ID: 110880266

NAME: KEZIA SEYRAM PETERSON.

DATE:FEBRUARY 10TH-11TH

QUESTION 1A:

The theory of public finance that explains the above passage is

public choice theory. Public choice theory is the theory that uses
principles used in the field of economics to make political decision. In
a real sense, public choice takes the principles economists use to examine
human activity in the tradeplace or in other words marketplace to
make a collective decision. The first assumptions of the theory is that,
the behaviour studied in the personal workplace is self-interest.
Although people may care about others, they often care about
themselves. In most or most economies of the world, everyone wants the
best for themselves, be it a worker, a consumer, an employer, a
politician, a voter, a low-income earner, a bureaucrat, etc. Just like it
was in the passage that the road condition in the town was in a
very poor state. That means the member of parliament did not do
the work for which he was voted for after getting the vote. As he
got what he wanted, he ignored the wants and needs of the city.
This is what we term promise and fail. Most candidates who want
to have or get power, will come and make numerous promises to
people because they know people are moved by what they hear.

Another assumption of the theory is that, individuals use

information collected from various angels to make decisions. As in the
passage, Okatakyie Aduhene organized a social media campaign to
rally against the MP who was in office. This means that Okatakyie
Aduhene was actively looking out for. information from social media
personnels to mobilize others with the support of his brothers. This
means that information and social media are a powerful tool or
weapons used in making rational decisions. Because Aduhene
Okatakyie knew the power of social media, he used it to his benefit to
ensure that most people will be on his side so in order to make
the MP loose his voters.

QUESTION 1B:

Mechanisms established in theory to ensure voter interest are as

follows:

First and foremost the electoral machinery is used to serve the needs of
the electorate. The election is done by collecting decisions taken by
several committees. These elections gives the electorate the chance
to choose who they want as leaders and therefore hold them
accountable for their performance. As an aspiring Member of Parliament,
you must be diligent, transparent and trustworthy in all your
dealings. As you will be held accountable for whatever you do.
Elections they say strengthen the stability of the political community
and it also facilitates social integration. It can be seen in the passage
that, the MP had nothing to count for during his term of office as he was
unable to perform his duties. This is why Okatakyie Aduhene, together
with his brothers, organized a campaign against the MP. As Goldwater
once said in 1964, 'majority elections are an echo for voters, not a choice'.

Second, another mechanism used was political competition. This

mechanism provides incentives for political leaders to create policies
and meet the needs of their people. Political parties know very well that
voters want to hear that political parties take their preferences into
consideration. These political parties tend to propose policies and
make promises that match the needs of the people just to secure
their votes. In the passage, Okatakyie Aduhene campaigned against the
city councillor, hoping that the new candidate elected would solve the
road problem and serve the town and do what's best for town. So
current. MP and his opponent must compete with each other.

QUESTION 1C:

According to the passage, the journey from Twepease to domebra had

to be a thirty minute travel journey but due to the poor condition of
the road encountered by Okatakyie Aduhene, he had to now use
other alternatives to get to his destination which more time. He had to
go through another town called Fenaso Nkwanta and Kwame
Tanokrom, which added another two hours to the trip. So it can be
said that Okatakyie used a total of two hours and a half to arrive
at his true destination.

QUESTION 2A:

As a student of public finance, I am more than willing to help resolve this

debate and shed light on the economic responsibilities of governments.

1. Development of infrastructure: Governments play an important role in

developing and maintaining infrastructure such as roads, bridges, schools,
hospitals, state-owned estates and public transport systems. Such
investments helps in the country's economic growth, improves trading
and improve the overall quality and well being of the nation's citizens
because when a country's citizens are happy , there will be peace
and hamonious living in the country.
 2. Creation of job opportunities for the members of the country :
Governments formulate policies to aid in economic growth and creating
jobs especially for the youth. In so doing, the government will also
provide sufficient incentives for businesses to expand in the country so
new jobs operations will be created. Promoting entrepreneurship and
investing in education and skills training for unemployed people can also
increase the employability of the workforce.

3. Another role the government play in the country is the

provision of public goods: Government ensures the provision of essential
public goods which are essential for the well-being of society because it
is not interested in making profit but rather the citizens welfare. The
government does this because it knows that when it involves the
private sectors, these are only looking for the benefit or profit they
will get be . Examples of these private goods include national
security, public safety, health care, education, and environmental
protection.

5. Creation of social safety nets to eradicate poverty : Governments

often establish social safety nets to protect vulnerable people of society.
This may include offering social assistance programs , health assistance,
retirement pensions, and welfare programs. This is done to make sure
that the poor and needy are being taken care of .

6. Price Control and Protection of Consumers: Government controls

many sectors of the economy to protect consumers from profit and price
exploitation and to ensure fair competition which makes goods and
more affordable. This includes enforcing laws, establishing quality and
safety standards, and overseeing industries such as banking, utilities, and
telecommunications. Government plays a regulatory role to prevent
market failure and promote equity It is important to understand that the
specific roles and policies of governments may vary depending on the
country, political views and current economic conditions. Governments
often adopt a mixed economic approach, combining to find a balance
between efficiency, equity and fairness. I sincerely hope that this
resolution clarifies the government's economic roles and helps settle the
debate between John Ankrah and Owusu Kwaby.

QUESTION 3 A:

The following are the sources of revenue that the government can tap
into in setting up the project.

First and foremost, taxes are a major source of revenue for the
government. One may ask what are taxes? A tax is a levy paid by
individuals to the government to fund public service. This may
include corporate tax, value added tax, import duty etc. To go ahead,
receiving aid, grants and donations from international organization
helps in generating income. Also, the government can borrow from
local and international sources or borrow from banks to finance the
project. Finally, the government can generate revenue through fines and
penalties to finance projects. This should be charged to those who break
state laws.

QUESTION 3 B:

Jacobu District Council can ensure that the following sources of

innovation increase revenue through the following:

First, collection of property rates from residential and commercial

properties can increase revenue at the local leve to improve the living
conditions the town

Secondly , by issuing a local business license. Introducing fees and

charges for these licenses can ensure increased revenue.

Thirdly, the assembly of Jacobu district can also tax the traders operating
in the local market.

Finally, the Jcaobu Council should promote local tourism to foreigners

visiting the city by developing tourist spots that can attract visitors.

QUESTION 3 C:

Challenges associated with revenue mobilization in Ghana include:

First, tax evasion and avoidance by members of the economy. Some

people do not pay taxes because they engage in illegal activities and
crimes. They deliberately do not pay their taxes due to the corrupt
methods they used in acquiring the properties.

Secondly, corruption in administration and revenue collection agencies

hampers revenue mobilization.Due to the corrupt practices of the revenue
officials, the government does not have enough money to develop the
country.

Thirdly, revenue mismanagement at various levels of government can

limit and reduce development and taxpayer compliance. Irregular
distribution of taxes collected hampers the development of the country
and the citizens of the country are also affected.

To continue, insufficient public awareness and limited knowledge and

understanding of tax policies among those who pay tax lead to low
compliance by members of the state. To put a stop to this, there
should be public education about the necessity, purpose and benefits
of tax and tax officials, so that tax related frauds can be curbed.

Finally, economic challenges in Ghana such as economic recession can

have a serious impact on income generation in Ghana.

QUESTION 4 A:

Public goods are non-excludable and non-rivalrous goods. This means

that anyone can enjoy it, not to mention street lighting, national parks,
etc. Private goods are also excludable and competitive goods.This means
that access to it is restricted and one person's consumption can
reduce the quantity of the good.

QUESTION 4C:

Characteristics of public good ( excludable good) are

Firstly, a public good is said to be excludable when people or

individuals have get the chance to enjoy or use it if they are willing
to make payment for the service that particular good provides
example golf club membership etc.

Non-rivalry: Does not reduce one person's use of a good while maintaining
the ability of others to enjoy it. Characteristics of personal goods
Excludability: Access to these items is restricted or inaccessible to others.
Rivalry: When one person uses a good, it reduces the availability of it to
others

QUESTION 4 C:

Yes, there are externalities associated with road construction on the

higTema highway. These external characteristics can be positive or
negative. During the construction of the roads, negative externalities
such as noise pollution, health risks, destruction to local businesses are
sometimes not taken into account by the parties involved in the
construction, which can affect the welfare of the entire society. Since this
Tema motorway is being without asking anyone to pay for it , then
people from both far and near and also enjoy it and this makes it
a positive externality.

QUESTION 4 D :

Three policies that can be used to correct negative externalities are:

Pigouvian Taxes or Subsidies: A pigouvian tax is a tax forced on a

party who is responsible for creating a negative externality. The tax
levied on such party is to stop the activity causing the externality ,
on the other hand, when can be used to encourage activities that
generate positive externalities.

Government regulations and standards: Government can implement or

enforce regulations and standards to minimize or limit negative
externalities. For example, the government may require mitigation
measures to limit the adverse environmental effects of a project
and also reduce or minimize the disturbance, or noise barriers during
these construction.

Cap and trade systems: This system includes a restriction on the total
amount of pollution allowed especially in marketplaces. Permits are
issued to generate the externality, and these permits can be sold,
and bought or traded to often increases the efficiency of external
allocation.

QUESTION 5 A:

Wagner's theory, also known as the law of increasing government

activity, argues that as an economy grows, there is an expansion in
the role and size of government. Again, Wagner's theory states that
there is a positive relationship between the per capita income of a
person or a citizen of a country, which means that as the economy
grows, government spending will also increases. To continue with ,
Wagner's stated that public expenditure may increase due to
factors such as population growth, urbanization and industrialization.
He also believes that government spending will mainly focus on
areas such as education, transportation and social welfare of its
citizens.

On the other hand, the Rustow Musgrave theory of government

spending emphasizes the role of economic growth in determining the
level of government spending. Rustow argues that governments
should invest more in the economy in the early stages, therefore
raising taxes and allowing higher levels of public spending. He also
suggests that government spending should be increased to invest in
capital projects and infrastructure that can promote economic
development.

In terms of their relevance and applicability to Ghana, both theories

may be important to some piont. Ghana is a developing economy that
has experienced rapid urbanization and industrialization in recent
times. Ghana as a country also tries it maximum best cater for the
need of it citizens by expanding its its resources to cater for need
for the people as it encounters more rapid economic changes.
However it is very important to know that no theory is universally
applicable and their applicability may vary depending on the
circumstances of a state. Also in past and present years, the
government of Ghana have also tried their best when it comes
investment in the economy. This is because the government have
made sure to formulate good policies in the country just like in the
case of the E- levy. The taxes or money generated from there as
also add up to form of revenue to the government . This revenue is
used to promote economic development.