ABSTRACT
Why are the revenues and expenditures of public finance always in a tense situation, whereas the allocative efficiency of public resources and the performance of public expenditure are pervasively low? Why does the spending level differ widely from one department to another within the same tier of government, with some having more to spend and some having less? Why are those spending departments keen to build close relationships with finance departments in order to get more resources, and budget has virtually no meaningful control over spending? Why is the finance department always seen as the focus of every contradiction, making enormous efforts without receiving any recognition in return? What are the significant factors affecting and constraining the allocation of the budget? Where on earth is the way out? In the year 1998, the budgeting officers of Hebei Provincial Finance Bureau (HPFB) experienced these problems.
