Financial relations that develop between the state and enterprises, organizations, institutions and the population are called budgetary. Specificity of these relations as part of the financial is that, firstly, they arise in the distribution process, in which the state (represented by the relevant authorities) is an indispensable participant, and, secondly, they are associated with the formation and use of a centralized fund of funds, designed to meet public needs. Budgetary relations are characterized by great diversity, since they mediate different directions of the distribution process (between sectors of the economy, spheres of public activity, branches of the national economy, territories of the country) and cover all levels of management (republican, local).
The totality of budgetary relations in the formation and use of the country's budgetary fund constitutes the concept of the state budget. By economic essence the state budget- these are monetary relations that arise between the state and legal entities and individuals regarding the redistribution of national income (partially - and national wealth) in connection with the formation and use of a budget fund intended to finance the national economy, socio-cultural events, defense needs and public administration . Thanks to the budget, the state is able to concentrate financial resources on decisive areas of economic and social development.
This category, being part of finance, is characterized by the same features that are inherent in finance in general, but at the same time has features that distinguish it from other areas and links of financial relations. Features include the following:
“direct subordination to the state, the state is the organizer of all financial relations, but in the budget its role as the main manager of the country's material and financial resources is manifested with great force. No financial plan of the country is approved as a Law by the Jogorku Kenesh, except for the state budget:
An equally important feature is its unity and a high degree of centralization. Despite the large number of budgets of various administrative-territorial units, they are all summarized in a single consolidated budget in compliance with the consistent relative subordination of lower levels to higher units.
In the state budget, as in no other division of the financial system, there is a terminological combination of two concepts, the budget as an economic category and the budget as the main financial plan.
As the main financial instrument for the distribution of the social product, the state budget has other features. If the distributive function of finance in material production and the non-productive sphere is carried out under conditions of frequent changes in the forms of value, numerous acts of sale and purchase, the distribution of the social product through the budget always occurs somewhat isolated from exchange.
The movement of value through the budget is completely separated from the movement of the material product and is of a purely cost nature. The view of the budget as an economic category was not immediately recognized.
A feature of the state budget is also an organic connection with all divisions of the financial system and other economic categories (price, wages, credit, etc.);
The state budget is a special economic form of redistributive relations associated with the separation of a part of the national income in the hands of the state and its use in order to meet the needs of the whole society and its individual state-territorial formations;
With the help of the budget, there is a redistribution of national income, less often - national wealth between sectors of the national economy, territories of the country, spheres of public activity;
The proportions of the budgetary redistribution of value, to a greater extent than in other parts of finance, are determined by the needs of expanded reproduction as a whole and by the tasks facing society at each historical stage of its development;
The area of budget distribution occupies a central place in the composition of public finances, which is due to the key position of the budget in comparison with other links.
The essence of the state budget as an economic category is realized through distributive (redistributive) and control functions. Thanks to the first, there is a concentration of funds in the hands of the state and their use in order to meet national needs; the second allows you to find out how timely and fully financial resources are at the disposal of the state, how the proportions in the distribution of budgetary funds actually add up, whether they are effectively used Features of the state budget as an economic category -; leave an imprint on the functions they perform. The content of functions, the scope and object of their action are characterized by certain specifics. Thus, the content of the distribution function of the budget is determined by the processes of redistribution of financial resources between different divisions of social production. None of the other links carries out such a multi-species (intersectoral, inter-territorial, etc.) and multi-level (republican, regional, district, city, etc.) redistribution of funds as the budget.
The scope of the distribution function is determined by the fact that almost all participants in social production enter into relations with the budget. The main object of the budget reallocated; is net income; however, this does not exclude the possibility of redistribution through the budget and part of the cost of the necessary product, sometimes national wealth.
The distribution of the social product through the budget has interrelated, but to some extent separate stages:
1) the formation of a nationwide monetary fund; 2) the creation of numerous budget funds for territorial and targeted purposes; 3) the use of the budget fund (budget expenditures).
At the first stage, there is a concentration of funds in the hands of the state by withdrawing them from business entities and citizens. On this basis, there are financial relations of the state as a recipient of funds with payers. For the most part, these relations are mandatory, but part of the funds goes to the budget on a voluntary basis. A characteristic feature of the distribution process at this stage is that the funds received by the budget are impersonal and do not yet receive a strictly defined distinction. When forming the budget fund, two concepts are used: payments to the budget and state budget revenues. These are identical concepts, since they express the same distribution relations between the state and payers. Payments to the budget are, first of all, the expenses of payers, which are a deduction from Revenues, while in the state budget these payments act as state revenues. Hence, some differences in the interests of the parties The state is interested in increasing budget revenues, but the withdrawal of funds from payers to one degree or another affects the interests of labor collectives.
State budget revenues are distinguished by unity and serve a single purpose - the satisfaction of social needs. Despite the large differences in the methods of withdrawal, the composition of payers, the terms of payment, etc., all of them are carriers of distribution relations between the state and payers. Therefore, and are a budget category. A distinctive feature of the category - state budget revenues is that they always act as the result of distribution and the object of further distribution.
At the second stage, as already mentioned, there is the formation of numerous funds for territorial and targeted purposes, i.e. the most complex distributive process of splitting the nationwide monetary fund is being carried out. At this stage, the interests of all enterprises, organizations and members of society intersect. Since each administrative-territorial unit has its own budget, it is of great importance to correctly determine the total volume of these budgets, i.e. territorial funds. Since the expenditures of a particular budget often do not coincide with the volume of revenues received locally, there is a need for additional provision of funds from a higher budget. Thus, a complex distribution process takes place, in the orbit of which all administrative-territorial divisions are located, and some of them transfer their funds, while others receive them through the budgetary mechanism. At the same time, special-purpose funds are formed in the budget and in all its divisions, designed to meet the needs of society in cash.
At the third stage budget funds are spent according to the territorial and intended purpose, i.e. there is an irrevocable transfer of budget funds in most cases within the same form of ownership, and the actual spending is carried out only by enterprises and institutions that have received budget funds To the last stage of the budget distribution process.
State budget expenditures, as well as its revenues, have dual character. On the one hand, these are state expenses, and on the other hand, irrevocable receipts of funds at the disposal of enterprises and institutions. It is this duality that indicates that state budget expenditures are not the final, but only an intermediate stage of the distribution process, which will be continued in material production and the non-productive sphere.
Budget expenditures as a budgetary category manifest themselves in different ways and are dictated by certain economic considerations. They may be in the form:
Estimated financing;
Transfer of funds to the disposal of state enterprises, where the objects of financing are only capital investments and other expenses
Grants, subsidies, subventions, categorical and equalization grants to regions
The control function lies in the fact that the budget objectively - through the formation and use of the state's fund of funds - reflects the economic processes taking place in the structural links of the economy. Thanks to this property, the budget can “signal” how financial resources come to the state from different business entities, whether the size of the state’s centralized resources corresponds to the volume of its needs, etc. The basis of the control function is the movement of budgetary resources, reflected in the relevant indicators of budget revenues and expenditure assignments.
The important role of the state budget is not limited to financing the sphere of material production.
Budgetary resources are also directed to the non-productive sphere (education, health care, culture, etc.). Financing of enterprises and institutions of the social and cultural direction is carried out at the expense of budgetary and non-budgetary funds. Budget expenditures due to the implementation of the social policy of the state are of great importance. They suppress the state to develop the system of public education, finance culture, meet the needs of citizens in medical care, improve their level of social security, and implement social protection.
Republican and local bodies of state power and administration, through budgetary relations, receive at their disposal a certain part of the redistributed national income, which is directed to strictly defined goals, depending on the division of functions between levels of government.
The redistribution of financial resources is increasingly carried out through the financial market, based on supply and demand. Therefore, the role of state financial regulation of market relations should be strengthened through systems: tax, financial sanctions To benefits. It is especially important to ensure the proper fulfillment (timely and in full) of financial obligations to the budget and extrabudgetary funds.
Currently, the budget system of the Kyrgyz Republic consists of two elements: the republican budget and local budgets
The budget system of the Kyrgyz Republic, in accordance with the state budget legislation, is based on two main principles: the unity of the budget system and the independence of budgets.
The principle of unity in its content differs from the previously existing principle: it is provided by a single legal framework, the use of a single budget classification, which was introduced on the model of the US budget classification, the unity of documentation forms with the submission of the necessary statistical and budget documentation from one level of the budget to another to compile a consolidated the country's budget. In accordance with the budget legislation, the state budget of Kyrgyzstan is the main financial plan of the state, approved by the Jogorku Kenesh, and has the status of a republican law, local budgets are approved by local authorities.
Through the state budget, financial resources are mobilized, which are necessary for their subsequent redistribution and use for the purposes of state regulation of the country's economic development and the implementation of social policy throughout Kyrgyzstan.
The preparation and execution of the budget is based on the budget classification, which identifies the target areas of state activity arising from the main functions of the state.
For investment activities 1996-1998. it was characterized by an increase in the role of enterprises' own sources of accumulation for financing their investment projects, while reducing centralized capital investments. With state support, the center of gravity shifted from non-refundable financing to budgetary lending on a repayable and paid basis. State financing of investment projects for industrial purposes was carried out on a competitive basis. the budget classification should enable economic analysis of government spending.
1. The public sector of the market economy: economic content and development trends
Modern society, as we know, consists of a number of sectors. The first sector is the state. It includes state authorities and administrations at all levels. The second sector is entrepreneurial, private. This is the sector of non-state commercial firms,
operating on the basis of market laws. The third sector is non-profit, which is a combination of state and non-state non-profit organizations of all areas of activity. Another sector is represented by households, covering all groups of the population.
The market system is ideal if all goods and services are voluntarily exchanged for money at market prices. Such a system extracts the maximum profit from existing resources without government intervention, the need for which is completely absent, since there is a free market economy. Then, according to economic theory, if such an economy is a perfectly competitive economy and if there is a complete set of markets in it, then it achieves Pareto efficiency: no one can increase their welfare without worsening the welfare of others.
So, assuming that social decisions should be based on the well-being of the individual, and that individuals know their needs best, one can assume that government intervention based on efficiency principles is not necessary.
At the same time, well-known economists, Nobel Prize winners E. Atkinson and J. Stiglitz, considering the theory of welfare and government intervention, refuted this point of view. This assumption about the effectiveness of competitive equilibrium is used as a starting point for explaining the role of the state - the economic theory of the public sector is developing, which actually substantiates the idea of finding the optimal state intervention in the market economy, we are talking about an effective state.
The theoretical substantiation of the objective necessity and economic essence of the public sector in a market economy is usually associated with the name of the American professor P. Samuelson, who became in the mid-50s. 20th century founder of the theory of the public good. From the analysis of the properties of a pure public good (indivisibility, accessibility to all citizens and provision by the state), a conclusion follows about the need to distribute financial resources in society between the public and private market sectors. Having studied market failures, in which the "invisible hand of the market" cannot act effectively due to objective circumstances, the theory of the public good proves the need for state intervention to remove the negative consequences of market mechanisms. Therefore, the regulation of the supply of public goods, on the one hand, and the achievement of optimal public spending, on the other, play a leading role here.
The first premise of public sector economics is that the state, like commercial firms and non-profit organizations, operates in a market environment. Therefore, the need for its participation in economic processes arises only when the action of the market does not ensure the optimal use of resources and the achievement of the development goals of the whole society. The state is seen as a competitor to the private
firms in the market, as a partner that produces specific goods and services (public goods) and is responsible for their supply, operates in conditions characteristic of a mixed market economy.
The second premise of the public sector economy is that the state uses mainly financial instruments (taxes, government spending, etc.) to achieve its goals. Why financial? The answer is simple: because the bodies of power and administration representing the state, unlike other market participants, have special rights or advantages - the right of coercion, and on the basis of the law. It is the state that establishes and maintains the economic order, protects the rights of other subjects of enterprises, households, non-profit organizations. In order to exercise these rights, as well as for other functions delegated by society, the state accumulates state financial resources on the basis of legal withdrawal (taxation) of a part of the income of other subjects of market relations. The conceptual task for the economy of the public sector is to determine the possibility of optimizing the forced reallocation of resources to achieve optimal parameters of economic and social efficiency.
1 See: Economics: Vvolny course. Microeconomics / World Bank Institute, Ministry of General and Vocational Education of the Russian Federation. Moscow representative office of IVB, 1999. S. 242.
2 These categories are widely studied in the works of prominent Western scientists working in the field of macroeconomic theory. See: Samuelson P.A. Economy. In 2 volumes / Per. from English. M., 1992; McConnell K.R., Eryu S.L. Economics: principles, problems and politics. M., 1992; as well as in the works of public finance theorists: Atksonson E.B., Stiglitz J.E. Lectures on the economic theory of the public sector: Textbook / Per. from English. / Ed. L.L. Lyubimov. M., 1995; Musgrave R.A., Musgrave P.B. Public Finance in Theory and Practice. N.Y.. 1959id.
In a market economy, there are a number of situations in which the free operation of market forces does not ensure the optimal use of resources. In economics, these situations have been called market failures, and the theory that studies these situations has been called the theory of market failures.
Central to the analysis of market failures is the study of public goods or public goods.
A public good is publicly available, such as national defense or law enforcement, and its consumption by one person does not exclude other consumers. Such economic characteristics make it inappropriate to charge for the consumption of publicly available public goods, so private producers have no incentive to produce them. Such public goods are called pure public goods, in contrast to pure private goods, which are competitive and excludable. Taxes are a special form of payment for pure public goods.
Between the two poles of economic goods is a huge range of mixed public goods that are excludable but non-competitive in consumption, these are the goods of common ownership and common use, for which a price can be set (roads, bridges, museums, hospitals, etc.). There are national public goods (defense capability, general accessibility of education), as well as regional, local ones - good roads, parks, etc. An example of a public good can be the introduction of innovations, the formation and use of knowledge, intelligence.
The theory of the public good is very important for understanding the possible mechanisms for resolving contradictions between the free choice of the individual and the long-term preferences of society, which cannot be resolved without government intervention.
Most public goods (mixed public goods) have the following properties: their consumption is impossible outside a limited area or outside a special category of people. In these cases, state intervention is not always necessary. Private initiatives such as "clubs" that have entry rights are often able to sufficiently reduce the cost of exclusion to make it economically possible to provide a local public good.
See: Zhiltsov E.N., Lafey J.-D. Economics of the public sector. M.,
" ■. to"; U, k and
Oversupply threshold
Amount of mixed common good
Rice. I. An example of a local common good
A classic example of a local public good is a freeway (Figure ]). Up to point E, the arrival of a new car does not reduce the amount of transport services used by other drivers. Above this threshold, another car entering the road will slow down the speed of all other road users (the graph clearly shows that the slowdown increases with each car). This decline in the quality of service can be explained by costs, measured by the amount of spending required to eliminate the congestion. Each new participant in the movement, appearing on the road after the onset of the saturation threshold, is already causing a slowdown for everyone.
It has been proven that "Pareto efficiency does not ensure that the distribution that occurs in the process of competition works in accordance with existing concepts of justice (whatever they may be)" . Since one of the main activities of the state is redistribution, it should ideally be carried out through measures that do not undermine effective property. But in practice, such measures cannot be fully implemented, and the state
See: E. B. Atshpson, J. Stiglitz. E. Lectures on the economic theory of the public sector. S. 19.
forced to use tougher, more controllable levers: taxation, social security benefits, etc.
In fact, no economy corresponds to an ideal system in which the principles of the “invisible hand” of the market operate without any difficulty. Any market economic system experiences shortcomings that inevitably lead to social diseases: severe environmental pollution, unemployment, a strong stratification of society into rich and poor. The state, the public sector, should act as a regulator of the economic system, using the whole range of measures to influence economic processes in order to “smooth out” market shortcomings (see Table 1).
The public sector of the market economy includes the public sector with all the variety of its economic categories reflecting them and instruments (budget, taxes, government spending, state property, state entrepreneurship), the local government sector (local finance, local property, etc. .). as well as the non-profit sector of the economy, since the activities of all three components are aimed at providing and providing public goods to consumers.
The non-profit sector implements the task of broadly involving the population in public life, which reflects the dynamics of social organization at all levels - local, regional, national, international - and is associated with the process of the formation of civil society. Unlike com
mercantile, third sector organizations do not exist for profit, but this does not mean that they cannot receive it *
2. Public sector finance as a resource potential
To assess the resource potential of the public sector of the economy, we single out the most important component of this potential - public sector finance, consider their share in the structure of the financial system, and try to assess the scale of public finance in modern Russia.
As you know, finances are part of economic relations, they arise in the process of formation and use of various funds of funds in the course of generating income and savings of enterprises, as well as cash incomes of the state and municipalities.
The financial system of any country, including the Russian Federation, includes, as you know, a complex of components: state and non-state financial bodies and structures, funds of financial resources of centralized and decentralized purpose, as well as a system of interconnections between them.
Public sector finances are defined as relations regarding the systemic redistribution of state, municipal finances and resources of the non-state non-profit sector of the economy, based on the contradictory relationship between the interests of the federal, sub-federal, municipal levels of government and the population in order to achieve sustainable socio-economic development of society.
The criterion that makes it possible to combine public finances into a separate subsystem is the achievement of a single goal - ensuring the production and delivery of public goods to consumers, i.e. goods of collective use with special properties, provided either by the state (pure public goods) or by the state, the market and the non-profit sector (mixed public goods), the economic characteristics of which are discussed in detail in the first part of this textbook.
Structurally, public sector finance as part of the financial system includes:
state finances (federal budget, budgets of subjects of the Federation, state borrowings, state off-budget social insurance funds);
municipal finances (local budget, local non-budgetary funds of self-government bodies);
1 See: Finance, taxes and credit: Textbook / Under the general. ed. A.M. Emelyanova., A.D. Matskulyak., B.E. Penkov. M., 2001. S. 5.
part of the finances of state and municipal unitary enterprises;
finance of the non-profit sector in terms of the implementation of tasks for the production of mixed public goods, including various extra-budgetary funds.
Public finance has significant structural
differences from the subsystem of state and municipal finance.
General government finance (state and municipal finance)
Federal budget of the Russian Federation Budgets
constituent entities of the Russian Federation
borrowings State off-budget social insurance funds Local budgets Extra-budgetary funds of bodies
finances of state and non-state non-profit organizations used in the production and provision of public goods and services.
The composition of public sector finance differs from the state and municipal finances of modern Russia, absorbing the resources of society, one way or another connected with the production and supply of various public goods.
THE CONCEPT AND BORDERS OF FINANCE OF THE SECTOR OF PUBLIC (STATE) MANAGEMENT
The concept of public finance. Public (state and municipal) finances are an integral part of the overall financial system of the country. The sphere of finance is a set of operations with income, their distribution and redistribution in the process of social reproduction. As part of the process of production, distribution and redistribution of the gross domestic product, funds of funds of business entities are formed and spent. These funds, considered in the process of their formation and movement, form the finances of economic entities, providing them with the opportunity for normal functioning. The domestic economy of countries, in accordance with the system of national accounts, is divided, as already mentioned, into five sectors: non-financial corporate and quasi-corporate enterprises; financial corporations; public administration; private non-profit organizations serving households (population); households. Each of these sectors includes corresponding business entities (institutional units).
country finances represent a set of finance sectors of the economy, taking into account their financial relations with other countries. The finances of each sector of the economy are subsystems of the country's overall financial system. The main criteria for selecting subsystems are the special role of each sector of the economy in the overall economic system of the country and the presence of its own financial base, which is formed in the process of formation of primary income and their redistribution. The totality of the finances of the institutional units of each sector, in their interaction with each other and with other sectors, forms the finances of the sectors of the economy. One of these sectors is the state (public) administration sector. At the same time, state and municipal finances are combined into a general category of public (state) finances.
The need for public finance is generated by the very fact of the existence of the state and the need for monetary support for the performance of its functions. In the most general form, the function of government bodies is to conduct state policy and fulfill state tasks through the provision of public goods (non-market goods and services) for their consumption by the population and society as a whole, as well as through the redistribution of income (transfers) and wealth. Public goods can be provided for collective or individual consumption. Collective consumption includes, for example, public administration, defense, ensuring law and order, and individual consumption includes education, social protection, etc.
The monetary funds operated by public finances are formed both at the expense of own funds and at the expense of credit resources. Own funds of the general government sector are formed mainly from taxes and deductions paid to budgets and extra-budgetary funds by enterprises, institutions and organizations belonging to all sectors and the population, as well as from income from property and the sale of market services. Sources of credit resources are direct loans from financial and credit organizations and raising funds by issuing and selling debt obligations - bonds, etc.
The system of finances of the public administration sector is formed by the totality of finances of institutional units of government, including also the finances of the municipal level of government. public finance are the finances of the general government sector. Because of this, he participates in the general circulation of income, expenses, output and the formation of assets and liabilities of the country.
The finances of the public administration sector are traditionally understood as a tool for mobilizing funds from all sectors of the economy for the implementation of the state's domestic and foreign policy. They represent a single set of financial transactions, with the help of which government bodies accumulate funds and carry out cash expenditures.
The formation of state (public) finance resources and the spending of available funds in democratic states should be carried out on the basis of citizens' preferences regarding the mandatory payments collected and the public benefits received. Therefore, the formation of budgets and other public funds is determined and approved by the representative authorities elected by the population.
The main financial fund of the country, which ensures the formation, distribution and use of a centralized fund of funds, as a prerequisite for the functioning of any state, is the state budget. Along with the budget, off-budget funds play a significant role. State off-budget funds usually have a specific purpose. In Russia, in particular, there are three social non-budgetary funds: the Pension Fund, the Social Insurance Fund and the Compulsory Medical Insurance Fund.
The budget and off-budget funds are the instruments by which the redistribution of income and, accordingly, resources between sectors of the economy, types of activities, territories, economic entities, certain social groups of the population, etc. is carried out.
In federal states, to which Russia belongs, depending on the levels of government, the budgets of government bodies are divided into finances of the central government, finances of regional governments and local (municipal) finances. State off-budget funds can also exist at various levels of government.
Carrying out a redistributive function through the budget, the state has a regulatory impact on the economy, promoting the development of certain types of activities and territories and restraining others, as well as on social development, ensuring the availability of basic public goods for the population and somewhat equalizing the income level of various social groups of the population.
Until recently, finance was considered mainly from the perspective of the formation and expenditure of monetary resources of government bodies and ensuring their solvency. Cash generating and spending transactions include monetary transactions in which one institutional unit makes a payment or incurs a liability denominated in monetary terms and another institutional unit receives a payment or other asset also denominated in monetary units. . Such transactions include, for example, the purchase by the government of goods and services paid for in cash, the remuneration of civil servants, and the payment of social benefits. All other transactions are treated as non-monetary. Examples include barter transactions and in-kind transfers.
However, cash flows- this is only an integral part of all resource flows that business entities deal with. Therefore, they must be considered in conjunction with all other flows as the most important factor influencing the value of assets. In recent years, new aspects of financial relations have attracted more and more attention. A new understanding of public finance is emerging. The increasing complexity of developing and evaluating the effectiveness of public policy has led to the refusal to consider finance only as a category that characterizes the movement of funds. The need to reflect the flow of all resources in public finances, draw up balance sheets of public assets and liabilities, and assess the value of property owned by the state was recognized. This entailed the need to integrate all resource flows that governments deal with and build a system of public finances that links the net value of state property at the beginning of any period with the flows of funds during the planning period and the value of this property at the end of the period . The scale of the resources that the state manages and the increase in their share in the total volume of the country's resources have led to an increase in the influence of public finances on the socio-economic development of the country. In this regard, the problems of efficient use of public financial resources have become more acute.
In this regard, all countries are reforming the public finance system based on the recommendations of the International Monetary Fund adopted in 2001. The new system should ensure the identification, measurement, monitoring and evaluation of the impact on the economy of government economic policies and other types of economic activity. The management of these operations should provide for the long-term sustainability of financial and economic activities. In this regard, the International Monetary Fund found it expedient to abandon the balancing of receipts and expenditures of only cash as the central link in the financial system and to link the movement of pure cash flows with the movement of all assets owned by the state.
According to the new interpretation of public finance, they are not only a tool for the formation and spending of monetary resources, but also a tool that ensures the formation of all assets and liabilities of government bodies, including non-financial assets and liabilities.
Thus, it is taken into account that, ultimately, the sustainability of public finances is determined not only by solvency, but even more by the net worth state assets, the value of the property it owns, including non-financial assets (fixed capital, etc.).
When the state sells any property, for example, a building, land, valuables, it receives money, which is considered as budget revenue. In the case of the purchase of property, the costs of it are considered as budget expenses. At the same time, the value of the change in assets is not reflected anywhere. Meanwhile, the purchase or sale of property by the state does not change its net income or equity. Only the form of its assets changes: in the case of the sale of property, cash increases, and the fixed capital of the state decreases, in the case of a purchase, vice versa. This situation creates incentives for the sale of land, the leasing of land rich in minerals, since the incoming funds are considered as income. In addition, incentives are created to reduce investment, including in the development of human capital, since the funds spent on this are considered as expenses, an increase in the state's own capital, by taking schools, hospitals and other property into the balance is not considered.
If a corporation performs the same transaction, this is reflected in the capital account. In the case of the acquisition of property by a corporation, the purchase costs are not considered as current expenses, but as investments. The acquisition of property is not reflected in net income, and the capital of the company increases. There is a need to introduce a capital account into the budget. Accounting for assets and liabilities should reflect both tangible and intangible assets. This will lead to greater prudence in economic policy. The flow of funds in and out of government should lead to an increase in the value of public property.
The implementation of the new principles in all countries requires many years, including preparatory and transitional periods. In the process of reform, it is necessary to ensure not only a stable balance of the budget, but also the transformation of the public administration system. The envisaged changes in methods and procedures require practical testing and testing. The accelerated implementation of the new system may lead to a weakening of financial discipline and an unjustified complication of budget administration.
The boundaries of the finance sector of public (public) administration. The definition of public finance is related primarily to the definition of the boundaries of the public administration sector, i.e. sector of the economy, the finances of which are subject to consideration, and its delimitation from other sectors of the economy. The boundaries of the sphere of public finance are determined by the range of institutional units related to public administration.
The state administration system of the country is formed as a result of political processes of state authorities and their structures, endowed with a monopoly right to power within a given territory or its parts. Accordingly, the totality of all public institutional management units operating in the country forms the public administration sector. The public administration sector includes state and municipal authorities and non-profit organizations owned or controlled by them.
From a functional point of view, the sector of state (public) administration is determined by the tasks and functions assigned to individual units of this sector. This is the provision of non-market services, the implementation of the redistribution of income and property, and the implementation of government tasks. State governing bodies perform their functions not for the purpose of extracting financial or other commercial benefits.
General government finance should be distinguished from public sector finance as a broader concept that includes the general government sector and public non-financial and financial institutions. This is due to the fact that non-financial organizations (state industrial and other enterprises) perform functions related to the production and sale of goods and services, and state financial organizations (the Central Bank and other state financial and credit organizations) perform functions similar to those of the financial sector of the economy, and are part of it. The functions of the general government sector are fundamentally different. These are the provision of public goods (the provision of non-market services to the population), the redistribution of income and property, and the fulfillment of state tasks.
The separation of public finances from the finances of other sectors of the economy is predetermined by the need to distinguish between the public sector and the public administration sector.
The public sector is a broader concept than the public administration sector. It stands out in terms of property owned or controlled by the state. Along with public administration, whose activities are aimed at the implementation of society as a whole, it performs a number of other functions related to the production and sale of goods and services, as well as functions similar to those of the financial sector of the economy. The presence of such activities raises the problem of distinguishing between the operations of the general government sector and other sectors of the economy. There is a need to decide whether such activities are part of the operations of the general government sector, or belong to some other sector of the economy. The question of the distinction between the general government sector and other activities of enterprises and organizations belonging to the public sector arises when considering any type of industrial or commercial activity.
The problem is related to the fact that, in addition to dividing the economy into economic sectors, there is also a division of business entities by ownership. Enterprises and financial institutions can be either privately owned or state-owned or controlled by the state. In the latter cases, according to the system of national accounts, they belong to the public sector, but are not considered as government bodies and, accordingly, their finances are not government finances. When broken down by sector of the economy, such units belong respectively to the non-financial corporate enterprise sector or form part of the financial institutions sector. The criterion is the main function of government bodies and public institutions - the provision of non-market services, which differ from other sectors in their goals, results and sources of funding. To consider public finance, it is important to highlight those financial transactions that are related to the performance of the state of its main function.
Separation of the finances of the public administration sector from the financial sector of the economy. When shaping public finance, a clear distinction must be made between the sectors of government and financial institutions. Financial institutions may be owned or controlled by governments and accept transferable demand deposits, time and savings deposits, act as monetary authorities, incur financial liabilities and acquire financial assets in the financial market. However, institutions or activities of this kind do not belong to public finance. The exclusion of such financial functions from the government is necessary for a more complete and clear presentation of the results of the financial activities of governments, expressed in the form of their transactions with the financial system - so as not to confuse the two sectors.
Distinguishing the public finance system from monetary regulation makes it possible to correctly assess the role of the general government sector in regulating monetary circulation and the balance of payments, as well as to distinguish between financing the deficit (or using the surplus) of the balance of payments from financing the deficit (or using the surplus) of the state budget . Therefore, the functions of monetary authorities, performed by both the central bank and government agencies, are considered as performed by the financial sector of the economy. Functions of this kind are monetary regulation, management of international reserves, acceptance of transferable demand deposits, acceptance of term and savings deposits, simultaneous incurring of liabilities and acquisition of financial assets in the capital market. All transactions related to the performance of such functions are not included in the transactions of the general government sector and must be recorded in the transactions of the financial institutions sector. At the same time, since central (national) banks and some other financial and credit institutions are the property of the state, they are used by the authorities to conduct state financial and monetary policy. The financial institutions sector includes the following subsectors: monetary authorities, commercial banks, deposit banks, insurance companies, non-state pension funds, and other financial institutions. At the same time, the state pension and other state off-budget social funds of Russia belong to the public administration sector.
Insurance companies and pension funds are some financial institutions involved in mobilizing the savings of the population and paying insurance amounts in accordance with the contract and investing temporarily free cash in various assets. Insurance companies include corporate organizations and mutual funds whose main function is to provide various types of insurance (life insurance, accident insurance, sickness insurance, fire insurance, accident insurance, etc.). Insurance companies are not included in the general government sector. However, social insurance funds, which come from mandatory contributions from employees and/or employers, which are created, controlled and financed by the state and are distributed to the entire country (as is the case in Russia) or large groups of the population, belong to the general government sector. pension funds those arising on the basis of voluntary agreements between employees and employers, and not as a result of decisions of public authorities and functioning on the basis of independent funds, are considered as functioning in the financial sector. They are independent organizations operating in the capital market. At the same time, the pension funds of civil servants, whose funds are invested in government securities, belong to the general government sector. In Russia, a state pension fund serving the entire population is also classified as public administration, and its financial operations as public finance.
Separation of the general government sector from the non-financial public sector. Corporate and quasi-corporate state-owned enterprises include enterprises that are owned or controlled by the government. They operate on a commercial basis, selling market goods and services to other sectors of the economy in large volumes and at market prices. Public authorities are considered to be the owners of a given enterprise if they own all or more than half of its shares or other types of capital participation. The criteria for determining who exactly controls the enterprise are more complex. Control includes policy making, management and leadership. Even if the government does not own most of the capital of an enterprise, but they control its activities to a large extent, the enterprise is considered a state-owned enterprise. In Russia in 2006 there were 160,000 state-owned enterprises.
The identification of non-financial public enterprises is important for several reasons, most notably to define the boundaries of the general government sector from which they should be excluded and to define the boundaries of the non-financial public sector.
State enterprises can be used to implement the most important state programs. An important type of state and municipal spending is the cost of investment in newly created or operating enterprises, carried out to a large extent on an equity basis with private business. These costs are an integral part of economic policy that affects the structure and technological level of production. The total funding needs of the general government and non-financial state enterprises and their ability to meet them is an important indicator of the total volume of operations they carry out and the impact they have on the state of the country's monetary system. The financial transactions and account balances of such public enterprises are not included in general government finance because their nature of activities is different from that of the sector and their production and financing objectives are not based on for public policy reasons.
Those enterprises and organizations that do not sell goods and services to the population on a large scale, but are engaged in the performance of regulatory functions (for example, licensing sellers) should not be included in the sector of non-financial state enterprises. If the main funding or control over the activities of such units belongs to public authorities, then they should be included in the general government sector.
So-called departmental state enterprises should be distinguished from corporate and quasi-corporate state enterprises. Departmental enterprises include enterprises and organizations operating within the general government sector and engaged in commercial or industrial activities on a small scale. Examples of departmental enterprises, the main activity of which is the sale of goods and services outside this sector on a small scale, are catering services in the buildings of government organizations, organizations engaged in rental housing for government employees. The provision of paid services to other sectors includes the issuance of passports, driver's licenses, court fees, as ancillary activities in relation to other government functions include the sale of seeds or breeding animals by experimental farms, the sale of museum postcards by state museums, the sale of products of vocational schools. There may be a sale of goods and services by government agencies in the form of tuition fees, fees for visiting parks and museums, etc. Examples of departmental enterprises of an auxiliary type are military enterprises engaged in logistics, sales of military equipment, and repair shops.
Attribution to the public administration sector of non-profit organizations is carried out depending on who finances and controls them. The general government sector includes non-profit institutions wholly or mostly funded and controlled by government authorities that may be involved in their creation. State funding may take the form of membership dues or other transfers, and state control may consist in the organization of the effective operation of such organizations. Non-profit organizations that exist on private voluntary contributions and are not controlled by the state belong to the sector of non-profit organizations serving households. Distinction problems may concern hospitals, educational institutions, etc.
IN in accordance with the above, to state (public) finances include the finances of the federal budget, the budgets of the constituent entities of the Federation, the budgets of municipal authorities and state and municipal non-budgetary social funds. The central place in public finance belongs to budgets. At the same time, a significant role is played by various state autonomous funds at the federal and regional levels. As a rule, these funds accumulate resources for solving major problems that require special attention of public authorities. The sources of funds of such funds are targeted taxes and fees, transfers of funds from the budget, capitalization of income and loans. In France and Japan, about half of government spending is financed by such funds, in the UK - a third. The funds are targeted and intended to finance various social, economic, scientific, technical, credit and other problems.
Education and expenditure of financial resources of the public sector. As already noted, public sector finance is a complex system. In a consolidated form, the formation and use of financial resources of state and municipal governments can be characterized on the basis of the system of national accounts. In Russia, the formation and use of financial resources of government bodies is characterized by the data in Table. 14.1.
Table 14.1
Generation, distribution and use of government sector revenues in 2005 and 2011* (billion rubles)
|
2005 in % of GDP |
2011 in % of GDP |
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Income generation |
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Gross value added (GVA) generated in the general government sector |
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Wages of employees |
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Other net taxes on production |
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Sector Gross Profit (5 = 2 - 3 - 4) |
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Production taxes |
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subsidies for production |
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Property income received |
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Property income transferred |
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Balance of primary income (10 = 5 + 6-7 + 8-9) |
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Current transfers received (current taxes on income, property, social security contributions and others) |
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Current transfers transferred (social benefits in cash and others) |
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Gross disposable income (13=10+ 11- 12) |
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Final consumption expenditure (14 =15+ 16) |
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Individual goods and services |
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Collective Services |
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Gross saving |
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Capital transfers received |
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Capital transfers transferred |
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Gross saving including balance of capital transfers (20 = 17 + 18 - 19) |
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Gross capital formation |
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Net acquisition of non-produced non-financial assets |
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Net lending (+), net borrowing (-) 23 = 20-21-22 |
National accounts of Russia in 2005-2012 M.: FSGS, 2013. S. 56.188.
“Other taxes on production” refers to taxes paid for the use of factors of production (land, capital goods, labor) or for the right to carry out certain activities.
In the public administration sector, as in other sectors of the economy, gross value added is created, employees are paid and certain types of taxes are paid. The result is the gross profit of the general government sector. It characterizes the profit (loss) before taking into account income from property.
Balance of primary income. Primary incomes of economic sectors reflect their formation from the first recipients, including in the public administration sector. In the process of redistribution, the income (gross profit) of the public sector is increased by taxes on production. Taxes on production and imports in the SNA are treated as the primary revenues of the state, considered as a participant in the reproduction process, providing the necessary conditions for its implementation. Production taxes are understood to mean taxes on products and "other taxes on production", i.e. indirect taxes levied depending on the amount of products produced (VAT, sales tax, excises, customs duties, etc.). In relation to GDP, they amounted to 20.1% in 2011.
In the process of generating primary income, governments receive payments for the provision of their property (financial and non-produced assets) on a returnable and reimbursable basis to users of other sectors of the domestic economy and foreign economic entities and pay money for the use of property owned by institutional units of other sectors and foreign business entities. Such payments include interest, dividends, rent for land and other natural resources, reinvested income from foreign direct investment, and some others. The balance of funds received and paid for the provision of property is in favor of the general government sector. In 2005, receipts exceeded payments by 131 billion rubles, in 2011 - by 349 billion rubles. As a result, the balance of primary income in 2011 amounted to 20.6%.
Gross disposable income. The disposable income of the public sector sector is income that can be used for consumption and saving purposes without reducing cash, selling assets or increasing liabilities to other sectors. They are formed as a result of the redistribution of income through transfers in cash. Gross disposable income in relation to GDP in 2002 was 24.8%, and in 2005 - 31.2%, and in 2011 - 27.1%. With more than 4% of the gross domestic product, the state is the largest economic entity in the country and has a huge impact on its socio-economic development.
The disposable income of the general government sector due to the balance of received and paid transfers in 2005 exceeded the balance of primary income by 49.5%, and in 2011 - by 31.9%.
Allocation of gross disposable income of the public sector to final consumption and savings. Government spending on final consumption in current prices in 2011 amounted to 18.0% of GDP, including 8.6% for individual goods and services, and 9.4% for collective goods. Gross savings over this period increased 1.8 times. The share of final consumption in gross disposable income increased from 54.0% to 66.3%. Accordingly, the share of savings has decreased.
Gross saving and its use. According to the logic of reproduction, gross saving should be used for capital accumulation. The use of general government savings for gross capital formation in the economy consists of two streams. One of them is capital transfers to other sectors, the second is gross capital formation in the general government sector itself.
In 2011, capital transfers from the public sector of the economy to other sectors of the economy amounted to 1.6 trillion rubles. Accordingly, 31.4% of the sector's gross savings were directed to capital transfers to the domestic economy. For the purpose of accumulation in the public sector itself (for the construction of housing, hospitals, clinics, schools, other social facilities, as well as other investment projects), 1,212 billion rubles were used. or 23.8% savings in the general government sector.
The amount of funds available to the general government sector for gross capital formation in this sector (savings, taking into account the balance of capital transfers) amounted to 3,496 billion rubles in 2011. against 2099 billion rubles. in 2005. The increase in current prices was 1.7 times. In fact, gross capital formation in this sector increased 1.5 times and amounted to 1,212 billion rubles.
At the same time, the amount of savings not used for accumulation increased sharply. For six years they have grown by 1 trillion rubles. and accounted for 46% of savings in the public administration sector. This sector concentrates 3/4 of the total amount of savings not used for accumulation in the economy as a whole. These funds were used mainly for the early repayment of external public debt, the formation of reserve funds and their use during the 2009 crisis.
In Russia, the practice of investing reserve funds in securities of Western countries has developed. These financial instruments are considered reliable, the interest income on them is no more than 4% per annum. Meanwhile, the average return on production assets in the Russian economy in 2005-2011. was 9%. Of course, investments in reliable and highly liquid securities of foreign countries are necessary in case of unforeseen situations. However, a reasonable limit should not be crossed. Accumulated reserve funds at the beginning of 2009 amounted to 6.6 trillion rubles, and at the beginning of 2011 - 3.5 trillion rubles. The use of reserves helped keep the banking system functioning normally and supported social indicators, but failed to prevent a sharp drop in production. At the same time, more than 3 trillion rubles. were not used. At the beginning of 2012, the total amount of Russia's international reserves amounted to $499 billion, including reserve funds of $112 billion. This is more than twice the annual import spending in 2011. Such reserves are also excessive to ensure the stability of the ruble . In Russia, international reserves at the beginning of 2012 amounted to 2/3 of the M2 money supply. Meanwhile, in developed countries, the volume of reserves is many times less than the volume of the monetary base. We need to look for more profitable ways to use financial reserves.
More profitable in economic terms is the use of funds for the development of the national economy, increasing the volume and improving the structure of public goods. If these funds were invested in the economy, then the projects implemented on their basis would increase the country's GDP and bring profit to the investor. Investing in enterprises on a commercial basis allows you to solve several problems. The state receives a stable source of funds for the budget with a rate of return that exceeds the return on investments in foreign securities. An increase in investment in the economy through public funds allows to accelerate economic growth, promotes the modernization of production, has a significant impact on the restructuring of the economy and the development of high-tech, knowledge-intensive industries, and frees the country from the danger of falling prices for raw materials and rising prices for imported goods.
The excess of the total value of financial resources over the resources that were actually used for gross capital formation is Russia's net lending to the economies of other countries. For the economy as a whole, “net lending and net borrowing” reflects the balance of relations with other countries in providing and receiving financial resources on a reimbursable and repayable basis. They are defined as the difference between the total amount of resources for financing capital gains and the total amount of gross capital formation and the cost of acquiring land, natural resources and non-produced intangible assets. This value reflects the difference between the total amount of financial assets acquired by residents of a given country and the total amount of financial liabilities assumed by them in relation to residents of other countries.
- Hereinafter, unless otherwise specifically stated, the term "public finances" refers to the finances of the state and municipal levels of government.
- Glazyev S. Budget 2007: the same socio-economic meaning // Russian Economic Journal. 2006. No. 9-10. S. 24.
Public finance provides for both the current internal needs of the general government (for example, the wages of civil servants) and the performance of its functions by providing non-market goods and services for their collective or individual consumption by the population, as well as through the redistribution of income and wealth. Public finance serves the state as a system of authorities that manage the life of society. They are not only a tool for the formation and spending of monetary resources, ensuring the provision of public goods, but also a tool that ensures the formation of all assets and liabilities of government bodies, including non-financial assets and liabilities. Flows of funds (primarily financial resources) incoming to and out of government bodies should lead to an increase in the value of state property.
Considering that the state performs its functions to ensure the collective or individual consumption of public goods by households and interacts with economic entities, public finance reflects the relationship between the state, on the one hand, and legal entities and households, on the other, regarding mandatory payments in cash. state funds and the use of these funds. Taxpayers are interested in the efficient use of financial resources, but understand them differently. This gives rise to complex problems associated with differences in the interests of certain social groups of the population, contradictions between groups of entrepreneurs and differences in the understanding of efficiency.
Considering public sector finance it is important to note that the functions of the state are realized through financial resources not only in the sphere of economic and social development. In political terms, public finances are a factor in the reproduction and development of existing institutions and structures of public administration, the established traditions of the state system. Therefore, consideration of the budget and other state financial funds is always the subject of intense political struggle in parliaments and other representative institutions. Political parties, coming to power, realize their goals through the formation and approval of financial plans in accordance with their strategic goals in the field of economic and social policy, take control of the apparatus of financial bodies and practically implement budgetary policy.
The public sector of the economy includes, as noted above, enterprises owned or controlled by the state. These enterprises have their own financial resources and are financially responsible for their activities. Their financial resources are not pooled with state financial funds. At the same time, they pay taxes and can receive government subsidies, loans and other types of government financial support.
The finances of enterprises are a means of forming their monetary resources in order to carry out their economic activities. They provide a set of operations for the receipt, distribution and use of funds and other financial instruments by enterprises in the process of production and sale of goods and services. Financial transactions are carried out in order to organize cash flows that meet the needs of enterprises in the formation and expenditure of funds, and the funds generated and spent by the enterprise constitute its monetary resources. Enterprises, carrying out their activities, interact with other business entities: spheres of real production, enterprises of the financial sector of the economy (banks, insurance companies, etc.), public authorities (paying taxes, receiving subsidies, etc.) and households. Since this interaction is associated with cash flows, finance reflects the relationship of enterprises with other subjects of economic life regarding cash flows in the process of production and sale of products, the formation of their own and attracting external sources of funds, their distribution and spending. The result of this interaction is the mutual provision of financial resources, which provides each sector of the economy with the opportunity to implement its functions.
With the help of financial resources, enterprises acquire all the factors of production necessary for the functioning. Thanks to this, they perform two main functions: they ensure the current financial and economic activities and the development of production potential.
The inclusion of state-controlled non-financial corporations in the public sector makes it possible to more fully take into account the impact of government bodies on the country's economic life, budgetary and tax policy. The overall funding needs of the public sector, including both the general government and enterprises owned and controlled by them, and the ability to meet it, are important indicators of the total volume of operations they carry out and the impact that the state has on the economy. At the same time, it should be borne in mind that the sectors of the economy are distinguished according to the criterion of the functions performed, and the allocation of the public sector is made on the basis of the criterion of state ownership and/or control over the activities of institutional units. According to their functional role in the economy, enterprises owned and controlled by the state are classified as non-financial enterprises or financial institutions. The state budget is formed only for the general government sector, and the financial activities of state-owned and controlled enterprises are not included in it.
Public Sector Financial Resources at a Glance
The financial resources of the public sector are formed mainly from taxes and deductions paid to the budgets and non-budgetary funds by enterprises and the population, as well as from income from property and the sale of market services. Enterprises owned or controlled by the state have their own financial resources and are financially responsible for their activities. Their financial resources are not pooled with state financial funds.federal state autonomous
educational institution
higher professional education
"SIBERIAN FEDERAL UNIVERSITY"
Institute of Economics, Management and Nature Management
Content
Introduction
- The structure of the public sector of the economy.
- 1.1 Functions of the public sector
- The concept of a public good, its main properties
Public sector and public finance in the public sector
- Public Finance Functions
Introduction
In the 20th century, a mixed economy emerged and grew. This definition suggests that it is a combination of various tools for allocating scarce resources between competing alternative targets. On the one hand, there is such a social instrument as the market, which, through the "invisible" driving force of competition, uses prices to allocate land, labor, capital, and firms in the production of final consumer goods. On the other hand, along with market forces, there are other mechanisms for the allocation of resources, which can generally be characterized as non-market. The most important among them is the activity of the public sector represented by the state.
The state as a specific sector of the economy is characterized by a certain resource potential, various technologies, relationships between the population and organizations, mechanisms for preparing, making and implementing decisions.
The public sector covers that part of the national economy for which the government is responsible. Economists study the activities of the public sector because government decisions affect the lives of people and organizations. The most tangible impact comes from decisions related to public spending, taxes, and various business rules. The well-being of society depends on these decisions.
- The structure of the public sector of the economy.
In addition to these institutions, the public sector in the broad sense of the word includes non-governmental non-profit organizations. The sector of non-profit organizations, which has received great development in leading foreign countries, is an important element of civil society. These structures operate in the field of market failures and are not focused on making a profit. The goals and objectives of their activities are fixed in the charter. Non-profit organizations can make a profit, but it is directed solely to achieve statutory goals. An important difference between non-profit organizations and state organizations is that they are created on a voluntary basis and function independently. They are more open and responsible to the consumers of their services. In some cases, some of the regulatory functions traditionally performed by the state may be transferred to non-profit organizations.
The public sector is not only a set of state-owned enterprises and organizations owned by the state, but also money. In this regard, public finance plays a key role among the components of the public sector: the state budget, its revenues and expenditures.
The public sector is such an area of the economy or part of the economic space, where the following specific conditions are determined in the aggregate:
- the market does not operate or partially operates, therefore, the non-market way of coordinating economic activity, the non-market type of organization of the exchange of activities prevails;
- not private, but public goods are produced, distributed and consumed;
- economic balance between the supply and demand of the public good is carried out by the state, local governments and voluntary public organizations with the help of relevant social institutions and budgetary and financial policy.
Unlike the market sector, the public sector deals with public goods, which for the most part are not subject to sale and purchase. In cases where there is a commercial transaction for a public good, it is not considered as the main motive for the activities of public organizations. In this regard, public sector organizations are called non-profit. Since the activity of the state occupies a dominant place in the public sector, it is often called the public sector of the economy. The structure of the public sector is heterogeneous and includes three sub-sectors: state, voluntary-public, mixed. On the one hand, the mixed sector occupies an intermediate position between the public and market sectors, on the other hand, there is an adjacent zone within the public sector between the state and voluntary public sub-sectors.
- Public Sector Functions
The market mechanism cannot fulfill all those functions of the national economy, which are designed to ensure an efficient and fair distribution of resources. Let us name the main functions for which the public sector exists.
Maintain competition. The price system leads to an efficient allocation of resources only if there is competition in both the resource market and the market for finished goods. This means that it is necessary to create the most favorable conditions for firms to open production, so that firms have complete information about prices and opportunities for profitable activities. In order to maintain competition and protect against the possible power of monopolies, the government can establish special rules for doing business, use such means as taxes and subsidies.
To ensure the supply of goods, which is not carried out in the required proportions by the private sector. Even if perfectly competitive markets operate, there are certain types of goods whose supply in satisfactory quantities cannot be guaranteed by private firms. For example, if natural monopolies were entirely in the hands of the private sector, then it would be impossible to guarantee the supply of the population with water, gas, and electricity.
Solve problems generated by external factors. The private sector does not take sufficient measures on its own initiative to deal with factors such as noise or pollution. It does not fully take into account the harmful effects of its productions on other members of society or on future generations.
Protect the rights of sellers and buyers. The private sector does not protect the rights of sellers and buyers and does not establish appropriate rules for interaction between them.
Distribute income and wealth. Achieving the highest achievable level of welfare of society is the task of the government. To solve this problem, it can make decisions on the fair distribution of income and wealth.
Contribute to the achievement of macroeconomic goals. Government intervention in the market economy is also required in cases where the functioning of the market can lead to a high level of unemployment, unacceptable inflation, and disruption of the country's balance of payments.
The main task of the government is to achieve the maximum level of public welfare. To solve this problem, the government must influence the allocation of resources in different sectors of the economy and the distribution of resources among people.The totality of resources at the direct disposal of the state forms the public sector of the economy.
- The concept of a public good, its main properties
The main area of activity of the public sector is related to public goods. The concept of the public good was put forward in 1954 by the American professor P. Samuelson and subsequently developed by his compatriot professor R. Musgraif, who proposed the concept of a socially significant good (“deserved good”). In accordance with the concept of a public good, it has two main properties (criteria) that allow it to be distinguished from an alternative private good - non-rivalry and non-excludability.
Non-rivalry (compatibility, non-selectivity, non-rivalry) of a public good means that its consumption by one person does not exclude consumption by another person, since this good is consumed jointly. The consumption and use of a public good by one person does not worsen the situation with the consumption and use of other people, does not prevent their use and consumption. A typical example of non-competitiveness, joint consumption is national defense, whose services, as a public good, are used by the entire population of the country, including newborns.
The non-excludability (indivisibility) of public goods means that the consumption of goods by one citizen does not exclude other citizens from the consumption. Distinguish between the technical impossibility and economic inexpediency of exclusion from the consumption of public goods. If a public good is absolutely (technically) indivisible, such as national defense, public administration, then it is practically impossible for it to be excluded. If the costs of achieving exclusivity of the public good are too high, i.e. control over the admission of people to the public good is associated with huge costs, then exclusion is not economically justified.
For example, a public amusement park can be geographically isolated, guarded and provided with park services on a fee basis, which will require some costs to be recovered from the cost of admission tickets. But in this case, part of the population, due to its low solvency, will be excluded from the number of consumers of this good. Therefore, in order to ensure equal access to the services of a public park, as a public good, admission to it is made free of charge, and the costs of its maintenance are reimbursed by local taxes, fees, and charity. Alternative criteria, such as competitiveness and non-competitiveness, excludability and non-excludability, make it possible to differentiate between private and pure public goods (Figure 1.1).
Rice. 1.1. Grouping public goods
- Public sector and public finance in the public sector
etc.................
