everything.study
11.487

Budgeting and Finance for the Public Sector

3-0-9 units · Graduate

Examines globally relevant challenges of adequately and effectively attending to public sector responsibilities for basic services with limited resources. Particular attention to the contexts of fiscal crises and rapid population growth, as well as shrinkage, through an introduction to methods and processes of budgeting, accounting, and financial mobilization. Case studies and practice exercises explore revenue strategies, demonstrate fiscal analytical competencies, and familiarize students with pioneering examples of promising budget and accounting processes and innovative funding mobilization via taxation, capital markets, and other mechanisms (e.g., land-value capture). Students taking graduate version explore the subject in greater depth.

Fall 2004 · Urban Public Finance in Developing Countries

Topics

  • Introduction to Course
  • Justifications for Public Finance: Public Goods and Externalities
  • Ethical Frameworks
  • Justifications for Public Finance: Economic Development
  • The Fiscal Gap: Fiscal Health and Analysis
  • Public Finance Theory: Efficiency - Optimal Taxation, Optimal User Fees
  • Efficiency (cont.)
  • Public Finance Theory: Equity, Incidence in the General Equilibrium Model
  • Incidence (cont.)
  • Property Taxation in Developing Countries
  • Property Tax (cont.)
  • Tax Reform
  • User Fees in Developing Countries
  • Intergovernmental Transfers
  • Fiscal Federalism, Decentralization
  • Fiscal Federalism, Decentralization (cont.)
  • Source of Finance: Private Sector Participation
  • Private Sector (cont.)
  • Case Study of Private Sector Participation
  • Source of Finance: International Lending Agencies: Programming Assistance, Conditionalities, Debt, Inflation, Structural Adjustment
  • International Lending (cont.)
  • MicroFinance History and Design
  • MicroFinance Case

Readings

  • ses #: 1 · Topics: Introduction to Course · READINGS: Rosen, Harvey. Public Finance . Boston, MA: McGraw-Hill, 2002, chapters 4 and 5. ISBN: 0072374055.
    Reading assignment
  • ses #: 2 · Topics: Justifications for Public Finance: Public Goods and Externalities · READINGS: Coase, Ronald. “The Problem of Social Cost.” Journal of Law and Economics 3 (1960): 1-44.
    Reading assignment
  • Harper, Thomas L., and Stanley M. Stein. “The Centrality of normative ethical theory to contemporary planning theory.” Journal of Planning Education and Research 11 (1992): 105-116.
    Listed reading
  • Stollman, Israel. “The Values of the Planner.” In The Practice of Local Government Planning . Edited by Frank S. So and Judith Getzels. New York, NY: International City Management Association, 1988, pp. 503-516. ISBN: 0873260775.
    Listed reading
  • Aschauer, David Alan. “Is public expenditure productive?” Journal of Monetary Economics 23, no. 2 (March 1989): 177-200.
    Listed reading
  • Davis, Jennifer, Alice Kang, Jeffrey Vincent, and Dale Whittington. “How Important is Improved Water Infrastructure to Microenterprises? Evidence from Uganda.” World Development 29, no. 10: 1753-1767.
    Listed reading
  • Black, J. Thomas, and Rita Curtis. “The Local Fiscal Effects of Growth and Commercial Development over Time.” Urban Land (January, 1993): 18-21.
    Listed reading
  • Recommended Readings
    Listed reading
  • Holtz-Eakin, Douglas. “Public-Sector Capital and the Productivity Puzzle.” Review of Economics and Statistics 76, no. 1 (1994): 12-21.
    Listed reading
  • Lewis, Blaine D. “The Impact of Public Infrastructure on Municipal Economic Development: Empirical Results from Kenya.” Review of Urban and Regional Development Studies 10, no. 2 (1998): 142-156.
    Listed reading
  • Blejer, Mario I., and Adrienne Cheasty. “The Measurement of Fiscal Deficits: Analytical and Methodological Issues.” Journal of Economic Literature 29, no. 4 (December 1991): 1644-1678.
    Listed reading
  • Government Finance Statistics Manual 2001 . Washington, DC: International Monetary Fund, 2001, chapters 1, 3, 8, and 9. ISBN: 158906061X.
    Listed reading
  • Bahl, Roy, and Johannes Linn. Urban Public Finance in Developing Countries . New York, NY: Oxford University Press, 1992, chapters 2 and 3. ISBN: 0195208056.
    Listed reading
  • Nwagwu, Emeka O. C. “Budgeting for Development: the case of Nigeria.” Public Budgeting and Finance 12, no. 1 (1992): 73-82.
    Listed reading
  • Alesina, Alberto, and Roberto Perotti. “Fiscal Discipline and the Budget Process.” American Economic Review 86, no. 2 (1996): 401-407.
    Listed reading
  • Stasavage, David, and Dambisa Moyo. “Are cash budgets a cure for excess fiscal deficits (and at what cost)?” World Development 28, no. 12 (2000): 2105-2122.
    Listed reading
  • Alesina, Alberto, et. al. “Budget institutions and fiscal performance in Latin America.” Journal of Development Economics 59 (1999): 253-273.
    Listed reading
  • Burchell, Robert. “Fiscal Impact Analysis.” In Development Impact Assessment Handbook . Edited by R. Buchell, et. al. Washington, DC: Urban Land Institute 1994, chapter 8. ISBN: 0874207436.
    Listed reading
  • ses #: 7 · Topics: Public Finance Theory: Efficiency - Optimal Taxation, Optimal User Fees · READINGS: Rosen, Harvey. Public Finance . Boston, MA: McGraw-Hill, 2002, chapter 13. ISBN: 0072374055.
    Reading assignment
  • ses #: 8 · Topics: Efficiency (cont.) · READINGS: Rosen, Harvey. Public Finance . Boston, MA: McGraw-Hill, 2002, chapter 14. ISBN: 0072374055.
    Reading assignment
  • ses #: 9 · Topics: Public Finance Theory: Equity, Incidence in the General Equilibrium Model · READINGS: Rosen, Harvey. Public Finance . Boston, MA: McGraw-Hill, 2002, chapter 12. ISBN: 0072374055.
    Reading assignment
  • Devarajan, Shantayanan, and Shaikh I. Hossain. “The Combined Incidence of Taxes and Public Expenditure in the Philippines.” World Development 26, no. 6 (1998): 963-977.
    Listed reading
  • Yinger, John. “The incidence of development impact fees and special assessments.” National Tax Journal 51, no. 1 (1998): 23-41.
    Listed reading
  • ses #: 11 · Topics: Property Taxation in Developing Countries · READINGS: Bahl, Roy, and Johannes Linn. Urban Public Finance in Developing Countries . New York, NY: Oxford University Press, 1992, chapters 4 and 5. ISBN: 0195208056.
    Reading assignment
  • Kelly, Roy. “Designing a Property Tax Reform Strategy for Sub-Saharan Africa: an Analytical Framework Applied to Kenya.” Public Budgeting and Finance (Winter 2000): 36-51.
    Listed reading
  • ———. “Property Taxation in Indonesia: Challenges from Decentralization.” Lincoln Institute of Land Policy Working Paper, WP03RK1, 2003. ( PDF ) ↗
    Listed reading
  • Goode, Richard. “Tax Advice to Developing Countries: an historical review.” World Development 21, no. 1 (1993): 37-53.
    Listed reading
  • Fjeldstad, Odd-Helge, and Joseph Semboja. “Why People Pay Taxes: the Case of the Development Levy in Tanzania.” World Development 29, no. 12 (2001): 2059-2074.
    Listed reading
  • ses #: 15 · Topics: User Fees in Developing Countries · READINGS: Bahl, Roy, and Johannes Linn. Urban Public Finance in Developing Countries . New York, NY: Oxford University Press, 1992, chapter 9. ISBN: 0195208056.
    Reading assignment
  • Bahl, Roy, and Johannes Linn. Urban Public Finance in Developing Countries . New York, NY: Oxford University Press, 1992, chapter 13. ISBN: 0195208056.
    Listed reading
  • Bird, Richard, and Michael Smart. “Intergovernmental Fiscal Transfers: International Lessons for Developing Countries.” World Development 30, no. 6 (2002): 899-912.
    Listed reading
  • Quigley, John M., and Daniel L. Rubinfeld. “Budget Reform and the Theory of Fiscal Federalism.” American Economic Review 76, no. 2 (1986): 132-137.
    Listed reading
  • Tiebout, Charles M. “A Pure Theory of Local Expenditures.” Journal of Political Economy 64, no. 5 (1956): 416-424.
    Listed reading
  • Oates, Wallace. E. Fiscal Federalism . New York, NY: Harcourt Brace Jovanovich, 1972, chapters 1 and 2. ISBN: 015527452X.
    Listed reading
  • Prud-homme, Remy. “Dangers of Decentralization.” World Bank Research Observer 10, no. 2 (August 1995): 201-20.
    Listed reading
  • Case: Parry, Taryn Rounds. “Achieving Balance in Decentralization: a Case Study of Education Decentralization in Chile.” World Development 25, no. 2 (1997): 211-225.
    Listed reading
  • Kwon, Osung. “The Effects of Fiscal Decentralization on Public Spending: the Korean Case.” Public Budgeting and Finance (Winter 2003): 1-20.
    Listed reading
  • Davoodi, Hamid, and Heng-fu Zou. “Fiscal Decentralization and Economic Growth: a Cross-Country Study.” Journal of Urban Economics 43, no. 2 (1998): 244-257.
    Listed reading
  • Rondinelli, Dennis A., and John D. Kasarda. “Privatization of Urban Services and Infrastructure in Developing Countries: an Assessment of Experience.” Chapter 7 in Third World Cities: Problems, Policies, and Prospects . Newbury Park, CA: Sage Publications, 1993. ISBN: 0803944853.
    Listed reading
  • Gomez-Ibanez, Jose A., and John R. Meyer. Going Private: the International Experience with Transport Privatization . Washington, DC: The Brookings Institution, 1993. ISBN: 0815731787.
    Listed reading
  • Mitchell-Weaver, Clyde, and Brenda Manning. “Public-Private Partnerships in Third World Development: a Conceptual Overview.” Studies in Comparative International Development 26, no. 4 (Winter 1991-1992): 45-67.
    Listed reading
  • Estache, Antonio, Andres Gomez-Lobo, and Danny Leipziger. “Utilities Privatization and the Poor: Lessons and Evidence from Latin America.” World Development 29, no. 7 (2001): 1179-1198.
    Listed reading
  • La Porta, Rafael, and Florencio Lopez-de-Silanes. “The Benefits of Privatization: Evidence from Mexico.” The Quarterly Journal of Economics (November, 1999): 1193-1242.
    Listed reading
  • Birdsall, Nancy, and John Nellis. “Winners and Losers: Assessing the Distributional Impact of Privatization.” World Development 31, no. 10 (2003): 1617-1633.
    Listed reading
  • ses #: 21 · Topics: Case Study of Private Sector Participation · READINGS: Walder, Jay. “The Tribasa Toll Road Trust.” Kennedy School of Government Case Program, CR 15-99-1485.0. Cambridge, MA: Kennedy School of Government, 1998.
    Reading assignment
  • Hanlon, Joseph. “How Much Debt must be Cancelled?” Journal of International Development 12 (2000): 877-901.
    Listed reading
  • Toye, John. “Fiscal Crisis and Fiscal Reform in Developing Countries.” Cambridge Journal of Economics 24 (2000): 21-44.
    Listed reading
  • ses #: 23 · Topics: International Lending (cont.) · READINGS: “World Bank Lending Instruments: Resources for Development Impact.” World Bank Booklet. Washington, DC: World Bank, 2001.
    Reading assignment
  • Morduch, Jonathan. “The Microfinance Schism.” World Development 28, no. 4 (2000): 617-629.
    Listed reading
  • Tsai, Kellee S. “Imperfect Substitutes: the local political economy of informal finance and microfinance in rural China and India.” World Development 32, no. 9 (2004): 1487-1507.
    Listed reading
  • ses #: 25 · Topics: MicroFinance Case · READINGS: Stuart, Guy. “A Commercial Bank does Microfinance: Sogesol in Haiti.” Kennedy School of Government Case Program, CR 16-02-1657, 2002. Cambridge, MA: Kennedy School of Government, 2002.
    Reading assignment

Prerequisites & course information

Subject meets with 11.147 Prereq: None G (Spring) Not offered regularly; consult department 3-0-9 units

Sources