In this book, Professor David Starrett organizes within a single framework the major theoretical foundations of modern public sector economics. He presents a unified treatment of market failure that encompasses externalities, pure public goods, local public goods and natural monopolies. Professor Starrett then develops and assesses the efficacy of the various planning procedures - including representative voting, benefit cost analysis, incentive compatible design mechanisms and the free market. He devotes attention to both national and local issues, with the aim of identifying those methods that are best suited to each arena separately. Special attention is paid to financial arrangements, techniques for eliciting necessary information that is not readily available, and identification of biases that will result from incorrect procedures. This study will be useful to graduate students and economists who are interested in public finance or welfare economics.