90-774 Public Expenditure Analysis
12 units, Carnegie Mellon University
Public Expenditure Analysis is a 12 unit course designed to deal with the expenditure side of the public sector budget in a series of modules. It has been conceptualized as a blending of private finance and public expenditure principles. The former provides a systematic framework, capital budgeting, for the evaluation of privatesector capital projects, while the latter builds on the former, and introduces issues of externality, the social rate of discount, and incomplete markets through the mechanism of shadow pricing. Public Expenditure Analysis prepares those Heinz and other CMU students seeking careers in the public sector, or those parts of the private sector that routinely deal with the public sectors capital budgeting decisions. It answers the question when should a community build a bridge Public Expenditure Analysis is divided into 4 modules. In Module 1, the course develops the essential techniques of private sector evaluation principles for shortterm and longterm capital projects. In Module 2, special problems which arise in the evaluation of public sector capital projects are discussed a variety of evaluation techniques and applications especially suited to public sector projects are then examined. In Module 3, actual costbenefit studies in the policy areas of education, environment, health, criminal justice, transportation and recreation are examined. In Module 4, evaluation at a high level of aggregation is dealt with through the use of generational accounting models. These models are examples of aggregate long and shortterm public evaluation problem areas typically dealt with by national governments. Also in Module 4 groups of students perform and report a critical review of a costbenefit study they have chosen. Throughout the course, similarities and differences between the public sector and private sector are emphasized, and examples from the real world are discussed in class.
Prerequisites: none listed
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