Understand the principles of government finance, sources of public revenue, public expenditure policy, and the application of fiscal policies in stabilising the national economy.
Public Sector Economics & Finance provides the theoretical foundation that underpins tax policy in Ghana and globally. Candidates develop a deep understanding of why governments tax, how public expenditure decisions are made, the economics of market failure, and the design principles for good tax systems. This paper contextualises all subsequent taxation papers — giving candidates the economic reasoning needed to critically evaluate tax laws and advise on their impact.
Views of government, constitutional mandate for public finance, and the rationale for government intervention in markets.
Pareto optimality, consumer and producer surpluses, the efficiency of competitive markets, and market failure.
Non-excludable, non-rival goods; positive and negative externalities; Pigouvian taxes and subsidies.
Who ultimately bears the burden of tax — statutory vs. economic incidence; effects of elasticity on tax burden.
Diamond-Mirrlees framework; optimal income and commodity taxation; efficiency vs. equity trade-offs.
Keynesian multiplier, deflationary and inflationary gaps, supply-side fiscal policy, and policy lags.
Domestic and external borrowing, debt service capacity, inter-generational equity, and effects on capital formation.
Fiscal decentralisation, fiscal disparity, and the theory of grants between central and local government.
This paper blends economics theory with policy analysis. When answering, always explain the economic mechanism first, then apply it to the Ghanaian context. Examiners reward candidates who connect theory to real-world tax policy examples.
Tax Policy Analyst
Revenue Authority Officer
Economic Adviser (Ministry of Finance)
Development Finance Specialist
Academic/Researcher
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