ABSTRACT
Every government activity at some stage dictates the consumption or disposition of human, financial, or material resources. As a result, the making of choices about scarce resources and the nature of these choices are central to an answer to the question of what it is that local governments do and how they go about doing it. Precisely because all activities have an economic aspect and affect current or future choices, and in order to avoid reducing all local government functions to economic ones, a distinction is drawn between those activities with economic consequences only (indirect economic functions) and those for which the making of these choices itself constitutes the government activity (direct economic functions).
