This article talks about an overview to public finance, further explanation will be discussed later on separate article.
1. Public Finance Definition
What is Public Finance? Public Finance/Public Sector Economics/Public Economics is the field of economics that analyzes government taxation and spending policies and their influence on the allocation of resources and distribution of income.
Public finance economics both analyze actual policies and develop guidelines for government activities. In the latter role, economist are influenced by their attitudes toward the role of government in society.
In organic view of society: individuals are valued only by their contribution to the realization of social goals. These social goal are determined by government.
In mechanic view of society: government is a contrivance erected to further individual goals. It is not clear how the government can reconcile sometimes conflicting individual goals.
3. How to Measure the Size of Government?
The size of government can be measured by the number of workers, annual expenditures, revenues, etc. These measures have deficiency. In particular, these items miss the impact of regulatory costs. Nonetheless, there is strong evidence that the impact of the government on the allocation of national resources has increased over time.
Next page, types of government expenditures and budget document