This book attempts to integrate the study of the various aspects of public sector economics by viewing all the government's activities as a product of the democratic decision making process. Holcombe integrated this theme into the text because he believes 1) A student's understanding of the public sector will be incomplete unless they understand the process in which democratic decision making has created the existing public sector institutions. 2) Unlike the invisible hand of the market (that is a result of human action but not of human design) the public sector of the economy is the result of human design. Thus, in a democratic government, every voter plays a part in the process.
PART 1. Introduction
1. The Public Sector
2. Principles for Analyzing Government
PART 2. Economic Efficiency
3. Property Rights and Economic Efficiency
4. Externalities
5. Public Goods
6. The Economic Role of the State
PART 3. An Economic Analysis of Democracy
7. A Theory of Collective Action
8. Public Sector Demand
9. Supply and Demand in Political Markets
PART 4. Taxation
10. Positive Principles of Taxation
11. Principles of Tax Policy
12. Taxes on Economic Transactions
13. The Taxation of Income
14. Personal Income Taxation in the United States
15. Taxes on Business Income and Wealth
16. The Tax System in the United States
PART 5. Government Expenditure Programs
17. The Government Budgeting Process
18. Taxation and Redistribution
19. Government Redistribution Programs
20. Social Security
21. Education
22. Health Care
23. National Defense
24. The Federal System of Government