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Questions and Answers
Which of the following is a direct impact of public finance decisions on household finances?
Which of the following is a direct impact of public finance decisions on household finances?
- Corporate taxation rates
- Disposable household income through taxation and benefits (correct)
- International trade agreements
- Government regulation of monopolies
Pensions are solely a matter of individual financial planning and have no impact on socio-economic stability.
Pensions are solely a matter of individual financial planning and have no impact on socio-economic stability.
False (B)
Name the three pillars of the current pension paradigm.
Name the three pillars of the current pension paradigm.
State pension, Occupational pension, Voluntary private pension
In 'full' privatisation of infrastructure, the government ______ public assets to the private sector.
In 'full' privatisation of infrastructure, the government ______ public assets to the private sector.
Match the type of Public-Private Partnership with its description:
Match the type of Public-Private Partnership with its description:
Which of the following is an assumed benefit of Private Finance Initiatives (PFIs)?
Which of the following is an assumed benefit of Private Finance Initiatives (PFIs)?
Private Finance Initiatives always result in lower overall costs for public projects compared to traditional public funding.
Private Finance Initiatives always result in lower overall costs for public projects compared to traditional public funding.
What is one potential problem associated with Private Finance Initiatives?
What is one potential problem associated with Private Finance Initiatives?
A key link between taxation and democracy is the concept of taxation and ______.
A key link between taxation and democracy is the concept of taxation and ______.
Match the concept with its description in the context of public finance and democracy:
Match the concept with its description in the context of public finance and democracy:
Which of the following characterizes the 'shift towards' from 'democratic capitalism'?
Which of the following characterizes the 'shift towards' from 'democratic capitalism'?
In the context of public finance, 'state capacity' refers exclusively to the financial resources available to the government.
In the context of public finance, 'state capacity' refers exclusively to the financial resources available to the government.
What is meant by 'animal spirits' in the context of the wider economic impact of public finance decisions on corporate finances?
What is meant by 'animal spirits' in the context of the wider economic impact of public finance decisions on corporate finances?
The move 'from democratic capitalism’ involves a shift towards multi-level governance and ______ parties, which can lead to democratic erosion.
The move 'from democratic capitalism’ involves a shift towards multi-level governance and ______ parties, which can lead to democratic erosion.
Match the pension pillar with its funding mechanism:
Match the pension pillar with its funding mechanism:
What is a characteristic of state pension systems?
What is a characteristic of state pension systems?
Occupational pensions are exclusively funded by the employee.
Occupational pensions are exclusively funded by the employee.
In Private Finance Initiatives, how is debt often viewed concerning the public sector's balance sheet?
In Private Finance Initiatives, how is debt often viewed concerning the public sector's balance sheet?
Public finance decisions can impact corporate finances through taxation and ______, also known as corporate welfare.
Public finance decisions can impact corporate finances through taxation and ______, also known as corporate welfare.
Match each term with its role in the context of public and private finance:
Match each term with its role in the context of public and private finance:
Which of the following is a challenge associated with Private Finance Initiatives?
Which of the following is a challenge associated with Private Finance Initiatives?
Public-Private Partnerships always result in a more efficient delivery of public services.
Public-Private Partnerships always result in a more efficient delivery of public services.
According to Tanzi, what does public finance deal with?
According to Tanzi, what does public finance deal with?
A potential negative consequence of prioritising markets and adopting market logics is more contested and limited responses to ______ needs within class society without classes.
A potential negative consequence of prioritising markets and adopting market logics is more contested and limited responses to ______ needs within class society without classes.
Match the element of 'democratic capitalism' with its modern criticism:
Match the element of 'democratic capitalism' with its modern criticism:
How can public service scope influence private service costs, such as dentistry?
How can public service scope influence private service costs, such as dentistry?
The concept of 'lock-in effect' in PFIs refers to the enhanced flexibility that governments have to renegotiate contracts based on changing needs.
The concept of 'lock-in effect' in PFIs refers to the enhanced flexibility that governments have to renegotiate contracts based on changing needs.
What is the primary goal of 'participatory budgeting' in the context of public finance?
What is the primary goal of 'participatory budgeting' in the context of public finance?
In the context of state capacity, outsourcing, expertise, and funding all contribute to the overall degree of ______.
In the context of state capacity, outsourcing, expertise, and funding all contribute to the overall degree of ______.
Match the following terms related to public finance with their descriptions:
Match the following terms related to public finance with their descriptions:
Which of the following is a key element of 'democratic capitalism'?
Which of the following is a key element of 'democratic capitalism'?
The concept of 'regulatory capture' suggests that regulations always serve the public interest without being influenced by private sector interests.
The concept of 'regulatory capture' suggests that regulations always serve the public interest without being influenced by private sector interests.
What is the potential impact of savings and employment conditions on Private Finance Initiatives?
What is the potential impact of savings and employment conditions on Private Finance Initiatives?
A key area of debate in public finance concerns the balance between public and ______ sector involvement in delivering public services.
A key area of debate in public finance concerns the balance between public and ______ sector involvement in delivering public services.
Match the potential impact with the respective public finance decision
Match the potential impact with the respective public finance decision
When the government replaces a public provider with a private contractor while still retaining ownership of the project, it is called:
When the government replaces a public provider with a private contractor while still retaining ownership of the project, it is called:
Public-private partnerships do not impact state capacity or state legitimacy.
Public-private partnerships do not impact state capacity or state legitimacy.
What are benefits paid regularly by a previous employer or the government into your retirement savings called?
What are benefits paid regularly by a previous employer or the government into your retirement savings called?
The balance between public and private sectors is referred to as public ______, regulatory capture and dependence.
The balance between public and private sectors is referred to as public ______, regulatory capture and dependence.
Match the function of the pension system with its description
Match the function of the pension system with its description
What type of pension enables additional savings?
What type of pension enables additional savings?
Flashcards
Contracting-out in PPPs
Contracting-out in PPPs
The owner is still the government, but private contractors replace public providers.
Private financing of infrastructure
Private financing of infrastructure
Replacing a capital asset owned by the public sector with services from assets owned by the private sector.
Joint ventures in PPPs
Joint ventures in PPPs
The government and the private sector share asset ownership in a project.
Privatization of infrastructure
Privatization of infrastructure
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Efficiency and Innovation
Efficiency and Innovation
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Off Balance Sheet Projects
Off Balance Sheet Projects
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Risk and Cost Transfer
Risk and Cost Transfer
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Public liability and expenditure
Public liability and expenditure
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Pension as deferred salary
Pension as deferred salary
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Pensions and Stability
Pensions and Stability
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State Pension
State Pension
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Voluntary private pension
Voluntary private pension
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Impact on Household Finances
Impact on Household Finances
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Welfare Systems
Welfare Systems
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Taxation and Representation
Taxation and Representation
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Governance
Governance
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Democratic legitimacy
Democratic legitimacy
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State capacity
State capacity
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Study Notes
- Week 6 Lecture is about Public-Private Partnerships, state capacity and legitimacy
Public and private finance - Interconnections
- Public finance decisions impact household/private finances through taxation and benefits which dictates disposable household income.
- The scope, funding, quality, and accessibility of public services affect private service costs, such as dentistry.
- Public finance decisions affect the wider economic context, influencing employment, pay, and confidence.
- The impact of public finance decisions on corporate finances happens via taxation and subsidies, which directly support business and profitability.
- Public services and infrastructure impact ease of business operations and productivity.
- The wider economic context affects 'animal spirits', investment, and profits.
Pensions
- Pensions act as deferred salary payments for labour.
- Pensions are a crucial element in welfare systems and major expenditure.
- Pensions provide socioeconomic stability
- Pensions highlight the politics of age and pensions
Pensions - Current Paradigm
- Pension policy mix includes state pensions covering redistribution, occupational pensions as mixed systems, and voluntary private pensions funded by capitalisation.
- Current systems allow universal basic subsistence, earnings-related status maintenance and private savings top up for luxury.
Public-Private Partnerships - Types
- Contracting-out public infrastructure projects to the private sector means the government retains ownership of the capital with private contractors replacing public providers.
- Private financing of infrastructure means replacing capital assets owned by the public sector with services from private sector-owned assets.
- Joint ventures involve shared asset ownership between the government and the private sector.
- Privatisation of the infrastructure happens when in 'full' the government sells assets to the private sector, or partially retains a proportion of them.
Private Finance Initiatives - Rationale/Assumed Benefits
- The public sector gains efficiency and innovation through private sector
- Major projects can be developed without using public funding initially being seen as ‘off balance sheet’
- The private sector carries some risks and costs that would otherwise be taken by the public sector.
Private Finance Initiatives - Challenges/Potential Problems
- Public liability and expenditure is a challenge
- Consider overall costs over the lifecycle of a project, and its impact on other spending commitments.
- Transaction costs and contractual incompleteness can be an issue
- Lock-in effect and regulatory problems can occur
- Private sector versus public interests should always be considered.
- Savings and employment conditions is important.
- Conflicts arise between profits and public sector values, exemplified in private foster care.
Public Finance and Democracy - Basics
- There is a link between taxation and representation
- There is a link between democratisation and the expanse of public finance
- The nature of public policy is contested, affecting public finance
- There is interplay between changes to public finance and changes to governance
Public Finance and Democracy - Changes to State Capacity and State Legitimacy
- Legitimacy is achieved through democratic representation and modes of governance
- Legitimacy happens via direct participation like participatory budgeting
- Capacity is the public sector's ability to outsource, fund
- Capacity is found in the balance between public and private sectors, including public procurement. Regulatory capture and dependence also affect capacity.
From 'Democratic Capitalism'
- 'Democratic capitalism' once focused on the nation-state, political parties, 'taming' markets, and responding to social needs through class compromise
- A shift is occurring towards multi-level governance, catch-all parties, and democratic erosion
- Markets are prioritised with more contested and limited responses to social needs within defined classes
- Diverse concepts and debates surround the extent and nature of this shift, and future trends are uncertain.
Conclusion: Linking Public and Private Finance
- Public Finance deals with the choices that groups make, together, and with the pursuit of collective interests through joint actions
- Public and private finances are interconnected.
- These connections are complex and substantive in mixed economies reliant on public-private partnerships.
- These partnerships question state capacity and legitimacy.
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