What Is Public Expenditure?

Public expenditure is the name given by western scholars to the fiscal expenditure of capitalist countries. Because the fiscal expenditures of capitalist countries involve the "public sector" such as the central government, local governments, and public corporations (mainly state-owned enterprises in capitalist countries), they are named. Western scholars believe that public expenditure can be defined as all expenditure under the control of the public sector; it can also refer to the part of expenditure that uses government tax or borrowing as the source of funds. The traditional public expenditure scope refers to the recurrent expenditures, capital expenditures of the central and local governments, and capital expenditures of public corporations. ^[1]

Public expenditure

The principle of "strengthening economy and seeking efficiency"

The so-called savings refers to the saving of human, material and financial resources in the course of economic and other activities. The so-called efficiency refers to the comparative relationship between consumption and results in the course of economic and other activities. In a market economy, it is the comparative relationship between input and output measured in currency.

The principle of "all-round consideration and comprehensive arrangement"

The principle of "all-round consideration and comprehensive arrangement" means that when arranging public expenditure, the government must comprehensively consider and arrange the expenditure needs of various quarters and its own financial resources, ensuring both focus and general care.

At present, under the background that the system transformation has not yet ended, the public expenditure arrangements should carefully handle the following proportional relationships:

(1) The relationship between reform, development and stability.

(2) The relationship between finance and market.

(3) Financial

Classified by market relationship

Public expenditure by market relationship is classified as:

The so-called scope of public expenditure is an extension of the boundary determined by fiscal connotation. Public finance is a social resource allocation activity that meets the public needs of society. This is the basic basis for understanding and defining the scope of public expenditure. Social public needs are neither the needs of everyone or the needs of everyone in general, but the needs of maintaining a certain social existence and normal development. What meets the public needs is social public affairs, which is (1) represents the common interests and long-term interests of the whole society, and can only be achieved by the society to organize and implement; (2) family and business departments are unwilling to do, It is also a matter that society must do; (3) Although it can be organized by ordinary members of society, only the society as the main body can organize the affairs to effectively coordinate the interests of social members. It observes from the perspective of market economy, that is, in the allocation of social resources, it cannot enter the field of market and market failure.

To draw a clear picture of the scope of public expenditure, in addition to grasping the scientific standards, we must also pay attention to the perspective of observation. Because the financial connotation is stable, but its extension is constantly changing with the development of productive forces, changes in production methods, and changes in social and economic operating mechanisms. The same need is satisfied under a particular socio-economic operating mechanism, but not necessarily under another socio-economic operating mechanism. Therefore, from the perspective of different institutions, the same issue will lead to different conclusions. For example, expenditures for higher education under the planned economy system are within the scope of fiscal expenditures, while under the market economy system, they are no longer completely within the scope of public expenditure. Therefore, using the criteria for defining public needs and the scope of expenditure to distinguish the boundary between public affairs and other affairs, we must base ourselves on the basic point of the market economy operating mechanism in order to draw the correct conclusions.

In addition, equity and efficiency are important issues in defining the scope of public expenditure. To achieve a fair budget allocation, it must be scientific, reasonable, fair, and open, so that all departments and units have a good idea of the annual budget. Because resources are limited, their use must be done without considering efficiency. For this reason, the scope of public expenditure must be determined to meet the requirements of fairness and efficiency, to make it appropriate in scale and reasonable in structure.

According to the above standards, the government's public expenditure in the future will be mainly divided into two categories: the first category is mainly to make up for market deficiencies or expenditures in areas of market failure, such as satisfying society's defense security, social order, administration, foreign affairs Meet the needs of society; social needs for social welfare such as social basic culture, education, science and technology, health services and social security; social needs for social public facilities such as roads, bridges, post and telecommunications, natural resources, and environmental protection Needs, etc. The second type is the expenditure for correcting market deviations, such as the expenditure for adjusting the balance of the total amount and the optimization of the structure; adjusting the interest relationship between regions, industries, and individuals;