INTRODUCTION TO COURSE:

This course investigates the role of the public sector in the economic arena. We will attempt to explain why government intervention is needed, how it influences the behavior of the private sector and what the welfare effects of such influences are. We will also survey political economy, which regards actions of the public sector as determined by political processes.

Course pre requisites (if any):

No

Learning outcomes:

On the successful completion of the course students will be able to:

    Demonstrate a good understanding of the fiscal framework for taxing and spending and of fiscal policy principles
•    Analyse critically tax reforms and policy choices in developed and developing countries  
•    Research, and examine key issues and challenges in fiscal policy in a particular development or country context.
•    Present in depth written analysis of key issues and challenges in fiscal policy in a particular development or country context.

Contents

1. Scope and New Developments

1. Definitions: Economic Development and Growth, Identification of Development variables. Scope and Significance of Development Economics.

1. Major Theories of Development
2. Agriculture and Industry

1. Agriculture vs. Industry: Development Debate,Lewis’ Model of surplus Labor. Rains’ Fei Model and its critical review.
2. Transforming Agriculture, Underemployment problem. Role of Agriculture: Market for Industrial Output, Provision of Input, food, Complementarities, productivity growth.

1. Terms of Trade Issue and Subsidies

1. Land Holdings, Green Revolution and it’s Performance.
2. Problem of Sectoral Dualism. Why Green Revolution? The Spread of Green Revolution in Pakistan and its Status / Contributions.

1. Population, Education and Human Capital

1. Demographic Transition, Human Resources as a source of growth and their contributions.
2. Investment in education and returns. Models of Employment & Unemployment: Time Criterion,Productivity Criterion and New Index etc., and Employment generation Strategies/Techniques.

1. International Debt, Aid / Assistance

1. Why international borrowing? Two Gap Model, Aid commitments and disbursement.
2. Sources of borrowing. Debt Cycle Theory/Stages, Debt Burden: Debt Servicing etc.
3. Policies to combat debt problem: Forecasting debt and solution for debt burden

1. WTO, Liberalization and International Trade

1. Trade vs. Aid. Liberalization of Trade and its impacts/gains etc., Foreign Exchange Constraints and Balance of Payment deficit.
2. Role of GATT and its Failure. WTO and LDC’s. Trade Instability, Distribution of gains from Trade liberalization.
3. Regional Trade Associations (RTA’s): their role and contributions.

1. Poverty and Income Distribution

1. Definitions and Measurement of Poverty/Poverty Line.

1. Economic Growth and Environment

1. Market Based Approach and Externalities. Deforestation and Renewable Resources, Measuring environment values.
2. Urbanization and environmental issues. Sustained development, Ecology and economic progress.

Recommended Books

1. David N Hyman, (1996), Public Finance, A Contemporary Application of—. Harcount Brace College Publishers.
2. Meier Gerald M., Leading Issues in Economic Development, (Latest Issue),Oxford University Press.
3. A. Hamid Shahid, Monetry and Public Finance

Suggested Books

1. GhatakSubarta, (2003), Introduction to Development Economics, Routledge, Taylor and Francis Group, London/New York.
2. Rosen and Harvey S., (1999), Public Finance, Mc-Craw Hill.