Economics of the Public Sector PDF
Preview Economics of the Public Sector
ECONOMICS OF THE PUBLIC SECTOR FOURTH EDITION FOURTH EDITION ECONOMICS OF THE PUBLIC SECTOR JOSEPH E. STIGLITZ | JAY K. ROSENGARD n W. W. NORTON & COMPANY, INC. NEW YORK • LONDON W. W. Norton & Company has been independent since its founding in 1923, when William Warder Norton and Mary D. Herter Norton first published lectures delivered at the People’s Institute, the adult education division of New York City’s Cooper Union. The firm soon expanded its program beyond the Institute, publishing books by celebrated academics from America and abroad. By midcentury, the two major pillars of Norton’s publishing program—trade books and college texts— were firmly established. In the 1950s, the Norton family transferred control of the company to its employees, and today—with a staff of four hundred and a comparable number of trade, college, and professional titles published each year—W. W. Norton & Company stands as the largest and oldest publishing house owned wholly by its employees. Copyright © 2015 by W. W. Norton Company, Inc. Copyright © 2000, 1988, 1986 by Joseph E. Stiglitz, the Trustee of Edward Hannaway Stiglitz Trust, the Trustee of Julia Hannaway Stiglitz Trust, and the Trustee of the Trust for the Benefit of Joseph E. Stiglitz’s Children All rights reserved Printed in the United States of America Editor: Jack Repcheck Editorial Assistant: Theresia Kowara Project Editor: Sujin Hong Managing Editor, College Digital Media: Kim Yi Production Manager: Vanessa Nuttry Marketing Manager, Economics: Janise Turso Design Director: Jillian Burr Permissions Manager: Megan Jackson Composition: Cenveo® Publisher Services Manufacturing: Quad/Graphics—Taunton Library of Congress Cataloging-in-Publication Data. Stiglitz, Joseph E. Economics of the public sector / Joseph E. Stiglitz, Jay K. Rosengard.—Fourth edition. pages cm Includes bibliographical references and index. ISBN 978-0-393-92522-7 (pbk.) 1. Finance, Public—United States. 2. Fiscal policy—United States. I. Rosengard, Jay K. II. Title. HJ257.2.S84 2015 336.73—dc23 2014048383 W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110-0017 ww norton.com W. W. Norton & Company Ltd., Castle House, 75/76 Wells Street, London W1T 3QT 1 2 3 4 5 6 7 8 9 0 To our first teachers, Nat and Charlotte Jordan and Betty BRIEF CONTENTS Preface xxvii PART 1 ROLE AND SIZE OF THE PUBLIC SECTOR 1 1 D EFINING PUBLIC SECTOR RESPONSIBILITIES 3 2 MEASURING PUBLIC SECTOR SIZE 26 PART 2 FUNDAMENTALS OF WELFARE ECONOMICS 59 3 MARKET EFFICIENCY 61 4 MARKET FAILURE 81 5 P UBLIC GOODS AND PUBLICLY PROVIDED PRIVATE GOODS 101 6 EXTERNALITIES AND THE ENVIRONMENT 129 7 EFFICIENCY AND EQUITY 163 PART 3 PUBLIC EXPENDITURE THEORY 197 8 P UBLIC PRODUCTION OF GOODS AND SERVICES 199 9 PUBLIC CHOICE 230 vii viii BRIEF CONTENTS PART 4 P UBLIC EXPENDITURE IN PRACTICE 267 10 FRAMEWORK FOR ANALYSIS OF EXPENDITURE POLICY 269 11 EVALUATING PUBLIC EXPENDITURE 296 12 DEFENSE, RESEARCH, AND TECHNOLOGY 329 13 HEALTH CARE 357 14 EDUCATION 394 15 WELFARE PROGRAMS AND THE REDISTRIBUTION OF INCOME 428 16 SOCIAL INSURANCE 470 PART 5 T AXATION IN THEORY 503 17 INTRODUCTION TO TAXATION 505 18 TAX INCIDENCE 538 19 TAXATION AND ECONOMIC EFFICIENCY 574 20 OPTIMAL TAXATION 606 21 TAXATION OF CAPITAL 636 PART 6 T AXATION IN PRACTICE 665 22 THE PERSONAL INCOME TAX 667 23 THE CORPORATION INCOME TAX 709 24 A STUDENT’S GUIDE TO TAX AVOIDANCE 746 25 REFORM OF THE TAX SYSTEM 762 PART 7 F URTHER ISSUES 799 26 INTER GOVERNMENTAL FISCAL RELATIONS 801 27 SUBNATIONAL TAXES AND EXPENDITURES 832 28 F ISCAL DEFICITS AND GOVERNMENT DEBT 851 References 880 Index 893 CONTENTS Preface xxvii PART 1 ROLE AND SIZE OF THE PUBLIC SECTOR 1 1 DEFINING PUBLIC SECTOR RESPONSIBILITIES 3 The Economic Role of Government 4 The Mixed Economy of the United States 4 Different Perspectives on the Role of Government 6 An Impetus for Government Action: Market Failures 7 Achieving Balance between the Public and Private Sectors 10 The Emerging Consensus 11 Thinking Like a Public Sector Economist 13 Analyzing the Public Sector 15 Economic Models 17 Case Study Musgrave’s Three Branches 18 Normative versus Positive Economics 19 Disagreements among Economists 21 Differences in Views on How the Economy Behaves 21 Disagreement over Values 23 Case Study Public Sector Economics and the Global Economic Crisis 23 Review and Practice 24 Summary 24 Key Concepts 24 Questions and Problems 25 ix
The list of books you might like
