (p 5-24)
2Economic tools for the analysis of public interventionFirst part, ch 1 (appendix p. 25-34)
3Welfare economics and public interventionFirst part, ch 1 (p. 5-24) and ch 3 (p.54-60)
4Reasons for public intervention (first part)First part, ch 2 (p. 35-49)
5Reasons for public intervention (second part)First part, ch 2 (p. 35-49)
6Public goods (first part)First part, ch. 1 (p. 71-90)
7Public goods (second part)First part, ch. 1 (p. 71-90)
8Collective choices (first part)Second part, ch. 1 (p. 143-160)
9Collective choices (second part)Second part, ch. 1 (p. 143-160)
10Retirement systemThird part, ch. 2 (p. 217-224; 229-234)
11The health care systemThird part, ch. 4 (p. 258-265; 274-277)
12Social security and programs for the poorThird part, ch. 5 (p. 279-284; 290-299)
13Tax systems: an introductionFourth part, ch. 1 (p. 303-322)
14Tax efficiency and distortions (first part)Fourth part, ch. 2 (p. 323-337)
15Tax efficiency and distortions (second part)Fourth part, ch. 2 (p. 338-347)
16Personal income taxes (first part)Fourth part, ch. 3 (p. 348-361)
17Personal income taxes (second part)Fourth part, ch. 3 (p.348-361)
18Consumption taxesFourth part, ch. 3 (p. 362-370)
19The Italian Personal Income TaxFourth part, ch. 4 (p. 374-406) 
20The theories of fiscal federalismFifth part, ch. 4 (p. 417-433)
21Fiscal federalism: rationale and forms of governmentFifth part, ch. 4 (p. 434-444)

Learning Assessment

Learning Assessment Procedures

The assessment is based on a written exam that includes open-ended questions and simple mathematical and graphical problems. the evaluation criteria are: 1) knowledge, 2) use of the appropriate technical language, 3) reasoning ability.

Examples of frequently asked questions and / or exercises

A sample exam and exercises will be available on the Studium on-line platform.