In recent times not only have traditional areas of public economics such as taxation, public expenditure, public sector pricing, benefit cost analysis, and fiscal federalism thrown up new challenges but entirely new areas of research and inquiry have emerged. This second edition builds upon the strengths of the previous edition and incorporates results of research on new areas such as global public goods, environmental taxation and carbon permits trading and the complexities of corporate taxation in a rapidly globalizing world.

The book is a modern and comprehensive exposition of public economics. It includes extended discussions on topics of particular interest to developing countries and covers subjects such as:

  • taxation in an economy with a large informal sector
  • the challenges of using VAT
  • the use of randomized evaluation
  • theory of public expenditure and public goods including global public goods
  • incentive effects of taxation and tax incidence

This book discusses the major traditional areas of taxation and public expenditure as well as emerging issues relating to public economics in the globalized world economy. It will be useful as a reference and update on the modern literature on public economics for professional economists and policymakers, as well as providing invaluable information as a basic text for undergraduate and graduate students in public economics.

part I|74 pages

Welfare economics

chapter 1|25 pages

A quick primer on consumer demand

chapter 2|26 pages

Perfect competition and Pareto optimality

chapter 3|21 pages

Forms of the social welfare function

part II|77 pages

The theory of public expenditure

chapter 4|16 pages

External effects and the market mechanism

chapter 5|26 pages

The theory of pure public goods

chapter 6|31 pages

Topics in the theory of public goods

part III|255 pages

The theory of taxation

chapter 7|29 pages

The effects of taxes on savings

chapter 8|22 pages

Taxation and labor supply

chapter 10|15 pages

Taxation and risk taking

chapter 11|24 pages

The theory of tax incidence

chapter 12|31 pages

Tax incidence in dynamic models

chapter 13|24 pages

Some results in commodity taxation

chapter 14|31 pages

Aspects of income taxation

chapter 15|25 pages

Topics in the theory of taxation

chapter 16|24 pages

Tax reform

part IV|114 pages

Applied problems in public economics

chapter 17|34 pages

Pricing in the public sector

chapter 18|19 pages

International aspects of taxation

chapter 19|16 pages

Tax incentives and corporate taxation

chapter 20|10 pages

Global public goods

part V|46 pages

Fiscal federalism

chapter 23|20 pages

Issues in fiscal federalism

chapter 24|24 pages

Grants and taxes in federal countries