Reading

- Representatives makes decisions but the one who carry them out are the non-elected officials
- Major source of government spending in US case
o Government purchase – divert resources from private use to public sector
 i.e use of golf land in public sector & purchase of firetrucks for defense
o Transfer payment – provide income without service being requires
 Security benefit & unemployment insurance
- Market can allocate private resource without intervention (increase/decrease in price serve as a
indicator of profit) but in public sector government cannot measure in the same way coz of
o Public goods difficult to sell – cannot be sold as easily as a company building
 Profit does not mean good
o Public and private have different resource constraints
 Government resource limit depends on the total resource of society, private
depend on market in general
o Governments work as perfect monopolies – there are some services that only they can
provide and people have to pay whether or not the services provided is used or not
o Private business only need to focus on maximizing profit, government have many
different goals
- Parts of public expense is different
o Compared to private sector where resource origin and buyer is confirmed, in public
sector, who is financing what sector and who is buying the services is not confirmed
 Separate process for planning expenditure and revenue
LEC
Recap

 PM have responsibility of executive and legislative branch President only in charge of

executive
 President is elected by the people
For more information on structure, refer to lecture slides
Presidential system is defined as a separation of powers while parliamentary system is defined as
a fusion of power – executive and legislative.
Presidential systems can suffer from deadlock. WHY? Check lec recording
Parlimentary systems less likely to suffer deaklock as executive and legislative brach is controlled
by same party
Bureacracize can be dangeroius in the sense that they work in the interest of protecting their
agency and not in the interest of the people
PM can secure their seat if their party is the majority because they are more people in the
government to keep him in his seat
Semi president – France there is more power to the president
Bureacracy as a red tape
 - Current dilema bureacracy shoulf be free from political pressure as the rules but also
respond to elected officails who work in the public interest. Whertther or not elected
officicals have options and the ways to implement their policy is affected by the
burecracy
Week 5 lecture
Corrective meausre such as gambling/smoking that affects the efficiency of the system (opium)
Progression of budgetting

- Decrease in property – abolisment of slavery

- Property given to the freeman
- When white women were given sufferage
- African-American people given sufferage in 1960s – increase government size and welfare
- Johnson – alr finish industralisation time to think for the people; equity, mandotary spending
- Reagan years – New Public Management = more collaboration with the private sector
- Most nations face defits and debts – one cause is intergenerational usage of funds, the younger
generation have to pay back the debt
- Chronic deficit means debt
- Fiscal is Keynesian idea let the people spend more increase demand and supply
- Criticism against keynesian: the conequences of the policy can only be seen in the long term plus
it could affect business owners causing them to borrow from other governments
- Wagner law: size of government measured by public spending increase proportionally more than
growth of national income
o When government spend more, people will spend more, increase in collection of GST.
Hence government, thinking that they can collect more money from tax, spends more
- Government spending is also affected by the no. Of workers so when there is an increase in
workers there is also an increase in government spending
- Incrementalism means increase in budget over time? Unlikely for budget to decrease
- Public documents regarding budget is a form of communication between the government and the
public