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Public Sector Economics


Admission requirements

Pre-requirement for exchange students: in order to be considered for this course, students must have completed during their prior studies at least one university-level course in economics covering the main principles of micro- and macro-economic theory (e.g. consumer and producer behavior, markets, economic growth, unemployment, inflation, balance of payments deficits).

Course material, readings et cetera will be in English, but language of instruction during lectures and Q&A-seminars is Dutch


Public Sector Economics, also known as Theory of Public Finance, focuses on the impact of public finances on the economy (and vice versa). This involves the provision of goods and services (including infrastructure, education, a cleaner environment), macroeconomic development (unemployment, inflation) and income redistribution (including social security, taxation).
The Ba1-course Principles of Economics emphasized on markets as organizing institutions where price mechanism plays a vital role. However, markets fail, leaving grounds for government intervention. In many OECD countries the public sector budget is over half of gross domestic product. So there is reason to pay attention to the field of public sector economics / public finance.
The Ba2-course Public Sector Economics focuses on economic analyses of government interventions and the interaction between government and markets. The course builds primarily upon microeconomic theory. Besides efficiency considerations also equity is used in the application of economic knowledge. The objective for the students is to provide them the perspective of welfare theory.
After a brief introduction of the main theoretical aspects of markets and modern welfare theory, the course addresses market failure (such as public goods, externalities and information problems) and related public solutions and government instruments. After considering public choice and ‘government failure’ the course elaborates on financing of the public sector (tax theory and practice). This course also analyzes from a macroeconomic perspective: theory and practice of Dutch fiscal policy.

Course objectives

This course presents the principles of public sector economics and shows the implications thereof for public economic policy. By the end of this course:

  • Students will have acquired knowledge of the principles of public sector economics.

  • Students will be able to understand the vast theories of public sector economics.

  • Students will be able to independently study and analyse main questions in the field of public sector economics.


On the Public Administration front page of the E-guide you will find links to the website and timetables, uSis and Blackboard.

Mode of instruction

Seven weeks course in the period September -October. Each week consists of two lectures and one Q&A-seminar (6 hrs per week).

  • During the lectures (14 × 2 hrs), the main issues in the required reading will be identified and discussed. The focus will be on understanding the concepts and theories in public sector economics.

  • In the weekly Q&A-seminars (6 × 2 hrs), students will apply their knowledge. Each week, the homework consists of preparing multiple choice questions and study problems. In class, students will discuss their solutions for the problems. Applying the concepts and theories, and explaining this to each other increases the knowledge and understanding of public sector economics. Furthermore, it also provides a good preparation for the mid-term exam and the final exam.

  • Exam training (1 × 2 hrs). In the last week of the course a test exam will be discussed. The test exam will be posted on Blackboard.

Other methods of instruction

  • We link this course directly to a website to indicate that additional content on a subject can be found online, as web-based question and learning objectives.

  • Course material, readings et cetera will be in English, but language of instruction during lectures and Q&A-seminars is Dutch.

Course Load

Total study load: 140 hrs

  • contact hours: 28 hrs

  • Q&A: 12 hrs

  • exam training – 2 hrs

  • mid term test: 3 hrs

  • final exam: 3 hrs

  • self study: 92 hrs

Assessment method

  • Mid-term exam (reading list first 3 weeks of the course), Multiple Choice Questions: 25%

  • Final exam (full reading list), three parts: Multiple Choice, Graphs & Problems and Essay-questions: 75%

Students need to earn a grade of 5,5 or higher to successfully finish the course. A sufficient score for the final exam (5.5 or higher) is required; an insufficient score for the mid-term test can be compensated. Weights: final exam = 75% and mid-term exam = 25%.
Retakes: both for mid-term exam and final exam.
Language of the instruction of both the mid-term exam and the final exam is primarily English, however, students may opt-in to answer questions in Dutch as well.

Students will be permitted to resit an examination if they have taken the first sit and earned a mark between 3 and 5.5 or with permission of the Board of Examiners.

Resit written exam
Students that want to take part in a resit for a written exam, are required to register via uSis. Use the activity number that can be found on the ‘timetable exams’.


Yes, the Blackboard site will become available a month prior to the start of the course. Via Blackboard students are able to download lecture notes. Sheets will become available a month before each lecture. Tip: bring a hardcopy of these sheets to class. Moreover, as requested by students we will post answers to study questions on Blackboard too.

Reading list

  • Textbook: Harvey Rosen & Ted Gayer, Public Finance (international edition), McGraw-Hill, most recent edition.

  • Additional reading material will be posted on Blackboard.
    o Staff Department of Economics Leiden University, Keynesian model: Effective demand and income equilibrium, 2015.
    o Koen Caminada, How strong are Piketty’s trends, Leiden Law Blog, January 12th 2015.

  • Course material (slides) will be posted in advance on Blackboard.


Use both uSis and Blackboard to register for every course.
Register for every course and workgroup via uSis. Some courses and workgroups have a limited number of participants, so register on time (before the course starts). In uSis you can access your personal schedule and view your results. Registration in uSis is possible from four weeks before the start of the course.
Also register for every course in Blackboard. Important information about the course is posted here.


Prof. dr. Koen Caminada en Lieke Kools Msc via