Publication: Participation in Public Expenditure Systems : Participation in Public Expenditure Systems
Date
2003-03
ISSN
Published
2003-03
Author(s)
World Bank
Abstract
The mainstream public economics
literature makes the case that government intervention ought
to be considered in two instances, i) when market failures
occur because of externalities, public good properties,
incomplete information, and lack of competition, or ii) when
market activities worsen distribution of income. After
establishing at least one of these, the government chooses
among a range of instruments to redress the resultant
allocative as well as productive inefficiency. The
instruments include regulation, tax or subsidy redressal,
and public-funded private provisioning. In developing
countries where absolute poverty, often rural and agrobased,
is the biggest development challenge, provision of basic
services like primary education and health, infrastructure,
income generating and employment activities warrants state
involvement for reasons stated. Because public spending is
financed by domestic and international taxpayers (in the
form of development credit), efficacy of public spending is
not only important from a development effectiveness lens,
but also because of accountability to the financiers of
public spending which includes the poor who pay indirect taxes.
Citation
“World Bank. 2003. Participation in Public Expenditure Systems : Participation in Public
Expenditure Systems. Social Development Notes; No. 69. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/4a8d7352-fc6a-5f35-9f47-819c922cfd9a License: CC BY 3.0 IGO.”