This course introduces to students the tools for analyzing the role of state (government) in the economy. It discusses the justification for government intervention in a market economy, analyzes the key area of government policy in public finance. The topics covered in this course are Efficiency and market, Rationales for Government Intervention, Market Failure, Cost-Benefit Analysis, Equity and Rationale for Income Redistribution, Income Support for the Poor, Social Insurance and Tax Incidences.

CILO-1: Demonstrate the recognition on the roles of government in the economy. CILO-2: Recognize what is externalities and identify the justifications for government interventions in the provision of public goods. CILO-3: Assess the ways in financing public expenditure, and criticize their appropriateness; to diagnose how taxation affect price level, efficiency and income distribution. CILO-4: Identify and explain the rationales of public provision of social security, society insurance and health care and assess their efficiency.