Public Sector Economics

Market failure due to market power, asymmetric information, externality, public goods, equality, macro imbalances.The changing role of government in transitional economiesCases: Public sector role in Vietnam and Singapore

Required Readings:

*Jonathan Gruber (2011), Chapter 1

*Joseph E. Stiglitz (2000), Chapters 1

Optional Readings:

Richard W. Kopcke, Geoffrey M. B. Tootell, và Robert K. Triest (2006), Chapter 1.

Anthony Saich, The Changing Role of Government, Background Note for the World Bank Report on China's 11th Five Year Plan, August 2004.

Importance of political factors in determining tax policyTradeoffs among conflicting economic, political, and social policy objectivesCase: Alcohol Excise Tax in Thailand.

Required Readings:

*Jonathan Gruber (2011). Chapter 9

*Aswin Techajareonvikul, Liquor Tax Reform in Thailand: Competing Interests and Objectives, KSG Case No. CR14-06-1857.0.

Optional Readings:

The Economist (1999). "The Grabbing Hand." February 13, 350(8106): 76.

Interventions to mitigate market failuresPublic and quasi-public goodsCases: Examples from Vietnam

The role of the SOE in several economiesRole and Efficiency of SOEsPolitical economy of state ownership and privatization

Required Readings:

*Joseph E. Stiglitz (2000). Chapter 8

*Vũ Thành Tự Anh, "SOEs fall short of being driving force," Thời báo kinh tế Sài Gòn, Thứ Năm, 21/10/2010.

Recap of market failure, government failureCase: Cancun. Mexico: Water and wastewater privatization in Mexico

Rationale for private participation in infrastructure (PPI)Types of PSP/PPPCases: Infrastructure PPPs in Vietnam

Required Readings:

*Edward R. Yescombe (2007). Chapter 1 & 2, from Public-Private Partnership: Principles of Policy and Finance, Elsevier Ltd.

Social expenditures in developing and transitional economiesCase: Health and education expenditures in Vietnam

Require Readings:

*Vũ Hoàng Linh, Lê Việt Thủy, and Giang Thành Long (2010). "Access and Equity in Tertiary Education in Vietnam", draft, commissioned by the World Bank's East Asia Regional Office.

*Giang Thành Long (2010). "Reaching a Universal Health Insurance in Vietnam: Challenges and the Role of Government," Asia-Pacific Development Journal, Vol. 18, No. 1, June 2011.

*Vietnam: Managing Public Expenditure for Poverty Reduction and Growth – Public Expenditure Review and Integrated Fiduciary Assessment, Vol. 1: Cross Sectoral Issues, "Executive Summary" (Washington, D.C.: World Bank, April 2005), pp. ix-xxv. [Can be accessed for free in English and Vietnamese at: http://www-wds.worldbank.org]

Optional Readings:

Jonathan Gruber (2011), Chapter 11 & 12

POLICY MEMO #2 (THE BIG DIG) DISTRIBUTED IN CLASS: DUE ON 3/1

Social security reforms in the world and developing economies.Case: Social security policy in Vietnam

Required Readings:

*Jonathan Gruber (2011), Chapter 13, "Social Security Reform"

Optional Readings:

Paul Krugman (2005) "Confusions about Social Security," The Economists' Voice: Vol. 2: Issue. 1, Article 1.

The nature and implications of megaprojectsPolicy discussion: Megaprojects in Vietnam (Bullet train, Dung Quat Refinery, Long Thanh International Airport, Hanoi Planning) Case: Big dig

Required Readings:

*Alan Altshuler and David Luberoff, "Mega-Projects and Urban Theory" and "Urban Theory Redux," Chapters Three and Eight in Mega-Projects: The Changing Politics of Urban Public Investment (Washington, D.C. and Cambridge, MA: Brookings Institution Press and Lincoln Institute of Land Policy, 2003), pp. 45-75 and 248-269.

Optional Readings:

Bent Flyvbjerg, Mette Skamris Holm, and Soren Buhl, "Underestimating Costs in Public Works Projects: Error or Lie?" in Journal of the American Planning Association, Summer 2002 (Vol. 68, No. 3), pp. 279-295.

Public investment structurePreliminary Assessment of Public Sector PerformancePolicy Discussion: Public investment Decentralization in Vietnam

Required Readings:

*Vũ Thành Tự Anh, "SOEs without capability to lead" Saigon Economics Review, Thứ Năm, 21/10/2010.

Expenditure efficiency and effectiveness; Comparative performance measurement and Policy discussion: assessment of ministries and local governments' performance

Required Readings:

*Joseph E. Stiglitz, "The Analysis of Expenditure Policy" Chapter 10 in Economics of the Public Sector.

*CECODES, Vietnamese Fatherland Front and UNDP (2010). PAPI 2010.

*VCCI (2011). Ministerial Effectiveness Index 2011 (MEI).

Causes of government failure; Unintended consequences of government interventions and Policy discussion: Government failure and macroeconomic instability in Vietnam

Taxation and social fairness: a tax burden perspective; Features of a Sound Tax Regime and Tax burden allocationPolicy discussion: Examples from Vietnam

Required Readings:

*Jonathan Gruber (2011), Chapter 19

*Joseph E. Stiglitz (2000), Chapter 18

Optional Readings:

Michael Keen and Alejandro Simone, "Tax Policy in Developing Countries: Some Lessons from the 1990s and Some Challenges Ahead," Chapter 12 in Sanjeev Gupta, Benedict Clements, and Gabriela Inchauste, eds., Helping Countries Develop: The Role of Fiscal Policy (Washington, D.C.: International Monetary Fund, 2004), pp. 302-52.

Arthur Okun (1975). "The Leaky Bucket Experiment," in Equality and Efficiency: The Big Tradeoff. The Brookings Institution, pp. 91-100.

Joel Slemrod and Jon Bakija (2008). Chapter 4: "Taxes and Economic Prosperity," in Taxing Ourselves, pp.112-36.

Taxation and its economic inefficiency; Theory of optimal taxation and Policy discussion: Tax impact on labor and saving

Required Readings:

*Joseph E. Stiglitz (2000), Chapter 19 & 20

Tax on land and buildings in general and Policy discussion: non-arable land tax in Vietnam

Required Readings:

*WB (2011), Chapter 9: Tax on Land and Assets

*Jay K. Rosengard, "Introduction" Chapter 1 in Property Tax Reform in Developing Countries (Boston: Kluwer Academic Publishers, 1998), pp. 1-30.

*Jay K. Rosengard, "Indonesia Case Study," Chapter 5 in Property Tax Reform in Developing Countries (Boston: Kluwer Academic Publishers, 1998), pp. 111-156.

Optional Readings:

William G. Gale and Joel Slemrod (2001). "Overview" In William G. Gale, James R. Hines Jr., and Joel Slemrod, eds., Rethinking Estate and Gift Taxation. Brookings Institution Press.

PROBLEM SET #1 (ECONOMICS OF TAXATION) DUE

Personal and corporate income tax in general and Policy discussion: Personal and corporate income tax Reform in Vietnam

Required Readings:

*Joseph E. Stiglitz, "The Personal Income Tax," Chapter 21 in Economics of the Public Sector.

*Janet Stotsky, "The Base of the Personal Income Tax" and "The Choice of Taxable Unit" and John Norregaard, "The Progressivity of Personal Income Tax Systems" in Parthasarathi Shome, ed., Tax Policy Handbook (Washington, D.C.: International Monetary Fund, 1995), pp. 121-136.

General sales and companion use taxes, excise taxes, value added taxes and Policy discussion: Comparison of sales and value added taxes

Required Readings:

*WB (2011), Chapter 7: VAT

*Jonathan Gruber (2011). Section 25.3: "Consumption Tax," pg. 754-763.

WEDNESDAY, 4/10: MIDTERM EXAM

Tax avoidance and tax evasion; Positive and negative incentives and Policy discussion: Examples from selected countries

Required Readings:

*Joseph E. Stiglitz, "A Student's Guide to Tax Avoidance," Chapter 24 in Economics of the Public Sector.

*WB (2011). Chapter 2: Tax Compliance and Sources of Revenue Leakage: Conceptual Framework and Assessment.

Optional Readings:

Richard K. Gordon, Jnr., "Improving Tax Compliance – Income Tax Compliance and Sanctions in Developing Countries," in Bird and Oldman, Taxation in Developing Countries, Fourth Ed. (Baltimore: Johns Hopkins University Press, 1990), pp. 453-465.

Richard A. Musgrave, "Reaching the Hard-to-Tax – Income Taxation of the Hard-to-Tax Groups," in Bird and Oldman, Taxation in Developing Countries, Fourth Edition (Baltimore: Johns Hopkins University Press, 1990), pp. 297-309.

Joel Slemrod (2007). "Cheating Ourselves: The Economics of Tax Evasion." Journal of Economic Perspectives, 21(1), Winter 2007, pp. 25-48.

Required Readings:

*Phan Hiển Minh, Nguyễn Ngọc Thanh, and Châu Thành Nghĩa, Tổng quan về thuế, Chương I, Giáo trình Thuế thực hành ("Overview of Taxation," Chapter I in Practical Taxation Handbook), (Hanoi, Vietnam: Statistics Press, 2001), pp. 1–10.

*WB (2011) Chapter 8: Taxation In Vietnam: Who Pays What?

Rationale for, obstacles to, and lessons of tax reform; Independent revenue authorities and Cases: Examples from selected countries

Required Readigns:

*Jonathan Gruber (2011). Chapter 25

*Joel Slemrod and Jon Bakija (2008). Chapter 6: "Elements of Fundamental Reform," Taxing Ourselves, Russell Sage Foundation.

*WB (2011). Chapter 5: Tax Reform and Revenue Assignments in Vietnam.

Optional Readings:

Mack, Connie et al. (2005). "Executive Summary of Simple, Fair and Pro-Growth: Proposals to Fix American's Tax System. Report of the President's Advisory Panel on Federal Tax Reform. http://www.taxpolicycenter.org/

Tax reform in developing and transitional economies and Case: VAT reform in Vietnam

Required Readings:

*International Monetary Fund, "Tax Policy – Medium Term Challenges" in Vietnam Country Report, December 2003, pp. 24-31.

*Ministry of Finance (2011), Vietnam Comprehensive Tax Reform Plan 2011-2015

Taxes vs. user charges (fees); Types and structures of user charges and Case: HCMC-Trung Luong Highway

Required Readings:

Ronald C. Fisher, "Pricing of Government Goods: User Charges," in State and Local Public Finance, 3rd ed. (Chicago: Richard D. Irwin, 1996), pp. 170-196.

Tradeoffs in maintaining a balanced budget; Alternatives for financing fiscal deficits and Policy discussion: Fiscal Deficits and Deficit Financing in Vietnam

Required Readings:

*Jonathan Gruber (2011). Chapter 4

Public debt, government debt, and SOE debts; Public debt crisis and US and EU fiscal space and Public debt risk managementPolicy discussion: public debt in Vietnam

Required Readings:

*Vũ Thành Tự Anh, "Nợ công, nợ chính phủ, và nợ của doanh nghiệp nhà nước" (Public debt, government debt, and SOE debts)

*Moody's Analytics (2011). Fiscal Space. Special Report, December 12, 2011.

*World Bank (2009). Debt Management Performance Assessment (DeMPA) Tool. Truy cập miễn phí từ: http://siteresources.worldbank.org/

Rationale for fiscal decentralization; Deconcentration, delegation, devolution, and transfer of functions; Measuring and evaluating fiscal decentralization and Cases: Examples from selected countries

Required Readings:

*Anwar Shah, Fiscal Decentralization in Developing and Transition Economies: Progress, Problems, and the Promise, World Bank Policy Research Working Paper No. 3282 (Washington, D.C.: World Bank, April 2004). [Can be accessed for free at: http://www-wds.worldbank.org]

*Vũ Thành Tự Anh (2012). "Economic Decentralization in Vietnam: An Institutional Perspective."

Optional Readings:

Bambang Brodjonegoro, Three Years of Fiscal Decentralization in Indonesia: Its Impacts on Regional Economic Development and Fiscal Sustainability, Paper Presented at the International Symposium on Fiscal Decentralization in Asia Revisited, Hitotsubashi University, Tokyo, February 2004.

Fiscal decentralization in developing and transitional economies and Cases: Indonesia and Vietnam

Resource allocation options; Revenue sharing grant formulas and Case: Fiscal decentralization and resource transfers in Vietnam

Required Readings:

*Ronald C. Fisher, "Intergovernmental Grants," in State and Local Public Finance, Second Edition, pp. 202-234.

*Odd-Helge Fjeldstad, Intergovernmental Fiscal Relations in Developing Countries: A Review of Issues, WP 2001: 11 (Bergen: Chr. Michelsen Institute, 2001), pp. 1-15.

[Can be accessed for free at: http://www.cmi.no/publications/2001/wp/wp2001-11.pdf]

Local revenue sources; Deficit Financing Local budget expenditures and Stability and sustainability of the local budget

Required Readings:

*Jay Rosengard et al. "Paying for Urban Infrastructure and Services: A Comparative Study of Municipal Finance in Ho Chi Minh City, Shanghai and Jakarta," Prepared under United Nations Development Program Project No. 5088790-01, "UNDP-Vietnam Discussion Papers on Topics Relating to Decentralization and Economic Performance," 2006

*Ronald C. Fisher, "Borrowing and Debt," in State and Local Public Finance, Second Edition, pp. 235 – 267.

* Đỗ Thiên Anh Tuấn (2013). "Municipal Debt and Bond"

Optional Readings:

Judy Wesalo Temel, "Overview of the Municipal Bond Market" and "The Basics of Municipal Securities," Chapters 1 and 2 in The Fundamentals of Municipal Bonds, Fifth Ed. (New York: John Wiley & Sons for The Bond Market Association, 2001), pp. 1-48.

Robert D. Behn and Elizabeth K. Keating, Facing the Fiscal Crises in State Governments: National Problem; National Responsibilities, John F. Kennedy School of Government Faculty Research Working Paper RWP04-025 (Cambridge: Kennedy School of Government, June 2004), pp. 1-15.[Can be accessed for free at: http://www.ksg.harvard.edu/

The relationship and Cases: Da Nang and Binh Duong Public Finance Models