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EC270: Public Finance


Course Content

This course provides a broad, up-to-date introduction to the economic analysis of public policy issues. The focus of the course, which draws on microeconomic theory, is on the development of analytical tools and their application to key policy issues relating to the spending, taxing and financing activities of government. Particular emphasis is given to recent developments in public economics, including findings from current research, in areas such as behavioural public economics, new empirical methods and policy innovations.

The course aims:

  • To give students an appreciation of the analytical methods in economics for the study of the public sector and the role of the state in principle and in practice.
  • To provide a thorough grounding in the principles underlying the role of the state, the design of social insurance and the welfare state and the design of the tax system.
  • To enable students to understand the practical problems involved in implementing these principles.

The course is divided in to three parts:

Part 1. An overview of the role of Government.

Part 2. Examining the issues relating to welfare analysis, social insurance and pensions.

Part 3. Assessing the tax policy and its impact on individuals and companies, while the final part explores the issues of privatisation, outsourcing and the proper scope of government.

Topics covered include:

  • Equity, efficiency and the role of the state
  • Behavioural public economics
  • Market failure and social insurance
  • The pensions "crisis" and savings policy
  • Reforming welfare systems
  • The impact of tax incentives and welfare-to-work schemes on unemployment
  • Tax incentives and investment, including cross-border investment
  • Optimal taxation and tax evasion
  • Globalisation and tax policy
  • Climate change policy: taxes versus emissions trading
  • Rethinking the scope of government

Course Outcomes

By the end of the course the students should be able to:

  • Discuss critically key issues in public economics, informed by recent research.
  • Present a coherent argument orally and in writing on topics in public economics.
  • Demonstrate a familiarity with a range of policy issues and relevant analytical and empirical tools.

World-class LSE teaching              

The LSE Department of Economics is one of the biggest and best in the world, with expertise across the full spectrum of mainstream economics. A long-standing commitment to remaining at the cutting edge of developments in the field has ensured the lasting impact of its work on the discipline as a whole.

It is a leading research department, consistently ranked in the top 20 economics departments worldwide. This is reflected in the 2014 Research Assessment exercise which recognised the Department's outstanding contribution to the field

On this three week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s economics faculty.



This course is not based on a single text. Students are, however, encouraged to purchase Jonathan Gruber (2011) Public Finance and Public Policy, 3rdedition, Worth Publishers, which is used throughout the course, and perhaps also Nicholas Barr (2012) The Economics of the Welfare State, (5th ed.), Oxford University Press, to which frequent reference is made in parts 1 and 2. Copies of Gruber and Barr are available in the Library Course Collection. The course readings also include journal articles and working papers, almost all of which can be accessed electronically. A course pack of key articles is provided.

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice



Session: Two

Dates:  11 - 29 July 2016

Dr Camille Landais

Level: 200 level

Fees: Click here for information

Prerequisites: Introductory microeconomics

Lectures: 36 hours 

Classes: 18 hours

Assessment*: Two written examinations plus written work

Typical credit**: 3 credits (US) 7.5 ECTS points (EU)

How to apply?

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*assessment is optional – see FAQs

**You will need to check with your home institution. Read more about credit transfer here.