The events of the last decade have challenged the contemporary neo-classical synthesis in all branches of economics, but particularly public finance. The most notable feature of the 2nd edition of Public Finance in Theory and Practice is the infusion of behavioral economics throughout the text, with an end of chapter question inviting the student to apply a behavioral lens to some question or issue. There continues to be an emphasis on the importance of the institutional context, drawing on examples from many countries and emphasizing the role of lower level governments in a federal system. The first five chapters establish this context by reviewing the role of government in a market system, the description of government structure from an economic perspective, the basic data about revenue and expenditures, the elements of public choice, and the distributional role of government.
The book has been substantially reorganized to put more emphasis on public expenditure. Expanded treatment of public goods includes common property resources and congestible or club goods. Expanded discussion of budgeting and cost-benefit analysis provides some practical application of the theory. Updated discussions of social security, public education and health care address these three major contemporary public finance issues. The traditional emphasis on revenue (taxes, fees and grants) has been retained but follows rather than precedes the discussion of expenditures.
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Holley Hewitt Ulbrich is Alumni Professor of Economics Emerita at Clemson
University. She is a senior fellow at both the Strom Thurmond Institute and the Center for Governance at the University of South Carolina. She holds BA, MA and PhD degrees in economics from the University of Connecticut and served on the Clemson faculty from 1967 to 1997. The author of five books and well-known as a consultant to state and local government agencies, including the General Assembly, she has had a considerable amount of experience in taxation at the local, state, national, and even international level, having taught short courses in taxation and public finance at the World Bank for five years. Dr. Ulbrich worked as a policy analyst for the U.S. Advisory Commission on Intergovernmental Relations during a sabbatical in 1984-85 where she wrote a widely cited analysis of the taxation of interstate mail order sales. She is also the author of two USACIR monographs on local taxes, one on local sales taxes and one on local income taxes. Dr. Ulbrich and a number of colleagues were asked to develop recommendations for alternative local revenue sources in South Carolina in the late 1970s that ultimately resulted in the legislation for the accommodations tax in 1984 and the local option sales tax in 1990. In 1991 she was the principal author of a comprehensive study of the South Carolina tax system for the South Carolina ACIR. In 1997, she and three colleagues completed a widely discussed research report that analyzed projected state revenues and expenditures for South Carolina through 2010. She is one of the principal authors of the recent report to the Local Government Funding Steering Committee to improve funding for cities, counties and school districts in SC. She is also currently completing a new textbook in Public Finance for International Thomson Publishers, which is due out in March 2002.
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