1. Public Expenditure
BSC AGRI 2
PAE
UNIT 4

2. Increasing trend of public expenditure
• - To protect society from violence and invasion
• -to protect every member of society from the
injustice or oppression of every other
member.
• - to create and maintain certain public works
and certain public institutions which can never
be in the interest of any person or group of
persons.

3. Causes of public expenditure growth
• The rising trend of public expenditure in modern times may attributed to a
multitude of causes.
• -Income elasticity and increase in Per Capita Income according to
Musgrave.
• -Welfare State Ideology and Wagner’s Law.
• -Effects of war and need for defence
• -Resource Mobilization and ability to finance
• -Inflation
• -The role of democracy and socialism
• -The Urbanization effect
• -The Rural development Effect
• -The Population Effect
• -The Planning Effect

4. Canons of Public expenditure
• The fundamental rules or principles governing
the spending policy of the government
• - Canon of benefit
• -Canon of economy
• -Canon of sanction, This suggests that no
public spending should be b made without the
approval of proper authority
• -Canon of surplus

5. Effects of public expenditure
• -Effect on consumption
• -Effect on production
• -Following Dalton, we may specify the three inter-
related effects of public expenditure on production,
as under:
• -Efficiency effect,
• -Incentive effect,
• - Allocative effect
• -Effect of public expenditure on distribution

6. SOURCE
• www.up.edu.ps/ocw/upinar/moodledata/248
/Public_Expenditure.ppt