The Public Budgeting and Finance Primer: Key Concepts In Fiscal Choice.

Author:Wagner, Richard E.
Position::Book review

Over the past generation or two, mainstream work in public finance and public economics has acquired a highly abstract and formal character. Fiscal phenomena are treated by and large as the products of some fiscal brain that optimizes some objective function. The particular form of that objective function varies across formulations, but fiscal phenomena are treated as products of some ruler's or policy maker's choices in any case. To treat fiscal outcomes in this manner brings tractability in its train which allows authors to give determinate answers to the questions they pose. That tractability has a price, however, for what is lost is recognition that fiscal processes entail complex interactions among numerous interested participants in a setting where it is doubtful that all those participants share a common objective function.

Jay Eungha Ryu's The Public Budgeting and Finance Primer brings public finance down from those abstract clouds by recognizing that behind any abstract formulation resides real people with differences in what they know and what they desire, and who must put together programs and practices that not only must be articulated theoretically but must also be managed and administered by actual people. Where modern public finance generally locates its material as a proper subset of economic theory, Ryu's text locates public finance as a multi-disciplinary field of study, centered on economics to be sure, but touching as well, and significantly so, on politics, public administration, and law. In Ryu's hands public finance is a multi-disciplinary treatment of politically organized activity as seen from a budgetary perspective. Ryu's particular perspective is American, though in developing his perspective he gives considerable attention to state and local governments, which these days is where most of the real, non-defense activities take place within the American system of government.

The book is divided into six parts of several chapters each, along with a closing chapter that covers three miscellaneous topics. Part I contains seven chapters on budgetary processes and institutions. These chapters include comparisons of executive and legislative budgeting, giving good attention to institutional differences in the execution of budgets among governments. Three chapters explore efforts to achieve budgetary control through such devices as line-item vetoes, balanced budget requirements, and limits on taxing and spending. The ways...

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