Department of Finance Theory

The Department of Public Finance Theory is an academic discipline that examines the role of the state within the economic system on a theoretical basis, addressing both the normative and analytical dimensions of public finance. It provides a holistic understanding of how the state’s revenue generation and expenditure processes are evaluated not only from a technical standpoint but also in the contexts of social justice, economic efficiency, and political legitimacy.

The department’s main areas of study include:
• The economic role of the state: Theoretical analysis of the justifications for state intervention, including market failures, externalities, public goods, and income distribution issues.
• Theory of public revenues: Examination of the effects of taxation on economic behavior, distribution of tax burdens, principles of optimal taxation, and the impact of fiscal policies on income inequality.
• Theory of public expenditures: Analysis of how public spending decisions affect individual welfare, production, and consumption structures, evaluated through the principles of efficiency, equity, and sustainability.
• Relationship between fiscal policies and macroeconomic balances: Assessment of how fiscal policies influence economic structures in the contexts of inflation, unemployment, growth, and public borrowing.
• Normative analysis: Exploration of the “how should it be?” question regarding fiscal regulations, grounded in ethical, fair, and democratic principles.

This discipline closely interacts with fields such as economic theory, public policy, political science, and law. It equips students with the ability to understand the conceptual structure of economic models and to evaluate the societal impacts of policy implementations.

Public Finance Theory opens the door to fundamental conceptual inquiries within the public finance literature while contributing to the rationalization of policies at the practical level, bridging academic thought with policy-making processes.