The Economics of Government

We examine the economics of government in this textbook. Consequently, we dedicate every chapter to one aspect of government, and its interference with an economy. Students can use this textbook for a first course in public economics or as a supplement to an introductory microeconomics or macroeconomics course. Furthermore, readers can use this textbook as a reference guide for people who want a comprehensive book on the economics of government without majoring in economics. The inspiration for this textbook came from a famous quote by Thomas Jefferson, one of the founding fathers of the United States. He stated, “Whenever the people are well-informed, they can be trusted with their own government.” For example, communism failed economically in Russia because the Soviet government controlled every aspect of its markets and economy. On the other hand, the communists control a flourishing China because the Chinese government embraced the ideas of free markets and unleashed the entrepreneurial spirit and drive of the Chinese people. Thus, the Soviet economy stagnated, while China continues thriving and prospering. The political system itself is not important but the relationship between government and its society. We study this relationship comprehensively in this textbook.