Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics > Public Sector Finance & Economics > Flashcards

Public Sector Finance & Economics Flashcards

1
Q

What are the reasons for government intervention?

A
  • market-pareto efficient
  • market failures
  • property rights
  • enforcement of contracts
  • merit goods
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the four roles of Government

A
  • allocative
  • redistributive
  • stabilisation
  • regulatory
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Explain the allocative role of government

A
  • provision of goods and services that would not otherwise be provided by the market system
  • problem: how much of the good to supply and what should the consumer pay?
  • mention public goods, externalities, and monopolies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Explain the redistributive role of government

A
  • the correction of the skewed distribution of income and wealth in an economy
  • problem: difficult to measure utility from income
  • efficiency cost?
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Explain the stabilisation role of government.

A
  • the successful attainment of macro-economic growth rate, low unemployment and stability of the price level
  • modern government is held responsible by the electorate for the economy’s performance
  • achieved through fiscal policy
  • in a small, open economy it is very difficult for us to stabilise
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Explain the regulatory role of government

A
  • for the private market to work there needs to be an equitable arbitrator to define property rights and enforce contracts.
  • if there were no property rights or contract enforcement there would be no incentive to work, save or invest.
  • if government is weak, private enforcers emerge
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is pareto efficiency / optimum

A

a situation where it is no longer possible to make one person better off without making anyone else worse off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

when can pareto efficiency be achieved

A

under certain restrictive assumptions through perfectly competitive markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what is pareto improvement?

A

a situation where it is possible to make at least one person better off without making anyone else worse off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is the impact of a market failure

A

it reduces efficiency and therefore welfare in an economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a private good?

A
  • excludable

- rival in consumption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is a public good?

A
  • non excludable

- non rival in consumption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is the free rider problem

A

a person who receives the benefit of a good but avoids paying for it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

why does the free rider problem occur?

A
  • good is non excludable

- because people are not charged for their use of the public good, they have an incentive to free ride

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is a common resource?

A
  • non excludable

- rival in consumption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is the tragedy of the commons

A
  • a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole
    e. g. why medieval sheep farmers really needed the enclosures
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what are club / toll goods?

A
  • excludable

- non rival in consumption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what are mistakes that people make when thinking about public goods

A
  • they are not just any goods provided by the state

- not only provided by the state. they can be provided by the private sector or charities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what might be the impact of technology on public goods?

A

it may become cheaper to exclude customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How to ration public goods?

A
  • tolls
  • taxation
  • queuing
  • rationing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what does excludability mean?

A

the property whereby a person can be prevented from using a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what does rival in consumption mean?

A

the property whereby one person’s use diminishes other people’s use of a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the optimal provision of a public good?

A

0

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

why is 0 the optimal provision of a public good?

A
  • public goods are non excludable and non rival in consumption
  • the marginal cost of an extra person is 0
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

in terms of a public good, what is the difference between the marginal cost in production and consumption

A
  • an additional person adds to the marginal cost in production but not consumption
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

what is an externality?

A
  • the uncompensation impact of one person’s actions on the well-being of a bystander
  • an example of a market failure
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

what is the social cost of a good? (externalities)

A

private costs of the producers
+ costs of those bystanders
= social cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

what does it mean to internalise the externality?

A

altering incentives so that people take account of the external effects of their actions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

what is the definition of a positive externality?

A

an action of an individual or firm which confers benefits on others but for which the latter does not pay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

what is the definition of a negative externality?

A

an action of an individual or firm which confers costs on others but for which the latter is not paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

what is the cost to society of a positive externality?

A

larger than the cost to the consumer(s)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

what is the cost to society of a negative externality?

A

larger than the cost to the producer(s)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

where is the social cost curve of a positive externality?

A

above the demand curve (takes into account the external benefits to society)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

where is the social cost curve of a negative externality?

A

above the supply curve (takes into account the external costs imposed on society)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

what quantity of a good with a positive externality should be produced?

A

where the supply curve crosses the social-cost curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

what quantity of a good with a negative externality shodl be produced?

A

where the demand curve crosses the social-cost curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

how is a positive externality internalised?

A

subsidy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

how is a negative externality internalised?

A

taxation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

what is the relationship between externalities and property rights?

A

the market fails to allocate resources efficiently because property rights are not well established

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

what is the Coase Theorem?

A
  • the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own
  • whatever the initial distribution of rights, the interested parties can reach a bargain in which everyone is better off and the outcome is efficient
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

what is the traditional way of looking at the reciprocal nature of externalities?

A

causes and fairness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

what is the central question in terms of the reciprocal nature of externalities?

A

property rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

how does Coase look at the reciprocal nature of externalities?

A

efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

list 4 transaction costs

A
  • identifying the parties with whom one has to bargain
  • getting together with them
  • actually bargaining with them
  • observing and enforcing any bargain reached
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

what is the simple / Stigler version of the Coase Theorem?

A

if there are zero transaction costs, the efficient outcome will occur regardless of the choice of legal rule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

what is the complex version of the Coase Theorem?

A

efficient laws and social institutions are the ones that place the burden of adjustment to externalities on those who can accomplish adjustment at least cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

what are some policy solutions to the externality problem

A
  • regulation
  • taxes
  • subsidies
  • marketable permits
  • patents
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

what are the assumptions of the model of perfect competition?

A
  • market participants have perfect information
  • consumers know their preferences perfectly
  • firms know the best available technology, the productivity of each worker, and the cheapest prices of all inputs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

What is the impact of imperfect information?

A

inhibits prices and markets from performing its function of communicating important information about economic scarcity and coordinating production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

in order to make an informed and optimal decision the economic agent must have perfect information. What is that.

A

information about the

  • quality of the good
  • price of the good
  • future
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

what is the solution to imperfect information?

A
  • usually regulation

- where information failure is chronic the state may opt to produce the good or for a social insurance scheme

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

What are the consequences of asymmetric information?

A
  • adverse selection

- moral hazard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

what is adverse selection?

A

occurs when there’s a lack of symmetric information prior to a deal between a buyer and a seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Explain the principal and agent problem?

A
  • bureaucrats and politicians act as agents of the electorate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

When does the principal and agent problem lead to inefficiencies

A

when

  • there is asymmetric information between the agent and principal
  • the goals of the agent and principal differ
  • there are costs to the principal observing the actions of the agent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

what is moral hazard?

A

occurs when there is asymmetric information between two parties and change in behaviour in one party after a deal is struck

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

What are the benefits of competition over monopoly?

A
  • static benefits
  • dynamic benefits
  • equity benefits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

What are the static benefits of competition over monopoly?

A

more output at lower price (eliminates deadweight loss)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

What are the dynamic benefits of competition over monopoly?

A
  • makes forms more efficient
  • selection process - good firms grow, poor firms exit
  • stimulates innovation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

What are the equity benefits of competition over monopoly?

A
  • small firms are protection from abuse of monopoly power

- monopoly profits dkew distribution of wealth in society

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

What monopoly actions can firms take

A
  • collective anti-competitive behaviour

- single firm behaviour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

name the three areas of a natural monopoly that are regulated?

A
  • pricing
  • access
  • quality of service
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

give an important fact in terms of the regulation of professions

A

the profession should never be in the majority when it comes to regulation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

what is government failure?

A

where activities of the State fail to promote efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

what are the two main sources of government failure?

A
  • the procedures of a democratic system can lead to a pareto inefficient outcome
  • the actions of the State are usually executed by a intermediary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

What is the ethical voter model

A

voting involves some level of altruism

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

what is the median voter theorem

A

with single-peaked preferences the key to success is attracting the median voter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

What does Arrow’s impossibility theorem say?

A

cannot express the will of the people through voting system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Under Arrow’s impossibility theorem, no voting system exists that satisfies …

A
  • transitivity
  • non dictatorial choice
  • independence of irrelevant alternatives
  • unrestricted domain
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

What may the goals of the bureaucracy be?

A
  • salary
  • power
  • personal presitige
  • size of department
  • increased budget
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

what interest groups are likely to successful?

A
  • wealthy individuals or corporations
  • interest / lobby groups which
  • have small ish membership
  • supply its members with a private good
  • be reasonably homogenous so that policy conflicts are minimised
  • have low organisational costs
  • the payoff for success is large and certain
72
Q

what are the two ways of accumulating wealth?

A
  • engaging in productive activity

- using political power to take wealth off someone else

73
Q

why is rent seeking damaging to the economy

A
  • opportunity cost
  • visious circle
  • monopoly distortions
74
Q

what is corruption?

A
  • the illegal use of public power for private gain
  • the single greatest obstacle to economic and social development
  • damages the incentives structure of society
75
Q

How does corruption damage economic growth

A
  • wastes tax-payers’ money
  • distorts policy
  • undermines the rule of law
76
Q

how does corruption occur?

A
  • regulation
  • authorisation / permits
  • taxation
  • transfers / subsidies
  • financial repression
  • government spending
  • use of assets
  • Ppublic Private Partnerships
77
Q

how to reduce corruption?

A
  • appointing high quality and honest officials
  • leading by example
  • strong informal norms of honesty and accountability
  • ensure officials are paid apprioriately
  • clear and unambiguous rules, laws, and bureaucratic processes
  • appropriate and proportionate punishment for corruption
  • open and free press
  • FoI legislation
  • separation of powers
  • term limits on office
78
Q

what are the standard measures of public finance?

A

G / GDP
Tax / GDP
Borrowing / GDP
Debt / GDP

79
Q

What are the demand side theories on what pressure push public spending up?

A
  • voters’ preferences for public goods and services
  • voters’ preferences for redistribution of income
  • risk aversion
  • economic growth
  • pressure groups
  • urbanisation
80
Q

What are the supply side theories on what pressure push public spending up?

A
  • behaviour of bureaucrats
  • behaviour of politicians
  • fiscal illusion
  • structure of government
  • productivity differential (rising wage bull in the public sector)
81
Q

what are the implications of rising expenditure?

A
  • when does government become so large to the point of overriding individual liberty?
  • does government improve welfare?
  • emergence of public choice literature and recognition of government failure (government to governance shift)
82
Q

What are the sources of finance?

A
  • taxation
  • borrowing
  • charges for public services
  • profits of State-owned enterprises
  • sale of state assets
83
Q

what are the risks of public finance?

A
  • high levels of debt
  • growing importance of corporation tax receipts
  • very low capital spending base
  • growth risks (brexit, trump, etc.)
  • aging pressures
84
Q

What is a budget?

A
  • instrument of government policy
  • contract between citizens and State
  • resources raised vs allocation for delivery of services
85
Q

What is a framework?

A

process to support a predictable, accountable, transparent and efficient conduct of fiscal policy at the national level.

86
Q

Explain Ireland’s national law on budgets

A
  • no specific budgetary chapter in constitution or organic budget law
  • constitution provides some fundamental principles
  • Westminster model
87
Q

What makes a strong budgetary framework?

A
  • budgeting within fiscal objectives
  • alignment with medium-term strategic plans and priorities
  • performance evaluation and VFM
  • quality, integrity, and independent audit
  • transparents, openness and accessibility
  • participative, inclusive and realistic debate
  • fiscal risk and sustainability
  • capital budgeting framework
  • comprehensive budget accounting
  • effective budget execution
88
Q

what are the shortcomings of Ireland’s traditional budget model

A
  • highly centralised
  • high levels of secrecy
  • autonomous Ministers for Finance
  • low level of constraint in terms of political processes for fiscal decisionmaking
  • leads to procyclical decisionmaking
  • one year focus
  • incremental
89
Q

List Ireland’s budgetary reforms

A
  • 2015 OECD review of parliamentary budget oversight
  • annual budget process
  • enhanced parliamentary engagement with budgetary process
  • improved budget scrutiny and accountability
  • EU dimension
  • fiscal architecture strengthened
  • better spending outcomes / evidence based policy formulatoin
90
Q

what’s the rational for the fiscal rules

A
  • shared currency
  • need fiscal rules to avoid spill over effects between Member States
  • need for a rules-based framework
91
Q

fiscal rules 1997

A

Stability and Growth Pact

92
Q

fiscal rules 1998

A

preventive arm of SGP enters into force

93
Q

fiscal rules 1999

A

corrective arm of SGP enters into force

94
Q

fiscal rules 2005

A

Stability and Growth Pact 2.0 agreed

95
Q

fiscal rules 2011

A

6 pack enters into force

96
Q

fiscal rules 2012

A

fiscal compact agreed

97
Q

fiscal rules 2013

A

2 pack enters into force

98
Q

fiscal rules 2015

A

communication on flexibility

99
Q

In terms of the division of labour, what’s the role of the member states

A
  • decide on tax and spending levels
100
Q

In terms of the division of labour, what’s the role of the European Commission

A
  • assess compliance with rules

- prepares analysis to guide council

101
Q

In terms of the division of labour, what’s the role of the Council of Ministers?

A

decisions on the application of the SGP

102
Q

what’s the aim of the preventive arm?

A

MS run prudent medium term fiscal policies

103
Q

what’s the aim of the corrective arm?

A

correct excessive government deficits (gross policy error)

104
Q

what’s the objective of the preventive arm?

A

close to balance or in surplus

105
Q

what’s the objective of the corrective arm

A

deficit: 3% of GDP
debt: 60% of GDP or approaching at a satisfactory pace

106
Q

what’s the operationalisation of the preventive arm

A

medium term budgetary objectives

107
Q

what’s the requirement of the preventive arm

A

at the MTO or on the path towards it

108
Q

what’s the assessment of the preventive arm

A

structural balance + expenditure growth

109
Q

what’s the assessment of the corrective arm

A

effective action methodology

110
Q

what’s the process of the preventive arm

A

european semester

111
Q

what’s the process of the corrective arm

A

Excessive Deficit Procedure

112
Q

how is the preventive arm enforced

A

significant deviation procedure

113
Q

how is the corrective arm enforced

A

sanctions

114
Q

what’s the medium term objective

A
  • avoid pro-cyclical fiscal policies
  • country specific
  • Ireland’s is a structural balance of -0.5% of GDP
115
Q

what’s the expenditure benchmark

A
  • circumvent uncertainty surrounding the structural balance

- helps ensure sustainable expenditure trends

116
Q

what’s an excessive deficit procedure

A

involves a set of procedures designed to ensure a timely and durable correction of the gross policy error

117
Q

when was ireland in an edp

A

2009 - 2015

118
Q

what’s the structural balance

A

pays attention to economic ctcle

119
Q

what’s accrual accounting

A
  • recognition of economic events at the time at which they occur, regardless of when the related cash receipts and payments change hands
  • recognition of all stocks of assets and liabilities in balance sheet
120
Q

what are the benefits of accrual accounting

A
  • transparency
  • accountability
  • comprehensive
  • more complete picture of the financial position of the public sector as a whole
121
Q

what are the limitations of accrual accounting

A
  • no guarantee that its potential benefits will be realised
  • satisfaction with regards to objectives beyond transparency and accountability is uneven
  • accruals reforms are lengthy projects
122
Q

what three things has the move to accrual accounting taken account of?

A
  • wider reform agenda
  • recommendations from the IMF Fiscal Transparency Report
  • developments at EU level concerning the future implemntation of harmonised accounting standards
123
Q

mention two points about broader accruals accounting

A
  • 3/4 of OECD countries are using accrual accounting with some adopting accrual budgeting as well
  • however, questions are increasingly being raised regarding the cost and usefulness of accrual reforms, who impacts on public management and performance are not obvious to make stakeholders
124
Q

what’s the definition of taxation?

A

a compulsory payment to Government for which no benefit is received

125
Q

give examples of direct v indirect taxation

A

PAYE v VAT

126
Q

explain tax incidence

A

formal (legal) v effective (actual) burden

127
Q

list 3 types of tax

A
  • progressive tax
  • proportional tax
  • regressive tax
128
Q

what are the functions of a tax system

A
  • finance public expenditure
  • equity and redistribution
  • raise revenue efficiently
  • corrective taxation
  • macroeconomic stabilisation
  • growth and competitiveness
129
Q

what are the economic principles of taxation?

A
  • avoid distorting economic behaviour
  • equity
  • stability of revenues
  • simplicity of tax design
  • neutrality
  • “correcting” “market failure”
130
Q

what’s the OECD hiererachy of taxes which affect economic growth

A
  • corporation taxes
  • personal income taxes
  • consumption taxes
  • property taxes
131
Q

how does tax impact behaviour and outcomes?

A
  • most economic models outline in broad terms how an agent reacts to prices
  • price elasticities of supply and demand
  • taking pure economic rents does not create a distortion
132
Q

what’s an economic rent

A
  • a payment to a factor of production over and above what is needed to bring it into use
133
Q

what is equity in taxation

A

fairness

134
Q

what is horizontal equity

A

treat people the same / not distinguish by characteristic

135
Q

what is vertical equity

A

more you earn the more you pay

136
Q

what is efficiency in taxation

A

don’t distort economic behaviour

137
Q

what’s a corrective tax

A

want to change behaviour

138
Q

what’s simplicity in taxation

A
  • cost of compliance

- cost of administration

139
Q

what’s tax expenditure

A

reduces tax obligations with respect of a benchmark tax

140
Q

what’s the rational for intervention via a tax expenditure

A
  • generally a form of corrective taxation

- intervention hinges on existence of a market failure

141
Q

what are the department of finance (2014) guidelines for ex ante evaluation?

A
  • what objective does the tax expenditure aim to achieve
  • what market failure is being addressed
  • is a tax expenditure the best approach to address the market failure
  • what economic impact is the tax expenditure likely to have
  • how much is it expected to cost
142
Q

what are the Department of Finance (2014) guidelines to ex post evaluation?

A
  • is the tax expenditure still relevant
  • how much did the tax expenditure cost
  • what was the impact of the tax expenditure
  • was it efficient
143
Q

what’s the accessibility for beneficiaries of tax expenditure

A

simple, because of their automatic nature

144
Q

what’s the accessibility for beneficiaries of direct spending

A

more complex, requiring selection

145
Q

what are the administrative and compliance costs of tax expenditures

A

high, if exemptions are properly monitored

146
Q

what’s the administrative and compliance costs of direct spending

A

medium due to necessity of selection and allocation

147
Q

what are the possible abuses of tax expenditure

A

evasion, avoidance and rent seeking

148
Q

what are the possible abuses of direct spending

A

arbitrariness, inefficiency and capture of the allocating body

149
Q

what’s the flexibility of tax evasion

A

work with permanent laws, thereby generating stability but also inertia

150
Q

what’s the flexibility of direct spending

A

work with budgets, evaluation and regular reallocations

151
Q

what’s the transparency and accountability of tax expenditure

A

the automatic nature does not contemplate control of mechanisms of accountability

152
Q

what’s the transparency and accountability of direct spending

A

must be approved by legislature, as with all government expenditure

153
Q

what’s the expenditure control of tax expenditure

A

expenditure determined ex post, uncertain and unlimited which can cause fiscal imbalances

154
Q

what’s the expenditure control of direct spending

A

programmed and controlled spending limited by budget law

155
Q

what’s the equity of tax expenditure

A

only potential taxpayers benefit, with the highest income often benefiting the most

156
Q

what’s the equity of direct spending

A

discretion can provide more equitable access enhancing targeting of beneficiaries

157
Q

what’s Ireland’s highest tax expenditure

A

€865m exemption of investment income and gains of approved superannuation funds

158
Q

what’s the policy cycle of evaluation of public projects

A
  • identifying issues
  • policy analysis
  • policy instruments
  • consultation
  • coordination
  • decision
  • implementation
  • evaluation
159
Q

what’s the expenditure lifecycle?

A
  • appraisal
  • planing / design
  • implementation
  • projects / programme completion
160
Q

What’s the type of analysis when the estimated cost is €0.5m or less?

A

Simple Assessment

161
Q

What’s the type of analysis when the estimated cost is €0.5m to €5m?

A

Single Appraisal

162
Q

What’s the type of analysis when the estimated cost is €5m to €20m?

A

multi criteria analysis

163
Q

What’s the type of analysis when the estimated cost if over €20m?

A

Cost Benefit Analysis

164
Q

What’s a Cost Benefit Analysis?

A

a study that compares the costs and benefits to society of providing a public good

165
Q

What’s the method of a Cost Benefit Analysis?

A
  • clearly defined set of objectives for the project
  • statement of alternatives
  • statement of the constraints that impinge on the project, together with a listing of those alternatives that do not fall within the constraints
  • in respect of each chosen alternative (next questions)
166
Q

For a CBA, in respect of each chosen alternative …

A
  • benefits and costs expected over the economic life of the project and underlying assumptions
  • quantification of benefits and costs
  • statement of projected cash flows or cost / benefit balance sheet
  • calculation of the decision criteria and sensitivity test
  • identification of the distributional effects of the costs and beenfits
  • assessment of the pay back period
  • recommendation
167
Q

what’s discounting

A

allows benefits and costs that occur in different time period to be comparable by expressing their values in present terms

168
Q

what’s a counterfactual

A

a comparison between what actually happened and what would have happened without the intervention

169
Q

What’s Net Present Value?

A

sum of discounted benefits less sum of discounted costs

170
Q

what’s deadweight

A

what would have occurred anyway without the intervention

171
Q

what’s displacement

A

occurs when the creation of a positive programme outcome in one area leads to a loss of this activity in another area

172
Q

what’s additionality?

A

what the intervention delivers above and beyond what would have happened anyway

173
Q

attribution

A

what proportion of the outcome can be directly attributed to the intervention

174
Q

what’s financial analysis

A

only considers financial cash flows whereas economic analysis in the form of a CBA examines all costs and benefits for society and not just the direct financial flows arising from the project
e.g. construction of a sports stadium, road investment

175
Q

what’s a Cost Effectiveness Analysis?

A

if you can establish prices, use CBA. If not, CEA

e.g. health technology, housing

176
Q

What’s a Multi Criteria Analysis?

A

establishes preferences between project options by reference to an explicit set of criteria and objectives
e.g. social housing provision

Economics (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions