Public Sector Economics

The public sector does not operate in isolation from the private sector and the wider economy; quite the opposite.

The delivery of essential services is based on assumptions about the workings of the economy, while the public sector has ultimate responsibility for ensuring citizens are protected from the negative consequences of market activity. It is therefore important that public managers and leaders understand these relationships and the potential effect on their organisations.

This module will provide you with a solid understanding of how different organisations operate within the neo-liberal market to organise economic activity. It will equip you with knowledge of how and why economic markets fail, and the remit of government organisations to intervene in these instances. The module will draw on examples from across the UK to explore the potential risks of government intervention, and how these may differ depending on the level of government (local, national) involved and the type of intervention (regulatory or fiscal, for example).

The module will be delivered on campus at the University of Birmingham. You will be provided with prior reading and exercises that will inform your face to face learning, which will include problem-led and scenario-based exercises.

By the end of the module you should be able to:

  • Understand how the market works to provide spontaneous organisation of economic activity.
  • Understand the fundamental role of government in providing law and order, enforcement of contracts and national defence.
  • Understand the range of market failure and government failure arguments that arise in considerations of the role of the public sector.
  • Understand the main forms of market failure, including those caused by externalities and public goods, and their implications for public sector intervention.
  • Understand the key features of a taxation system and budgeting in the public sector.
  • Understand the implications of economics in analysing the operation of the public sector.