Regional and Local Public Economics

Regional and Local Public Economics builds on previous courses (Public Sector Economics, Public Finance, Tax System), and focuses on the discussion of the fiscal relationships between central and regional governments and the centralization versus decentralization of fiscal practices. In this course, I try guide students to analyze the behavior of governments as economic agents through the lens of decentralized public finance, rather than focusing on the system of taxation and expenditures itself.

Here you can find the information for parts two (decentralization of govt expenditure & inter-govt grants) and three (internatioanl comparison & policy analysis) of it. The first part of the course (decentralization of taxation) is taught by Andreu Arenas.

There are 16 two-hour lectures in my part:

1. Theory 2: Decentralization of Government Expenditure (4 lectures)
   
   1. Government levels and functions (0311) slides 1; slides 2
      
   2. Key elements and the optimalization problem of decentralization (0314) slides
      
   3. Optimal jurisdiction size for expenditure responsibilities (0318) slides
      
   4. Mobility, Congestion, and Clustering + In-class unit exercise (0321) slides
      
      
2. Theory 3: Intergovernmental Grants (4 lectures)
   
   1. Intergovernmental grant and its functions (0404) slides
      
   2. Analyzing intergovernmental grants: modelling (0415) slides
      
   3. Effects of intergovernmental grants: theoretical implications (0418) slides
      
   4. Effects of intergovernmental grants: empiric + In-class unit exercise (0422) slides
      
      
3. Application 1: International Cases and Hot Issues (4 lectures)
   
   1. Fiscal Decentralization of Spain (+ Taxation and Mobility) (0425) slides 1; slides 2
      
   2. Fiscal Decentralization of Canada (+ Equalizing Grants) (0429) slides
      
   3. Fiscal Decentralization of China (+ Land Finance) (0506)
      
   4. Fiscal Decentralization of Germany (+ SNG Debts & Debt Brake) (0509)
      
      

4. Continuous Assessment: midterm exam (1 lecture) (0502)
   
   

5. Application 2: Policy analysis and Empirical Methods (4 lectures)
   
   1. Education and Fiscal Decentralization (Method: Diff-in-Diff 1)
      
   2. Health and Welfare and Fiscal Decentralization (Method: Diff-in-Diff 2)
      
   3. Public Transportation and Fiscal Decentralization (Method: Instrumental Vairables)
      
   4. Fiscal Decentralization and Local Economic Development (Method: Regression Discontinuity)
      
      

I thank Candan Erdemli, Zelda Brutti, Dirk Foremny and Ha Luong for course materials compiled in previous years, and Erik Sarrazin and Julia McGee for useful information on country-specific cases.

The main textbook for the theory parts is State and Local Public Finance by Ronald C. Fisher. The main references for country-specific cases are Forum of Federations Handbook of Fiscal Federalism and the OECD/UCLG SNG-WOFI. Course materials and notifications are updated on Virtual Campus.