71 NGU HANH SON ST, DANANG, VIETNAM

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1. Course Title: PUBLIC FINANCE

2. Course Code: BAN2001
3. Credit Number: 3
4. Level: Undergraduate
5. Prerequisite: ECO1001 – Macroeconomics
6. Course Overview:
The subject focuses on studying the role of the public sector in general and the
role of public finance in particular in creating acompetitive market and overcoming
the defects of the market; thereby allocate and use the economy resources to create
economic efficiency, while ensuring equality in society. Key contents include:
efficiency and equity, externalities, public goods and public spending, cost – benefit
analysis of the project and the impact of taxes on the economy.

7. Course Objectives:
No Objectives
OBJ1 Understand the basics of the public sector and public finance about
1 efficiency and equity, externalities, public goods, public spending, cost
– benefit analysis and the impact of taxes on the economy.
OBJ2 Have the basis knowledge to understand the allocation of resources,
2 public decisions and policy choices of the government spending.
OBJ3 Have the knowledge and techniques of cost – benefit analysis.
3
OBJ4 Know how to analyse the impact of different taxes on the economy and
4 the method of taxation in order to achieve economic efficiency.
OBJ5 Know how to apply the theoretical models and tools used by
5 government to intervene the economy.
OBJ6 Know how to debate about government policies that aim to maintain
6 efficiency and equity.

8. Learning Outcomes:
No Learning Outcomes
Understand the basics of finance in general and public finance in
1 LO1
particular.
LO2 Understand the public sector and its role in the economy
2
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

Understand the impacts of the public policy on economic efficiency and

3 LO3
social equity.
Understand the theoretical models and tools used by government to
4 LO4 intervene the economy, to allocate resources, to make public policy
decisions and government spending.
Have an ability to synthesize and codify the issues related to public
5 LO5
financein the economy.
Have an ability to analyse and evaluate public policy decisions and
6 LO6
problems in public finance.
LO7 Have skills to work independently and collaborate in group works.
7
LO8 Have skills to discuss and deliver public presentation.
8
Have an interest inthe subject, especially interested in studying and
9 LO9
analysing economic, political and social events.
Being conscious in evaluating policies of the Viet Nam governmentthat
10 LO10 aim to develop a market economy towards economic efficiency and
social equity.

Relationship between learning outcomes (LO) and course contents

LO 10
LO 3

LO 4

LO 5

LO 6

LO 7

LO 8

LO 9
LO1

LO2

Chapter

1 X X X X
2 X X X X X X
3 X X X X X X
4 X X X X X X
5 X X X X X X
6 X X X X X X X
Extracurricular X X X X X X

9. Time Allocation: (1 credit = 15 periods)

Chapter Chapter Title Number of periods

 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

Practical
Lecture work/ Total
Discussion(*)

1 Public sector and public finance 04 02

Efficiency and equity in allocation of 03

2 06
resources

3 Externalities 06 03

4 Public goods and public spending 06 03

5 Public investment cost – benefit analysis 04 02

6 Frameworks for analysing taxations. 04 02

Extracurricular:

- Contents: listening to reports about

methods of organising, working and using
budget funds of some public sector
agencies and institutions, reports about
expenditures for particular public goods
and services…

- Form: invite some speakers to give

reports at campus or do some field studies
at a public agency or a public institution.

Total 30 15 45

Note: Actual number of hours for practical work/ discussion equals to the
designed one.

10. Requirements to Students:

- Attend to lectures.
- Prepare homework and discussion questions.
- Present and discuss in lectures.
11. Learning Materials:
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

11.1. Required Textbooks:

TEXT1. Public finance theory, Su Dinh Thanh, Ho Chi Minh National

University Press (2009).
TEXT2. Public finance and tax analysis, Su Dinh Thanh, Labour – Society
Press (2009).
TEXT3. Public finance, Nguyen Thi Canh, Ho Chi Minh National University
Press (2003).
TEXT 4. Public Finance and Public policy, Jonathan Gruber, Worth Publishers,
th
4 edition (2013).
11.2. Other Readings and Materials:

MTR1. Public economics, Joseph E. Stiglitz, Science Technology Press (1995).

MTR2. Public finance management, Finance Academy, Finance Press (2005).
MTR3. State financial management, Ha Noi University of Finance -
Accounting, Finance Press (2000).
MTR4. Public Finance, Laurence Seidman, McGraw-Hill (2009).

12. Grading Scale:

A = 8.5 to 10 B = 7.0 to 8.4

C = 5.5 to 6.9 D = 4.0 to 5.4 F = below 4.0

13. Teaching Methods:

Teaching methods used in this course include lectures, seminars and group
presentations.

14. Course Content:

CHAPTER 1
PUBLIC SECTOR AND PUBLIC FINANCE

1.1. Public sector

1.1.1 Concepts of public sector
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
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1.1.2 Public sector and its basic economic problems

1.1.3 Public sector and the role of government
1.2. Concept and characteristics of public finance
1.2.1 Concepts of public finance
1.2.2 Characteristics of public finance
1.3. The evolution of public finance
1.3.1 Classic public finance
1.3.2 Modern public finance
1.4 The nature and functions of public finance
1.4.1 The nature of public finance
1.4.2 The functions of public finance
Reading Materials
TL1. Chapter 01, Public finance theory, Su DinhThanh, Ho Chi Minh National
University Press (2009)
TL2. Chapter 1, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

CHAPTER 2
EFFICIENCY AND EQUITY IN ALLOCATION OF
RESOURCES

2.1. Positive economics and normative economics

2.1.1 Positive economics
2.1.2 Normative economics
2.2. Pareto efficiency
2.2.1 Maximizing utility subject to budget constraint
2.2.2 Pareto efficiency
2.3 Theorems of welfare economics
2.3.1 First theorem
2.3.2 Second theorem
2.3.3 Market failures in allocation of resources
2.4 The relationship between efficiency and equity
2.4.1 Equity concept
2.4.2 The trade-off between efficiency and equity
Reading materials
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

TL1. Chapter 02, Public finance theory, Su DinhThanh, Ho Chi Minh

National University Press (2009)
TL2. Chapter 2, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

CHAPTER 3
EXTERNALITIES

3.1. Definition and natures of externalities

3.2. Types of externality
3.3. Private sector’s solution for externalities
3.3.1 Coase theorem
3.3.2 Limitations of Coase’s solution
3.4 Public sector’s solutions for externalities
3.4.1 Taxation
3.4.2 Subsidy
3.4.3 Quantity adjustment
3.5 Differences between pricing approach and quantity adjusting
approach in addressing externalities
3.5.1 Taxation and quantity adjustment
3.5.2 Differences in cost of emission mitigation
3.5.3 Uncertain cost of emission mitigation
Reading materials
TL1. Chapter 05, Public finance, Nguyen Thi Canh, Ho Chi Minh National
University Press (2003)
TL2. Chapter 5, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

CHAPTER 4
PUBLIC GOODS AND PUBLIC SPENDINGS

4.1. Public goods

4.1.1 Definition of public good
4.1.2 Types of public good
4.1.3 Optimal supply of public good
4.2 Concept and role of public spending
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

4.2.1 Concept of public spending

4.2.2 Types of public spending
4.2.3 Key factors that lead to the increase in public spending
4.2.4 Roles of public spending
4.3 Public spending evaluation
4.3.1 Purpose of public spending evaluation
4.3.2 Contents of public spending evaluation
Reading materials
TL1. Chapter 03, Public finance theory, Su DinhThanh, Ho Chi Minh
National University Press (2009)
TL2. Chapter 7, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

CHAPTER 5
PUBLIC INVESTMENT COST – BENEFIT ANALYSIS

5.1. Concept of cost – benefit analysis method

5.2. Basic issues in public investment cost – benefit analysis
5.2.1 Determine current value and future value of a project
5.2.2 Net present value and internal rate of return
5.2.3 Benefit and cost ratio of an investment
5.3 Public investment cost – benefit analysis
5.3.1 Discount rate of public sector
5.3.2 Measure the benefit and cost of public projects
Reading materials
TL1. Chapter 04,Public finance theory, Su DinhThanh, Ho Chi Minh
National University Press (2009)
TL2. Chapter 8, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

CHAPTER 6
FRAMEWORKS FOR ANALYSING TAXATIONS

6.1. Taxes and income redistributions

6.1.1 Model of partial equilibrium
6.1.2 Model of general equilibrium
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

6.2 Taxes and economic efficiency

6.2.1 Concept of tax burden
6.2.2 Measure tax burdens
6.2.3 Burden of income tax
6.3 Analyse optimal tax
6.3.1 Optimal good and service tax
6.3.2 Optimal income tax
Reading materials
TL1. Chapter 05,06,07, Public finance theory, Su DinhThanh, Ho Chi Minh
National University Press (2009)
TL2. Chapter 13,Public finance, Nguyen Thi Canh, Ho Chi Minh National
University Press (2003)
TL2. Chapter 19, Public Finance and Public policy, Jonathan Gruber, Worth
Publishers, Forth Edition (2013)

15. Assessment:

Relationship between learning outcomes (LO) and assessment methods:

LO10
LO1

LO2

LO3

LO4

LO5

LO6

LO7

LO8

LO9
Assessment Method

Attendance and X X
postive learning
attitude
Group work X X X X X X X X
Final examination X X X X

Students are assessed based on the results of 3 assessment components:

TT Assessment Description of Assessment Weight

Component
- Individual contribution in lectures;
- Problem set;
1 Component 1 - Discussion in lectures; 20%
- Test;
- Attendance.
 71 NGU HANH SON ST, DANANG, VIETNAM
phongdaotao@due.edu.vn
+84-511-3950227
http://due.udn.vn

- Group work: contents and effective group

2 Component 2 work; Presentation skills;Discussion and 20%
posting questions.
According to the University examination
period:
3 Component 3 - Examination method: multiple choice 60%
examination
- Writing time: 90 minutes
Total 100%