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Public finance

In this research we'll talk about public finance and discus the definition of public

finance through the opinions of some authors and the ages of public finance, also

well discus the effect of public finance in government and people and how the

government use the public finance.

At the beginning We all know that government needs money like individual to

provide goods and services for the people who lives in their country, But the

difference between govern and people is that the government gets its money mainly

from taxes or funds.

The term of public finance start in the last of middle ages when the expenditure in the

country is exceeds the revenue that they have or collect, so all country start to

charging common cost in all of people. The aim of the public finance science was to

provide the necessary revenues to feed the state's expenses. However, this view

changed to public finance as a result of contemporary reality and as a result of the

new concept of the role played by the state in social and economic affairs, also there

is a relationship between the science of public finance and other science like legal

,political and economic science Because public finance has become the main means

on which economic policy depends on the implementation of public sector projects,

and the state has found in fiscal policy a way to implement its policy and achieve

justice and equality


In the first well talk about definition of public finance from some author opinions

1-Public finance deals with the raising and spending with government fund.(Plehn,

1902)

2-Public finance is the study of the role of government in the economy its defined

around four question : when should governments intervene? How should government

intervene? What is the impact of government intervention in the economy? And why

do governments intervene in the way that they do? (Gruber, 2005)

3-Public finance is the study of how government taxes and expenditures affect the

economy, and how these government programs should be designed.(gelber,2011)

4- Collection of taxes from those who benefit from the provision of public goods by

the government, and the use of those tax funds toward production and distribution of

the public goods.(Anonymous)

Therefore, we conclude that public finance is related to the revenues and the methods

of collection by governments, whether through taxation or through borrowing. It also

relates to government expenditures and expenditure methods in a manner that

guarantees the provision of goods and services to citizens and the role of governments

in preparing plans and projects to implement their policies on the ground


2-ages of public finance.

The concept of public finance in the past was not the same as the current concept. The

ancient kings used the concept of public finance to spend on themselves and those

.who sacrificed them and not to serve the state and the people.

And then some writers like Aristotle, for example, who appeared to talk about state

finances, and also included some of the old covenants after the rules on taxes and

methods of collection and its relationship with the revenues of the state.

In the Middle Ages, the state did not have any involvement in financial affairs and

especially in Europe. The church was mainly responsible for the management of

funds and collecting them in the state, so that the government would disappear its role

and existence completely. When Islam come, the financial basis was based on the

Sunnah and the Holy Quran. There was a money house for Muslims to record the

public expenditure of the state and state revenue.

The contemporary concept of public finance emerged after the Industrial Revolution

in France and England and began to be the subject of books and books such as the

book of the revolution of nations to Adam Smith and the spirit of the laws of

Montesquieu.

Then after World War I and after the Great Depression in 1929 there was a shift in the

science of public finance led to the emergence of works that worked to resolve this

crisis and resolve the financial crises facing countries.


3-effect of public finance on the economic growth and inequality (Johansson,2016)

a-the size of government sector: The larger the size of the public sector, the higher its

expenses and this will lead to a decrease in the rate of growth in the long term due to

increased expenditures for the operation of the public sector. Small governments may

also fail to grow in the long term due to poor planning and lack of a base on which to

grow. (Johansson,2016)

b- The composition and efficiency of government spending: When the government

spending is based on the development of investment in human resources and physical

such as research and development, this leads to the development of economic growth

in the country, especially when the market is in a state of failure of the private sector.

(Johansson,2016)

c- The composition and design of the tax system: Taxation can increase the rate of

growth because modern tax designs are more favorable to achieve this growth.

However, there are still disincentives to the growth sector, such as taxes that limit

human and physical capital that may reduce growth over the long term.

(Johansson,2016)

d-fiscal framework: Supports the growth in the state to the extent that the public

finances in the state in the best image and in a sustainable situation and play a role in

achieving economic stability in the country and usually achieve better budget results

in terms of deficit and the development of debt. (Johansson,2016)

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