Second part of a two-quarter sequence in the economics of state and local governments; students can take either one or both of the courses. Goals of class: Use applied tools of microeconomics to analyze the expenditure and service provision decisions of state and local governments in the United States. Apply the theory of market failure to analyze public sector spending decisions. Evaluate privatization and/or outsourcing decisions on efficiency and equity grounds, drawing examples from parks and recreation, transportation, and/or other sectors. Use economic theory of fiscal federalism to analyze role of intergovernmental grants, with focus on Medicaid and public education. Analyze use of debt finance for capital projects. Investigate effectiveness of economic development programs. Prerequisites: the two-quarter core sequence in microeconomics, PP32300 and PP32400, or their equivalent.
