1. The economic role of the state,
2. Welfare economics and Pareto efficiency, 
3. Market imperfections and the role of the state,
4. public goods,
5. Private goods provided by the state,
6. Conditions for the efficiency of public goods,
7. Public mechanisms for resource allocation,
8. Public production of private goods,
9. Sources of inefficiency in the public sector,
10. The problem of externalities,
11. Solutions to external effects by the public sector,
12. Cost benefit analysis,
13. Public sector of Bosnia and Herzegovina

• Lectures – 5 points
• Test – 20 points
• Seminar paper – 35 points
• Oral exam – 40 points

Students' knowledge is checked through a test. In addition, students create seminar papers that are presented and a discussion is held on the subject problem with all students. The final oral exam evaluates students' theoretical knowledge and the ability to apply that knowledge to solving practical problems in the creation of local economic development policy.

Mandatory

1. Joseph E. Stiglitz: Economics of the public sector, Belgrade Faculty of Economics, Belgrade, 2004.
2. Meho Bašić: Economics of the public sector, Faculty of Economics, University of Sarajevo, 2004