Public Economics

Public economics studies government decisions about public policies. An important consideration is that effects on efficiency and social justice often conflict, with one attainable only at the expense of the other. Policies become politicized when a choice is made. Public economics is also sometimes called public finance and involves political economy or public choice in the interface between economics and politics. Public economics has ‘normative’ aspects in proposals for the policies that should be chosen and ‘positive’ aspects in the policies predicted to be chosen given political considerations that influence policy makers. Topics covered include taxation, public goods, externalities such as the environment, personal decisions that result in self-harm and involve behavioral economics, informational impediments to policy choice, conceptions of fairness as revealed in behavior in experiments, and outcomes of voting and political decisions.