ABSTRACT
The public treasury can be used in many ways to implement public policy. This chapter identifies different types of treasure tools and illustrates how they are used by governments to achieve policy objectives, drawing examples from different fields. It begins by discussing the general nature of economic policy tools and their inherent assumptions about the behavioral motivations of target groups. Economic policy tools are rooted in the state’s legitimate authority to tax citizens and spend the collective treasury in the public interest. Economic policy tools are favored by governments because of their targeting precision. Direct program spending involves the use of public funds to produce and maintain public goods. Grants and subsidies are payments made from governments to individuals, companies, or other governments to achieve a public policy objective.
