ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book explores the operational characteristics of public expenditures as expressed in program budgeting and benefit-cost analysis. It introduces the complexities that are ever-present in a system of fiscal federalism. The book examines both the methodology and the major empirical findings of "positive theory", that is, the determination of public expenditure outcomes and the measurement of input-output relationships. The economic objectives of the public sector are conventionally described under four headings namely: the efficient allocation of resources, the stabilization of economic activity, an equitable distribution of income, and the promotion of economic growth. Government activities are conducted in three reasonably distinct organizational forms — general government, public enterprise, and trust funds. The principal instrumentality that attempts to impose a sense of order on the multiplicity of organizational forms is the government's budget.
