Public Economics and Intergovernmental Grants E-Book

Murali Mg

• Herausgeber: GRIN Publishing
• Sprache: Englisch

Veröffentlichungsjahr: 2016

Beschreibung

Essay from the year 2016 in the subject Business economics - Economic Policy, grade: A, University of South Florida (PG Business School), course: Msc Healthcare and Public Administration, language: English, abstract: This text gives an insight into public economy. It explains intergovernmental grants, their objectives, history and impact on economy. According to Musgrave (1939), the public economy is comprised of three functions; stabilization, distribution and allocation. Accordingly, the government should be able to stabilize prices, avoiding excessive inflation and has to ensure full employment. Secondly, the government should see that the resources are allocated efficiently and finally the governments should also ensure socially accepted wealth levels and market access are maintained, if not maintained the wealth has to be redistributed. Apparently by doing this governments can and have to stabilize employment levels, prices, and economic growth.

Leseprobe

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Content

Public Economics

Intergovernmental Grants

Objectives of Intergovernmental grants

History of Intergovernmental Grants

Impact of Intergovernmental grants

Bibliography

Public Economics

As stated by (Smith, 1776) who is considered to be the founding father of modern economics, economics is the study of the nature and causes of nations’ wealth or simply as the study of wealth. It is the branch of social science that studies economic activities and economic activities usually involves production, exchange and consumption of goods and services. Public economics can be referred as the branch of economics that studies economic policies and the main emphasis of the study is upon taxation. Public economics focuses on answering two questions; how do government policies effect the economy and how should policies should be designed to maximize welfare (Bruich, 2012).

According to (Musgrave, 1939), the public economy is comprised of three functions; stabilization, distribution and allocation.

Intergovernmental Grants

As stated by (Payson, 2014) Intergovernmental grants are direct budgetary outlays that flows from federal government to subnational governments that is flow of grants from federal government to state and local governments and authorities. It is also expressed as the fiscal relationship between the federal government and subnational governments. Intergovernmental grants are one of the dominant revenue sources for subnational governments; state and local governments in most of the developing countries and these grants are very important as they play major role in strengthening public sectors and also to improve the efficiency and equity of local service position and fiscal health of subnational governments (CIESIN, 2012). Intergovernmental grants are used in many countries finance sub-national spending and implement national policies (OECD, 2006). Basically, all countries have Intergovernmental grants with difference in structures and systems, however they serve on the sole aim of strengthening public economy. For instance, in United States, the Intergovernmental grants are paid from federal government to state and local governments.