Public Economics

Module code: EC3080
Module co-ordinator: Professor Clive Fraser

Governments intervene in the economy extensively and (usually!) for very good reasons. For example, they provide goods and services such as education and healthcare when it is felt that otherwise too little of such goods would be provided, especially to poorer households. Governments also intervene to restrict the levels of harmful activities such as smoking and other externality generators like noise and atmospheric pollution, or to curtail over-charging by companies with monopoly power. As their activities must be financed, governments also intervene in the economy to raise funds via the taxation of goods and services (commodity taxation) and incomes. They also levy user charges for some of the goods and services that they provide.

In this module we will discuss why governments intervene in the provision of some goods and services, but not others, and why the interventions and their financing take the forms observed.

Topics covered

  • An international overview of government intervention in modern economies
  • Commodity taxation and welfare losses from commodity taxes
  • Providing varieties of shared goods (public goods, club goods and local public goods)
  • Externalities, the Coase Theorem and Pigouvian taxes
  • Poverty, inequality and redistribution
  • Income taxation
  • Regulating monopoly


  • 20 one-hour lectures
  • 8 one-hour seminars


  • Exam, 90 minutes (70%)
  • Coursework x 2 (15% + 15%)