Course Description and Objectives

Cities in the developing world are faced with a dilemma: they have some of the fastest growing populations in the world that require more urban services than ever but they also have limited fiscal and institutional capacity to provide them.

This course explores the question of how to pay for urban public services in developing countries. It surveys both public finance theory and applied policy debates. Students of this course should come away with facility in public finance analysis, familiarity with a variety of sources of public finance and their tradeoffs, and a general theoretical framework with which to approach real urban financing problems in developing countries.

This course is a policy-oriented public finance course which uses cases, explicitly discusses the implicit ethical issues, and considers diverse public financing arrangements and institutional contexts in order to appreciate the difficult choices the public sector faces in developing countries. Students should have taken at least one micro-economic theory course as a pre-requisite or consult the professor. As needed, the instructor will schedule recitations for students who would benefit from additional help in mastering the material.


Students will submit the following and be graded according to the following weights:

activities percentages
Problem Sets 40%
Final Exam 50%
Reading Presentation 10%

Problem Sets

There will be four problem sets due in the course.

Final Take-Home Exam

The final exam is an open-book, open-note exam. Students will be asked to display their understanding of the concepts discussed in the reading and class meetings.

Reading Presentation

In an effort to promote lively classroom discussion and encourage students to do the reading, each student will sign up to do a very short 10-minute presentation of the day's discussion case.