PUBLIC

FINANCE
RECENT EXAMS QUESTIONS
Q1) Discuss in Details: The Traditional & Modern Definition of Public
Finance, The Relationship Between the Financial Economy & The Other
Sciences? (P.6 TO P.24) “2023 EXAM”
ANS.

First: The Definition of the Public Finance

The Traditional Definition:

The public finance is "the science that deals with the rules that the government and the
general authorities have to apply in determining the public expenditures, insuring the
financial resources for the expenditures by dividing their burdens among citizens".

This development had happened after the First World War, especially after the Great
Depression. Such development was not limited on the means and the ways, but it
exceeded to the definition of the financial economy "the Public Finance" and the state's
aims. So, the financial economy was no only regarded as a mean to insure the state
expenditure, but a mean of interfering in the economic and social life.

The Modern Definition:

However, the modern definition of the financial economy means "the science that search
the financial and economic activities of the state when it uses the financial means such as
taxes, expenditures, fees, loans, monetary means and general budget.... etc., to achieve its
political, economic, social and cultural goals.

So, if the modern definition is the dominated definition among the economists of the public
finance, we consider the financial economy is "the science which studies the economic
and financial relations that arise when the state does its financial activities, which means
when the state gets the revenues and use them in covering the public expenditures that are
directed to do the public services, and satisfying the general needs in order to achieve the
economic, political and social goals of the state".

In order to do its financial activities to achieve its specific goals, the state has to use a
group of financial instruments such as: the general budget, the public expenditures with all
their kinds, taxes, fees, royalty, the surplus of the public business sector, different kinds of
loans, public debt management, credits, financial papers and the monetary Issuance.
As a result, we can say that the base of the public finance subject is the sum of the public
needs that the state has to satisfy in every stage of the society development. Thus, to
satisfy these public needs, some public services should be done. In order to do these
services by using the public expenditure, the state has to get some public revenues. So, the
public expenditure is done through getting general revenues such as taxes, fees and loans.

Thus, some economists differentiate between the social needs and the needs that should
be satisfied as they both are regarded public needs. So, they consider the social needs as
things that are satisfied by a common the benefiters because they are undivided public
benefit. So, their satisfactions are not connected with the market and we could not get rid
of the individuals who could not be able to pay the cost of these services. As a result, the
public expenditure on these services from the public budget is inevitable.

Dealing with the services which should be satisfied or deserved to be satisfied are
considered also as public needs but they could be satisfied partly through the market. So,
the individuals who are able to pay the fees of these services can only benefit from them
such as the health services and the educational services. Thus the individuals are not
equal in the benefits resulted from such services. As a result, the public expenditure is a
complementary for the market role in satisfying such needs.

Second: the relationship between the financial economy and the other sciences:

In fact, the financial phenomena are regarded as complex and interrelated phenomena
that submit to different economic, political, legal and social factors. As follows:

1- The relationship between the public finance and the social science:

The public finance is apart from the social sciences as it focuses on studying the financial
phenomena of the social relations. So, the relationship between the public finance and the
social situations are so strong and clear. Thus, the financial system is a part of the
economic system which is considered as a part of a comprehensive system" the social and
political system". As a result, there is a relationship between the financial system and the
social and political situation of the society that should lead to use financial instruments to
achieve social goals such as social subsidies to face unemployment, disability, old ages,
health and educational services, as well as social care that are done freely or without
payment.

The social development of the state results in the development of the financial principles
and the financial policy so that the state can achieve the social goals, especially achieving
the social budget, redistributing the income, limiting social differences, and expanding the
social prosperity to achieve enough amount of social justice among the individuals of the
society.
2-The relationship between the public finance and the political science:

The beginning of the public finance goes back to the presence of the state. So, the essence
of public finance is the financial activity of the state. Also, the financial system of the state
is affected and affects strictly by the political science because the financial system reflects
the directions of the political system and at the same time one of the main tools that
achieves the goals of that system.

Thus, the political form of the state affects its financial system as the general revenues and
the public expenditures are different according to the system of the state either it is
capitalist, or it is socialist. In addition, the public budget of the state and the other budgets
are regarded as a true reflection of the governed system, its priorities and its goals, as well
as the public finance with its rule has a great effect on the political system.

3- The relationship between the public finance and the law sciences:

In general, the law represents a group of legislation rules that govern the relations among
the individuals, or among the individuals and the state's authorities, or between the state
and other states. Such rules are characterized by their publicity, commitment and
obligation.

Furthermore, a legal rule cannot be established unless the economic and financial reality
is put into consideration. In addition, the civil contracts must have a financial form such as
selling, buying, and insurance contracts as all of them reflect economic and financial
actions that must be identified in order to be formed, understood. Also, the development
and the complication of the economic and financial realities appear a kind of crimes that is
called financial crimes, such as tax and customs evasion, monetary crimes, as well as
stealing, looting and embezzling public money. So, the economic and financial reality must
be understood so as to put the appropriate legislation.

In addition, there is a relationship between the public finance and the administrative law as
the administrative law control and arrange the work of the public services that need to the
public expenditures organized by the financial legislations. Also, the financial authorities
such as taxation authority and customs authority are in fact administrative authorities that
concern with financial matters, thus, they are organized by the general rules of the
administrative law.
4- The relationship between the public finance and the political economy:

It is worth mentioning that the public finance is a part of the political economy science
which is regarded as the science of laws that deals with the economic phenomena, which
studies the economic relations that deal with production, exchanges, commodities,
services and incomes distribution in order to satisfy the needs of the society and
individuals.

To satisfy such-needs, the some revenues found in the society must be got which is
regarded as the essence of the financial activity of the state. Hence, the public finance is
regarded as a part of the political economy. So the relationship between the public finance
and the political economy leads to the following facts:

a- Studying political economy provides the public finance researcher with the basic
principles of scientific analysis of the financial relation development law, as well as
analyzing the essence and the aim of the financial activity.

b- The financial policy must be identified according to its effect on the economic activity in
the society which cannot be known or identified its fields unless the rules of the economic
activity are followed.

5- The relationship between public finance and accounting and statistics:

To search in a lot of the financial economic subjects, the rules and arts of accounting and
auditing that dealing with budgets especially in the field of taxation accounting must be
known. Also, preparing the state's public budget and the attached schedules must be done
according to the identifying of the accounting and financial systems. In addition, as the
interference of the state increases in the economic life, the relationship between the public
finance and accounting increases through issuing budgets and projects that are
established by the state.

Furthermore, there is a relationship between the public finance and the statistic science,
identifying the state financial policy and the aimed amount of money require using different
statistics about production, national income, wealth, distributing the national income, the
number of population, the statistics of consumption, investment, saving, credit, foreign
trade. in addition to identify the various statistical systems in order to evaluate the followed
financial policy and knowing its economic, social, political effects.
Q2) Discuss in details: The Economic & The Financial Role Of The State,
The Financial Activity & The Financial System, The Public Finance & The
Private Finance? (P.15 TO P.24) “2023 EXAM”
ANS.
The economic and financial role of the state:
As we have mentioned before, the state has a financial activity whose essence is to get
monetary revenues and spend them which is not the main aim but it is a mean to do
services that satisfy the public needs. So, the state's role in satisfying public needs is
identified by the following:

1- The social and the economic nature of the state, which leads us to differentiate between
the role of the capitalist state and the role of the

socialist state.

2- The development stages of the society, which leads us to differentiate between the
state's roles across the different stages of the social

formation development.

According to this, we will differentiate between the capitalist state, the socialist state and
underdeveloped state as follows:

A- The Economist Role of the Capitalist State:

In the first stages of the capitalist economic development, the state played a vital role in
accumulating the trading capital and establishing industries and bearing the risks of the
projects.

However, when there was a scarcity in the labor element, the state's role extended to
reduce exceeding of the wages to prevent reducing the profit that has an adverse effect on
the capital accumulating and industrial expanding, as shown in the following:

The Role of the Guardian State:

When the capitalist economy stage exceeds the commercial capital accumulation stage
and the beginning of industrial development, the role of the State has been limited and
turned to become a guardian state. The function of the state has become:
1- Protecting the society from violence or any foreign attack (external defense).

2- Achieving the internal stability through doing inside services such as police and
judiciary.

3- Doing public works, which means the projects that supply the national economy with the
main services of production (such as: irrigation, roads, bridges, transportation, buildings,
electricity, education, culture and the public health).

The Role of the Contemporary Capitalist State:

After the Great Depression Crisis, the state began to deal with the economic functions that
were beyond the role played in the previous stage as a guardian state through Keynes'
theory concerning the level of employment in the national economy, where concentrated
on the new role of capitalism state.

As a result, while the economists of the classical school believe that the development of
the capitalist economy is a budgetd development over time and that the system naturally is
able to achieve full employment, Keynes saw that the capitalist economy works very often
at less than full employment level, and its applying leads to fluctuations in the level of the
economic activity.

Thus, he concluded that the effective aggregate demand consists of consumption on

consumer commodities and spending on productive commodities ... and if consumption
on consumer commodities is almost stable, the demand for productive commodities is
much change, which justifies choosing it as a strategic factor to influence the level of
employment by creating effective aggregate demand on these commodities, through state
spending on certain types of investments in order to lift the national economy out of its
crisis.

However, focusing the role of the state on the economic life does not mean neglecting its
role in social and political life, as its role in both these fields is linked to the existence of the
state as a social organization.

B-The Role of the State in the Socialist Economy

[The socialist state is responsible for the entire economic activity which means its
interference in the financial activity. This responsibility is practiced by the state through
national economic planning that includes planning the financial structure for all the
economic activity in the society.
So, the economic role of the socialist state represents in its interfering in the economic life
in order to achieve a continuous change in the national economic structure to ensure the
continuous rising of the living and cultural level for the individuals of the society to satisfy
their social needs during its permanent development.

C- The Role of the State in the Underdeveloped Economy

The main problem that face the underdeveloped economy is represented in getting out of
the economic and social underdevelopment through developing process that includes
changing the structure of the national economy that could be done through
industrialization. As a result, structural changes should be done in all aspects of the
national economy in a relatively short time. So, the state's role in the economic life exceed
to include the regulative changes that are necessary for the different sectors of the national
economic sectors and for doing its strategic role in the process of the economic changes
that leads to expanding its financial activity.

Fourth: the financial activity and the financial system

• The financial activity:

It is a group of the public needs that the state has to satisfy in a certain stage of the
society's development stages. In order to satisfy these needs, the state has to use the
expenditure to buy the necessary service, as well as to establish public projects and
operating them whose applying differs from the capitalist states to the socialist states. In
addition to the expenditure of the state to help the poor classes which have different
shapes such as subsidies, compensations, fines, the public projects profits, the new
monetary issuances.

Meeting the public expenditures with public revenues need from the public authorities to
put a specific program for a specific future period of time which lasts often a year; such
program is called "a budget" or "a public budget".

so, we can say that pubic expenditures, public revenues and public budget are the main
three subjects for the axis of the financial state activity and at the same time they are the
main tools for applying the financial state policy.
. The financial system:
It is defined as a group of elements and relations. These elements are the parts that form
the system but the relations link the elements that form the system. As a result, the
financial system can be defined as a part of the economic system which is a part of the
social system. In fact, the relationship between the financial systems with the economic
system is a relation between a part with a whole.

Such relations are very clear as the essence of the economic activity is doing a lot of work
using the existing resources under the control of the society to satisfy the individual needs;
a part of these public needs is satisfied by the state and its authorities. Thus, the financial
system is just a part of the public economic activity, and the quantity of money which
represents public expenditures and public revenues is economic quantities which act as
apart from a whole that have an exchange relations as follows:

First: the public revenues represent a part of the aggregate economic quantities which are:
the national product, the national income and the national expenditure.

Second: the public expenditures add to the economic amounts through the economic
quantities by increasing the public expenditure which participate in creating national
product and national income.

As a result, the financial activity is not only connected with the public economic activity but
it becomes a part of it. Such fact leads to two important results: one of them deals with
submitting the financial activity of the state to the main concepts of the economic analysis.
The second result deals with the coincidence of the financial policy with the economic
policy.

Fifth: The Public Finance and the Private Finance

The financial activity done by the state is different from the financial activity done by
individuals and private organizations according to the aims that the public activity and the
private activity are seeking to achieve. Individuals and private finance are seeking at
achieving their personal benefits which are represented in getting the biggest amount of
profits but the state and public finance are seeking for achieving the public benefit even if
their financial activity does not achieve profits. Accordingly, the public finance is different
from the private finance as follows:
- Dealing with expenditure:

The private projects through its expenditure aim at achieving the utmost possible profit, but
the state aim at achieving the public benefit (the society benefit). So, the succeeding
standard of the private activity is done through achieving profits, but the succeeding
standard of the public activity is done through its achieving the social and economic aims
that are planned and which are different from a state to another according to the nature of
the state. In addition, the expenditure of the individual aim at providing his private needs
but the expenditure of the state aims at providing the public benefit.

- Dealing with revenues:

The ways which are followed for getting revenues are different from the private activity and
the public activity. The private projects get their revenues optionally through buying their
products to the state and individuals, but the state has the power of obligation hat has got
from its sovereignty such as imposing taxation, fees the right of issuing new money to cover
a part form the public expenditure, the right of confiscation some of private properties in
times of wars and crises. Also, the state can get revenues by following the same ways done
by the private activity especially the agricultural, industrial, and commercial projects, as
well as its private projects.

- Dealing with the budget:

Individuals and private organization estimate their revenues, then they determine their
expenditure that are directed to these revenues to make the expenditures are within the
limits of revenues, thus the budget is achieved between them. On the contrary, the state
has to decide at first the different aspects of expenditures, and then it determines the
revenues that cover them to achieve a budget between expenditures and revenues.

However, these differences between the public finance and the private finance through
expenditure, revenue and budget aspect must not prevent the relations between them, as
the public finance has the greatest effect on the private economic activity, as its
expenditures enter in the current of the aggregate expenditure. As a result, the public
finance affects the level of the individuals and the private organizations income In addition,
its revenues are taken from incomes and privates wealth.
Q3) Discuss in details: The nature & definition of public expenditures
•The development of the public expenditures• Theory the Non-economic
divisions of Public Expenditures.? (P.27 TO P.40) “2022 EXAM”
ANS
First Point: The Nature and Definition of Public Expenditures:
Public finance economists agree on the definition of public expenditure as a sum of money,
levied by the state or one of its organizations (one of public law individuals). So, there
should be three elements should be available in the public expenditure, namely:

1. Spending an amount of money, that means the monetary characteristic of public

expenditure.

2. Public expenditure comes through one of public law individuals.

3. The aim of public expenditure is to satisfy public need or to achieve public benefit.

First: Spending an amount of money "monetary characteristic of public expenditure":

Recently, Public expenditure takes the form of monetary expenditures, as a result of

developing the economic systems from real economy to monetary economy that based on
a monetary swap. Thus, public expenditures have turned to be in a monetary form whether
it is done in order to obtain commodities and services or in the form of paying laborers'
salaries or offering subsidies or aids.

there are a sum of political, economic and social factors have led to the state's
dependency on public expenditures in a monetary and not a real one, namely:

a.) The monetary pubic expenditures facilitate achieving the principle of legislative
authority control over public expenditures in order to guarantee using them well and to
achieve their goals, while it is difficult to achieve such goals by using real expenditures
under a lot of administrative and organizational problems.

real expenditures include a disruption or imbalance of the principle of equality between

individuals in bearing burdens and in public costs, as despite the state achieves equality
between individuals in tax payment; it may also give some individuals real benefits which
exceeds the real value of money and services of what they provide to the state than the
others, thus, reducing tax burden for those individuals more than the other citizens. Such
an imbalance of the equality principle does not happen in the case of the monetary
expenditure.
b.) Real expenditures violate the principles of democracy, as it is regarded as an assault on
the freedom of individuals and their rights, such as: the use of obligatory methods to force
individuals to perform business through capturing, expropriation or conscription.]

Second: Public expenditure comes through one of public law individuals.

That element relates to the public individual who carries the process of expenditure, as it is
agreed among the economists that expenditure should be done through an individual of
public law such as the state or general authorities or general central institutions, local
government unites, cities and villages' councils, or the province in federal states.]

[On the contrary, the expenditures that deal with individuals or private projects are not
considered a public expenditure, even if one of its goals is to achieve public interest, such
as donating a person to build a public project as a school or hospital. In fact it is regarded
as a private expenditure.

As a result, in determining public expenditure according to the characteristic of the

individual who carries out it, the financial economists are divided into two criteria
(standards), first: the legal standard and the functional standard.

a.) The legal standard:

According to that standard, public expenditure is determined by the legal nature of

individuals that are spending such as the states, general authorities and local authorities
(individuals of public law).

Expenditures that come through these individuals consider as public expenditure, as their
activity aims at achieving public good. In addition, their commanding authority appears
clearly and, they are relying on issuing administrative decisions, while the individuals of the
private law targeting private benefit in their spending.

b. The functional standard:

It is based on determining public expenditure on the bases of distinguishing between

public expenditures and private expenditures, not on the basis of the legal nature of the
individual who carries out the duty of expending, but on the basis of the nature of the
function that offers expenditure and the extent of its authority to command.

According to that standard, the expenditure is public if it is done by the state as a

commanding authority. While expenditures that are spent by the state and other
individuals of public law in similar conditions to what is done by private law individuals is
regarded as private expenditures such as industrial and commercial projects' expenditures
that owned by the state.
Third: The aim of public expenditure is to satisfy public need or to achieve public
benefit

The essence of public finance and the financial activity of the state are to satisfy public
needs, which in turn, require the presence of various institutions for that purpose, which
should be covered by public revenues. Thus, the expenditures that do not satisfy the public
need or do not have public benefit for individuals, but achieving a private benefit is not
regarded as public expenditures.

Second Point: The Development of the Public Expenditures Theory:

The Traditional Financial Thought:

The traditional financial thought of public expenditure focuses on two points: On the one
hand, traditionalists regard public expenditures destroy a part of the national wealth. On
the other hand, they call for preserving the traditional neutrality of public expenditures.

First: Public expenditure destroys the national wealth:

Traditionalists believe in absolute uselessness of the governmental expenditure

productivity, as public expenditure is only a kind of consumption, because it involves on
consuming a part of the society's wealth as a result of the consumption nature and non-
productive of government activity.

The state through its expenditure, it consumes the services used by its staff or workers, as
well as it consumes various commodities shared by citizens among themselves, which
resulting in reducing the funds at the disposal of the group.

Traditionalists look suspiciously to the public expenditures, as they destroy the national
wealth, and then they were always calling to restrict it in narrower limits.

Consequently, according to their point of view,(public expenditures are limited to ensure

running the essential public utilities. So, the budget's role is to ensure a balance between
the normal regular public revenues and public expenditures.

Second: The neutrality of public expenditures:

Public expenditures aim at running the necessary public utilities, and not using the state's
expenditures on other purpose. As for example it is not permissible to use public
expenditures to affect the socio-economic conditions as it is determined by the laws of the
market, because every expenditure designed to achieve a particular purpose inconsistent
with the laws of the free economy is naturally a harmful expenditure.
Thus, the state's interference in economic and social life leads directly or indirectly to
obstruct the natural laws that achieve balance.

If the state does not interfere in economic life, savings and investment tend to equal by
interest rate changes.

The human, natural and artistic resources of the society will be used as efficiently as
possible, and then it was natural to the traditionalists to believe in the traditional principle
of "the neutrality of public financial".

The idea of neutral expenditure appeared and settled which means that expenditure should
not affect the economic and social life that means it does not change the economic cycle
in the production, distribution and consumption that result from free competition among
individuals and do not adjust social class positions.

However, that absolute neutrality of public expenditure advocated by traditionalists is

almost impossible in practical term, as any expenditure has its economic and social
effects even if it is unintended.

We find that the appointment of public employees in the government and public authorities
would lead to decrease the amount of labor available for the private sector, and when the
state pays salaries to their employees, it will increase their purchasing power and will
improve their standard of living, which leads them to live in places where the public utilities
are located, and so on.

According to the criticism of the traditional financial thought, traditionalists are forced to
recognize that the absolute neutrality of public expenditure is impossible to be achieved,
despite they are still calling that the public expenditure which disturb the situations of
economic and social balance is considered as an evil that must be reduced or confined to
a narrower range.

Third: The Modern Financial Thought:

The financial modern thought concerning the public expenditure be summarized in two
points: first, public expenditure process is merely a redistribution process. Second, public
expenditures as a tool of fiscal policy.
First: Public expenditure is just a redistribution process:
Modern economists look at the state with more realistic than the not just the a supposed
legal financial traditionalists, as the state individual, but it is in fact a group of individuals
working, spending and consuming together, and the state as a legal individual cannot
spend nor consume, but the individuals who constitute the state spend and consume at
the end.

For example, the employees of state, its suppliers and contractors are the individuals who
are spending money offered by the state, and that money has already deducted from other
people through taxes, fees loans and other general revenues.

In fact, the picture of redistribution process done by the state through public expenditure is
not much different from the role played by individuals through expenditure, as expenditure
even if it is private; it includes a special kind of redistribution.

Thus it is clear that the redistribution by the state through its financial systems is
completely applied to what is happening practically if we restrict ourselves to look at the
monetary cycle that is done within the national economy.

Accordingly, we find that the modern analysis approaches in its essence to the traditional
analysis but, the traditionalists regard that using money deducted from individuals by the
state and redistributing it as public expenditure, is considered less useful if the state does
not intervene.

However, the modern thought does no longer accept such an analysis of the public activity,
as no one can believe of the absolute superiority private activity on the public activity. So,
in some cases, the public activity could be more superior to the private activity.

Second: Public expenditure as a tool of fiscal policy:

With the development of the economic thought and the disappearance of the idea of
absolute superiority of private activity, with the modern economists confirming of the
impossibility of achieving neutral expenditure, as well as the inevitability of social,
economic and political effects of public expenditure, and with the insistence of the
Keynesian school on the intervention of the state in economic activity with all their
economic and financial policies to achieve the objectives of society, it has become an
obligation for the state to intervene to guide the national economy and managing it
effectively for the benefit of the group.
Consequently, it became the duty of the state not only to intervene to cure, modify, direct,
and decide to use the economic resources for the good of the society.

Thus, after the state's activity is limited to protect the internal security and the external
defense (the guardian state), it is extended to include the fields of public services
including, the dissemination of education, public health care and increasing the causes of
social welfare. It also includes the fields of productive projects to work on using the
resources and developing society's wealth.

Accordingly, as a result of developing the role of the state from a guarding state to an
intervention one leads to increase the public expenditure, and verify its purposes and
accept a positive form, rather than the previous neutral form, thus, its economic
expenditure field has been expanded to include some productive branches in order to
increase production.

Also, the social expenditure increased to raise the standard of living and to achieve social
balance (for example the expenditure of health, education, social insurance as well as the
subsidies of disability, old age, unemployment, and fixing the level of prices).

Third Point: The Non-economic Divisions of Public Expenditures:

It means the divisions using uneconomic standards, and which may be according to the
recurring periodic standards or according to the nature of the service, or according to the
nature of the authority which expending, or according to the administrative structure of the
state, as follows:

1. Dividing public expenditure according to the periodic repeating standard: according

to this standard, public expenditures are divided into ordinary expenditures and
extraordinary expenditures:

A- Ordinary Expenditures: that is repeated in consecutive time periods, such as the

necessary expenditure for the conduct of state or its national and local authorities or the
defense and the internal security expenditures.

B- Extraordinary Expenditures: that are not repeated regularly or consecutively and

achieved once or a few times without regularity, such as the war, disaster, and the sudden
epidemic disasters expenditures.

2. Dividing public expenditures according to the nature of the service: they are divided
according to the nature of the service performance that is targeted as follows:

A- Expenditures for economic services: in order to achieve economic goals. also

establishing public industrial, commercial and agricultural projects.
B- Expenditures for social services: to achieve social development goals, such as
subsidies and social security and health insurance, and social solidarity.

C- Expenditures for public services: to achieve the defense, security, justice and the
management of central and local state agencies both at home and abroad.

D- Expenditures for other services: it may include infrastructure services, such as roads
and transportation services, water and sanitation, as well as public debt service, grants
and aid.

In fact, that division is a functional division of public expenditure, and can be

distinguished according to it the following functions:

- Administrative function: relating to operating public utilities, as well as what is required

to achieve internal security, managing the state's administration centrally and regionally,
and the relations with outside world.

- National Defense Function: dealing with achieving external security of the state; it
independents from the administrative function due to its importance, as well as the
necessity of protecting the borders of the state and its national independence:

- Economic function: it aims at doing a range of investments, projects, basic services and
creating new communities, economic subsidies to achieve economic goals, such as
economic stability, ensuring a high growth rate, achieving equitable distribution of
incomes, and caring for low-income owners.

- Social function: it aims at achieving public social services, such as health, housing and
social care, as well as subsiding some groups and who are in bad social individuals who
have limited income or conditions that require assistance and in general to achieve social
solidarity and the providing safety nets and social justice.

-Educational and Cultural Function: it aims at achieving the development of education,

cultural and scientific research services in all stages of education.

- Debt Service Function: it aims at ensuring the repayment of internal and external public
debt, organizing grants, aid, the transitions from and to the national economy; such
function has become of a great importance because of the large increase in public debt.

3. Dividing public expenditure, according to the nature of the authority that is

expending: according to that standard, public expenditures can be divided into national
expenditures and local expenditures.
A-National expenditures: they can be done by central state authorities to perform its
functions for the entire range of society such as defense, political and diplomatic
representation expenditures.

B- Local expenditure: they can be done by the institutions and local government
authorities. It includes the special province only, such as the basic social services
expenditures in each province.

4. Dividing public expenditure according to the administrative structure:

If the administrative structure of the state consists of a central authority, which in turn
consists of ministries, departments, national organizations and public institutions, as well
as the local authority, which consist of the departments of the regions, provinces, cities
and village councils.

The divisions of public expenditures are spent according to that basis, where the
distribution of public expenditure for ministries, departments, public institutions, the
governorates and districts are done without regard to the functions or objectives carried
out by these units.

*SIMILAR QUESTIONS FROM RECENT EXAMS:

1-Discuss in detail : The definition of the public Finance The relationship
between the financial economy & the other Sciences? (2022 EXAM)
2-Discuss in detail: The economic & financial Role of the state. the financial
activity & the Financial system & the public finance and the private
finance? (2022 EXAM)
1-Discuss in detail: The nature & definition of public Expenditure, The
Relationship between public Finance & The Social science, The political
science & The LAW Sciences? (2023 ‫)تخلفات‬
2-Discuss in detail: public expenditures destroys the national wealth, The
neutrality of public expenditure The public finance & private finance?
(2023 ‫)تخلفات‬