Since the U.S. has a federal system of government, it is also important to analyze the economic geography of different levels of governance and their interaction, especially the appropriate degree of decentralization or devolution. The nature and significance of the Great Capitalist Restoration and its implications for the public sector is investigated initially by a survey of contending theories of the state's role in the economy. This is followed by tracing the evolution of the welfare state and the emerging critique of its policies that led to the adoption of the neoliberal reform agenda. From this historical perspective, it is then possible to examine in depth the scope and nature of the public sector reforms that have occurred and are on-going. With government spending accounting for a steadily increasing share of national output over the course of the twentieth century, it is vital to understand the rationale for such public sector expenditures, especially in light of the neoliberal reforms of recent years.
Taxation has substantial implications for economic efficiency, equity, and stabilization.
Evaluation of income, wealth, and consumption taxes therefore requires the development of economic models that can provide conclusions on the effectiveness of tax policies in carrying out these functions. The tax reform measures of the neoliberal agenda are also assessed. To introduce course participants to the fundamentals of economic analysis of the public sector, particularly the allocation, distributional, stabilization, and growth functions of the state. To explore contending theories of the state and its appropriate role in the economic process. To evaluate tax and expenditure policies using the tools of economic analysis.