- Wikipedia:
Public finance is the study of the role of the government in the economy. It is the branch of economics that assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones. The purview of public finance is considered to be threefold, consisting of governmental effects on:
- The efficient allocation of available resources;
- The distribution of income among citizens; and
- The stability of the economy.
- When should the government intervene in the economy? To which there are two central motivations for government intervention, Market failure and redistribution of income and wealth.
- How might the government intervene? Once the decision is made to intervene the government must choose the specific tool or policy choice to carry out the intervention (for example public provision, taxation, or subsidization).
- What is the effect of those interventions on economic outcomes? A question to assess the empirical direct and indirect effects of specific government intervention.
- And finally, why do governments choose to intervene in the way that they do? This question is centrally concerned with the study of political economy, theorizing how governments make public policy.
- From CFI: What is Public Finance?
Public finance is the management of a country’s revenue, expenditures, and debt load through various government and quasi-government institutions. This guide provides an overview of how public finances are managed, what the various components of public finance are, and how to easily understand what all the numbers mean. A country’s financial position can be evaluated in much the same way as a business’ financial statements.
- Tax collection
- Budget
- Expenditures
- Deficit/Surplus
- National Debt
For More:
- Texas AG: Public Finance.
- IMF: Public Finances in Modern History.
