Theory of Public Expenditure.pptx - expenditure \u2022Public expenditure is spending made by the governmentof a country on collective needs and wants such

Theory of Public Expenditure.pptx - expenditure...

This preview shows page 1 - 5 out of 17 pages.

expenditure Public expenditure is spending made by the government of a country on collective needs and wants - such as pension, provision, infrastructure, etc. Until the 19th century, public expenditure was limited as laissez faire philosophies believed that money left in private hands could bring better returns.
Theory of Public Expenditure Increasing Public Expenditure Why? Wagner’s Law of Increasing State Activities or spending Reference H. L .BHATIA Public Finance Pages 218-225 . and 233-235 Mushgrave and Mushgrave “ Public Finance” pages 41-44 Adolph Wagner born in 1835 died in 1917. Wagner is the main protagonist of a specific school of economics and social policy, called "State Socialism" He examined historical data on expenditure, primarily of Germany.
Significance of the public expenditure theory Test whether the role of the government is limited as classicists claim Collected expenditure data of German government and the local government. Analyzed time series data on expenditure . It emphasized on the long term trend rather than short term changes in the public expenditure. He assumed that the economy functions smoothly without social disturbances . This study is unique as the researchers have not done this kind of analysis on expenditure before.
Significance of the public expenditure theory According to him, there are inherent tendencies for the activities of different layers of a government to increase both intensively and extensively (or coverage). There exists functional relationship between economic growth public activities resulting Government sector grows faster than the economy.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture