PUBLIC FISCAL ADMINISTRATION

INTRODUCTION

The entire process of government can never be separated from its critical
functions of providing and protecting the resources to fuel its operations. No modern
government can operate gratis et amore, lovingly free, and be able to serve the public’s
with utmost efficiency, equity and effectiveness. Call it public finance as in early
development of modern government or the more current public fiscal administration
brand, there is not much distinction. What is significant is the substance and processes
of the system and goals guiding it. The political machinery, governance itself, remains
committed to enhancing the financial process so that public goods and services can
reach the constituent publics on time and as needed.
 
Governments perform multifarious functions like maintaining peace and order,
defense, quality education for the citizens, health, diplomatic relations, etc. Added to
these is its vital role in macro and micro economics like fighting economic depression,
inflation, stagflation and unemployment, as well as poverty alleviation.

Fiscal systems are primarily focused on generating revenues and handling

expenditures of political agencies. But the inside-out of environments of these systems
are in constant state of flux. As the needs for funds become more urgent, as more
demands are put on government operations, concentration on sources of revenue gets
more urgent. Not much thinking about management of the public funds has occupied
past efforts. Recently, its relevance and value has gained the long overdue
consideration.
 
Amidst these developments, students of public administration, administrators and
administrationists have to seriously understand the operation of public fiscal
administration.
 
The need for economic growth and “change in the quality of life makes
government plan of action unavoidable.
 
WHY THE NEED FOR PUBLIC FISCAL ADMINISTRATION?

Public Fiscal Administration has to focus on meeting demands of constituents

and to parallel the same with efficient efforts in putting up money resources in its
delivery systems.
 
Fiscal administration depends largely upon the general political organization. The
type of administration and ideology vary from country to country, thus financial
administration would somehow be affected. But the demand for sound finance
management is complied within every country, no matter what the form of government
is.
 
The primary issue remains whether the revenues and expenditures are properly
handled. The citizens have a right to demand the most capable management of public
funds. Government expenditures are eventually peoples‘ burdens. The more the funds
are squandered, the greater are the burdens upon the citizens. Graft and
misappropriation of funds in government demand a stricter account of the services
performed by officials. The requirement to keep watch on revenues and expenditures
through the skilled accountants and auditors becomes a must. Proper accounting and
audit of government resources are prime methods of safeguarding public funds. A
budget system that finally implements the plan of government operation offers the public
a better opportunity to know what and how it is used.
 
A sound public finance creates sound government. A sound government
operates sound finance.
 
SOME IMPORTANT TERMS DEFINED:

Publics are the peoples to whom the government delivers/serves with public
goods and services.

Public sector includes the national government agencies, local government

units (LGUs), government-owned and controlled corporations (GOCCs) and
government financing institutions (GFIs).
 
Fiscal refers to revenues and expenditures of political bodies.
 
Finance means monetary resources.
 
Administration is the formulation, implementation and evaluation of the
government‘s public policies including public finance programs.
 
Fiscal policy refers to government decisions on taxation, expenditures, profit
and income generation, borrowings for the achievement of government objectives.
 
Public Finance is about revenues and expenditures of government. It also deals
with public policies on government financial operation, monetary issues, impact of
economic decisions on the society, etc.
 
Public Fiscal Administration generally refers to the formulation, implementation
and evaluation of policies and decisions on budgeting and public expenditures, taxation
and revenue administration, resource allocation, borrowings and the management of
debt, the keeping of accounts and ensuring compliance with the laws, among others.
 
As a system, Public Fiscal Administration includes the environments,
organizational structures, systems and procedures and personalities involved in
formulating, implementing and evaluating fiscal and financial policy. On a higher plane
its policy also impacts on the national economy and international concerns.
 

PUBLIC FINANCE: SCIENCE OR ART?

Science is the systematic study that looks into causal relationship between
events and facts. On this basis, public finance may be considered a science when it
adopts the following features:

 scientific methods of investigation are applied

 principles are objective and measurable
 its facts and principles are orderly arranged
 a certain class of economics and political phenomena are foreseen and
explained
 human knowledge is definite and limited
 
The study of public finance is a positive science. It offers factual information
about the problems of government revenues and expenditures, the composition of
budget, and the incidence of fiscal operations. To illustrate: the study of public finance
tells the kinds of taxes, constant rise in government expenditure, increase of public
debt, etc. All these are facts and knowledge. But such study prescribes standards and
norms like the standards on the different kinds of tax.
 
Public Finance becomes an art when the outputs of science are used, learned
and applied, or when common sense and practicability are put into use whenever public
resources are generated, allocated and spent.
 
PUBLIC FISCAL ADMINISTRATION: ITS RELATIONSHIP WITH OTHER SCIENCES

Public Fiscal Administration is closely associated with other bodies of knowledge like:

Economics. Economics is the science which deals with the management of scarce
resources to satisfy human wants. Public Fiscal Administration is the science which
deals with satisfying the needs of the citizens. The same economic laws that govern the
problem of the distribution of “wealth affect the principles of Public Fiscal Administration
in dealing with government‘s generation of revenues and expending the same.
 
Ethics. Ethics deals with good and bad behavior of individuals. This is also observed in
fiscal principles.
 
History. History provides lessons of the past. It also provides facts, figures, and
illustrations of what and how problems in the government were treated which maybe
essential in the formulation of new fiscal policies.
 
Jurisprudence and Law. The fundamental law of the country is the basis of taxes
imposed and funds allocated. Rights and obligations of people are defined by laws.
These have direct bearing on how fiscal decisions may be made.
 
Political Science. Revenues are secured to carry out government objectives. Officials
are concerned about the exaction and use of funds since the public will always visualize
with disfavor any misuse of public funds.
 
Psychology. Most of the problems of public finance are human problems which is the
subject matter of psychology. For example, increase in the tax on the individual‘s
income will adversely affect the spirit of risk taking and makes individual investments
suffer.
 
Sociology. Sociology is concerned with the results of government activities and
compares these results with what has been accomplished in terms of outcome on the
society. The problems of social reform and the issues of Public Fiscal Administration are
inseparably related.
 
Statistics. Information on income, expenditure, debt, financial health of the public
finances are prepared in the form of statistical data. Public Fiscal Administration is
incomplete without statistics and would be difficult to understand.
 
PUBLIC FINANCE AND PUBLIC FISCAL ADMINISTRATION

These terms are usually interchangeable. Public finance is traditionally

considered a branch of the field of economics with specific reference to legal and
constitutional aspect of revenue sharing arrangements among spending government
units. Public Fiscal Administration is a sub-field of Public Administration where issues
are examined not only from the point of view of economics but from politics and
administration as well.
 
Public Finance is a much older label than Public Fiscal Administration in the
practice of government and the academics. But the focus has not changed, it is still on
government delivering public goods and services to the people with the use of money
collected as taxes or borrowed from legal sources either domestic and international.
 
PUBLIC FINANCE AND PRIVATE FINANCE

Public finance is the study of income, expenditure, borrowing and financial policy
and administration of “the government. On the other hand, private finance looks into
income, expenditure, borrowing and financial management of individuals or private
corporations. The differences are illustrated, thus:
MAIN AREAS OF PUBLIC FISCAL ADMINISTRATION

The main areas of Public Fiscal Administration are:

 Fiscal policy formulation, implementation, evaluation

 Taxation and revenue administration
 Budgeting and expenditure
  Public borrowings and debt management
 Accounting and auditing
 

These major areas are managed through:

a. study of budget cycle and its procedures; from the government unit, central
budget office and congress to the president

b. budget as an instrument in securing certain objectives such as promotion of

employment, economic growth with stability, welfare of the weaker sections,
infrastructural development for promoting private instruments, etc.;

c. fiscal policy of the government in dealing with inflationary and deflationary

situations, instability of the price level, promotion of full employment, growth
of economy, welfare of the people, etc.;

d. control over finance, accounting and auditing; and

e. application and relationship of economic theory and principles with the

practice of fiscal governance.

HISTORY OF PUBLIC FISCAL ADMINISTRATION

Public finance evolves with the development of society and the growth of
communal life. Changes in the demands and needs of people create added functions to
government. This scenario largely shaped the concepts and goals of public fiscal
administration. The knowledge, ideas and operation of public finance are themselves
produced by, and dependent on, the condition of society.
 
From the early occasion where the subject-people provided services to their king,
changes in politics and history evolved to government‘s responsibility of providing
protection to its citizens and many of their other needs. This transformation necessitates
the requirements of resource provision, allocation and management on the part of
government.
 
THE DEVELOPMENT OF PUBLIC FINANCE

Man seeks the association of his fellow creatures. This leads to the need for
establishing and enforcing certain society‘s regulations. Governments came about to
safeguard people and institutional property to ensure the orderly conduct of community
life.
 
 Government exercises the important function of providing or producing the
means of supplying the various needs and demands of the citizens. It creates the
materials and services or secures them from some already existing source. Among the
primitive peoples, the functions of governments are few and simple. With
civilized“states, tasks are numerous, complex but are well defined.
 

ONCE UPON A TIME

In ancient and primitive community, the citizens rendered services as their
contribution to the maintenance of their government. The economic and other
commodities needed are mostly furnished by individuals through the mode of exchange
or barter. In classical times, the state‘s special officers were provided income from
certain sources such as mines or productive enterprises and taxes upon tributary
peoples or certain inferior classes of citizens. Out of these funds the public officers were
supported, and paid.
 
Early forms of public revenue were obtained from the property of the subjects:
land, cattle and slaves were all constituents of the king‘s revenue, forced work were
contributed by members of the community.
 
Kings or rulers formed financial organization. Tributes in the form of money or
other valuable things were paid by tributary state or person as acknowledgment of
submission to kings, or for peace or protection. The oldest and most general form of
taxation is levied on the produce of land.
 
In the early stages of State life, public existence was associated with the family
and religion. The first form of public treasurer supported religious activities. There were
little expenditures for security/protection. Citizens rendered voluntary service to protect
the state. In foreign wars, the people furnished their own weapons and paid by the
spoils of conquest. Illustrations of these are: Great Wall of China and Pyramid of Egypt
which were constructed over a long time; armies and navies were for the defense
against desert raiders; peace and order was the community‘s primary concern; the
administration of justice and enjoyment of rights were only for the citizens of Greece city
states.
 
Public borrowings and debt management were practically non-existing. The
ancient state did not borrow money even in emergencies. It is relatively self-sufficient
and public expenditures were borne by the citizens and non-citizens.

Government had several functions to perform and revenues were needed for
these functions. Budgeting could no longer be ignored thus, it was exercised in order to
allocate and properly distribute public revenues for specific purposes. Since the public
budget merged with the king‘s purse, no distinction was made between the public and
the king‘s private expenditures.
 
 State audit had its beginning during ancient times and was a respected function
of state administration. The principle of accountability for those in charge of government
expenditures of resources emerged with organized government. As Plato wisely
advised: Public money should be disbursed before the eyes of the public.

Since ancient public finance was limited to tax and expenditure aspects, state
audit got its focus on the maintenance and inspection of financial records to ensure the
regularity of accounts and the legality of expenditures.
 
Government examiners performed audit activities: in Ancient Korea, by executive-
judicial bureaucracies like the Ombudsman in Scandinavian countries, the Control Yuan
of old China and the Roman Tibunus Plebis in the Imperial Rome.
 

MEDIEVAL PUBLIC FINANCE

This is the time in European history between the ancient and modern times. It
extends from the middle of the 5th to the 15th centuries.

FEUDALISM
A contractual system of political and military relationships existing among the
nobility in Western Europe during the High Middle Ages is known as feudalism. It is
characterized by the granting of fiefs land and labor in return for political and military
services of the landlords and kings. The contract is sealed by oaths of homage and
fealty (fidelity). The grantor is the lord, and the grantee, his vassal who holds land. Both
are free men and social peers.
 
For land (fief) provided, a vassal provides a variety of works and services to his
lord. He is expected to contribute to the wealth of his lord by turning over part of his
collected rents, along with farm products. He joins the army or the king and goes to war
when ordered to; keeps the fief in good order; maintains buildings; cultivates acreage.
Failure of the vassal to meet his pledge, the fief is confiscated and delivered to another.
 
The church greatly influenced feudalism. The church hierarchy paralleled the
feudal hierarchy. It owned much land given by nobles as donation or gift. Many powers
behind the throne serving as advisors were clergies called the black chamber or
―camara negra‖ who were heavily sought by rulers. Examples are “Richelieu” in
France, Thomas “Moore in England, Rasputin in Russia, Cardinal Spellman in America,
Cardinal Sin in the Philippines.
 
In Japan the feudal system was well ordered before the 10th century in the
person of the Shogun. In other areas, as in China, feudal practices were in existence by
1100 B.C. Feudalism in India and in the Saracen and Ottoman civilizations was
analogous to Western feudalism, but much less durable than the others. The Spanish
rule in the Philippines for three hundred years is highly characterized with feudal
practices.
MANORIALISM (SEIGNORIALISM)
While feudalism is a system of military and political relationships among the lords
or equals only, seignorialism is a system of political, economic, and social relations
between seigneurs (lords) and their dependent farm laborers.
 
The manorial system is presided over by the lord who could be a king, an
ecclesiastical lord, a baron, or any lesser noble. The manor is divided into arable,
meadow (the commons), woodland, and waste held by the peasants. The right to the
property or to increase the dues and rights of cultivation may be inherited by the
peasants. The lord gives military protection to the peasants.
 
The manor is an administrative and political unit. Manorial courts, with the lord
presiding over the administration of justice, is also for raising taxes.
 
The advent of market economy weakened the economic basis of manorialism.
Excess products are sold by peasants and used to get freedoms from their lords. The
political power of the seigneurs is also undermined by the growing jurisdiction of strong
princes. The system, with the birth of towns and rise of the middles class, is
undermined.
 
The Black Death of the later Middle Ages is a great blow to the manorial system
“labor and peasant become so valuable as workers in the land. The lords remain with
patriarchal influence yet the peasants gain legal freedom and lead to change of
residence and employment.
 
NEW SCHOOLS OF THOUGHT ON PUBLIC FINANCE
The end of feudalism and the manorial system are brought about by economic
and political factors and natural calamities. The concentration of power in the hands of a
few or of an absolute monarch is a great disruptive force in the feudal system. The rise
of powerful monarchs in France, Spain and England competed with the local
administration of the land lord. Wide development of towns and capitalistic commerce
broke down the small local economic unit based on land.
 
At the end of feudalism emerged three schools of thought: mercantilism,
cameralism and physiocracy.
 
MERCANTILISM
Mercantilism is an economic nationalism. It maintains wealth and power of the
state through restraint of imports and encouragement of exports. This system
dominated Western European economic thought and policies from the sixteenth to the
late eighteenth centuries.
 
The mercantile system stands for the interests of merchants and producers. They
are protected or encouraged by the states. Governments provides capital to new
industries, assists local industry by imposing tariffs, quotas and prohibitions on imported
goods, prohibits the export of tools and capital equipment the emigration of skilled labor
allowing foreign countries to compete in the production of manufactured goods. With
much gold and silver in the treasury, the government spends for armies and navies to
secure its interest and sovereignty. It is directed to achieve a “favorable”‖ balance of
trade. In the Philippines, during the colonial time, gold and silver were mined and
brought to the colonizing country.
 
The main principle of mercantilism is that if one nation gained, another lost.

CAMERALISM

Cameralism is concerned with the survival of the political regime by relying on

required military capacity. It also desires economic development, advanced
technologies, improvement of the population, creation of new enterprises.
 
The cameralists are against taxation as an instrument of public finance. They
argued that taxes should support the activities of the military while all other activities
should be financed from the prince‘s net commercial and property revenues.
 
The cameralists are consultants and administrators of the rulers. The term
cameralist was derived from camera or kammer, and refers to the room or chamber
where the counsellors to the king or prince gathered to do their work. The cameralists
are not like contemporary academic or plain consultants. They were partly economists,
partly political scientists, partly administrators, and partly lawyers rolled into one.

PHYSIOCRACY

Physiocracy is the rule of nature. Pierre-Samuel du Pont de Nemours coined the

word (1767) to describe the doctrine of physician and economist François Quesnay.
Quesnay believed that economic process involves natural law imposed on the
sociopolitical order. He argued that monarchical states require money not men, and the
product of the land must have monetary value.
 
In physiocracy, nature determines taxation not man. The land is the source of
wealth and produces the only disposable national economic surplus. The monarch is a
co-proprietor of all lands in the kingdom.

CAPITALISM

The industrial revolution transformed Western Europe and North America from
agricultural and trading nations to bastions of industries. A person self-employed as
farmer is now an employee at a large factory. The working class is born. This new
industrial workforce, the proletariat, works and lives in appalling overcrowding
conditions. Poverty is rampant. The cities are havens for crime and disease. The
emerging working class gets confused by the radical changes affecting them negatively.
Industries and cities grow rapidly.
 
Capitalism is a socio-economic system based on private ownership of the means
of production. It is characterized with the concept of free enterprise. It occurs when the
government gives up control over trade and economies and allows market forces to
take over. Capitalism argues that government function should be limited to the basics:
defense, public works, maintenance of the bureaucracy, and limited services in
education and health. All other services are to be provided by the private sector, and
because of the model of perfect competition, best goods at the lowest prices can be
attained.
 
The labor in a capitalist system is wage labor. Wages are paid to the laborers
Adam Smith: He saw the market system as an "invisible hand" which leads people to
unintentionally promote society's interests while pursuing their own Businesses are
dependent on capital and capitalists have the capital which can produce more wealth.
 
The time of capitalism is ushered through the works of the classical economists
who provided economic ideas now prevalent in the industrialized countries and less
developed countries (LDCs). They are:

ADAM SMITH (SCOTLAND, 1723-1791)

Adam Smith's monumental work, An
Inquiry Into the Causes Of The Wealth of
Nation (1776), started the Classical
School of economic theory.
 
For him, land, labor, and capital are the
three factors of production and the major
contributors to a nation's wealth. He
believes that market mechanism as an
"invisible hand" leads all individuals with
their own self-interests, to produce the
greatest benefit for society.
 
Smith believes that the government should provide public works, such as roads, bridges
and other civil works, and wanted the users of such public works to pay user fees.
 
His canons on taxation are founded on scientific and equitable basis: equity, certainty,
convenience and economy. He likens public finance to the prudent management of a
household, and argues that borrowing should only be resorted to in exceptional
circumstances. Smith is against deficit spending and advocated the concept of a
balanced budget.
 DAVID RICARDO (ENGLAND, 1772 –
1823)
Ricardo is an early believer in the quantity
theory of money, known today as
monetarism.
He explains the growth of population and
capital affecting rents, wages and profits.
Ricardo‘s analyses of public credit led to
the view of the utilization aspects of public
borrowings. He tirelessly worked for free
trade as an economic policy.

THOMAS ROBERT MALTHUS

(ENGLAND, 1766-1834)
Thomas Robert Malthus explained low
living standards through the idea of
diminishing return. He said population
increases geometrically, outstripping the
production of food which increased
arithmetically. The rapidly growing
population and the limited amount of
land give diminishing returns resulting in
low wages.
 
Malthus questioned the tendency of a market economy to produce full employment.
Unemployment is blamed upon the tendency to limit spending by saving too much.

JAMES STUART MILL (ENGLAND,

1806 – 1873)
In Principles of Political Economy,
Mill elaborates on the ideas of Adam
Smith and David Ricardo and talks of
economies of scale, opportunity cost,
and comparative advantage in trade.
 
Mill differentiates between the
market's two roles: allocation of
resources and distribution of income.
The market might be efficient in
allocating resources but not in distributing income. This requires the state to intervene.
He favors inheritance taxation, trade protectionism and regulation of employees‘ hours
of work and mandatory education. He advocates a voucher system for schools and a
state system of exams to ensure that people have reached a minimum level of learning.
From this, the contemporary practice may have been patterned and adopted.

JOHN MAYNARD KEYNES

As a reaction to the severity of the
worldwide depression in the 1930s, John
Maynard Keynes published The General
Theory of Employment, Interest, and
Money. The Classical view admits that in
a recession, wages and prices would
decline to restore full employment.
Keynes maintains the opposite. Falling
prices and wages would prevent a revival
of spending by holding down people's
incomes. He insisted on direct
government intervention to increase
spending with chronic unemployment amidst depressed economies
 
Keynes argues for the use of government spending and taxing to stabilize the economy.
Government spends and decreases taxes when private spending is insufficient and
threatens a recession; it would reduce spending and increase taxes when private
spending is too much to result in inflation.
 
Keynesian economics has been the most influential economic formulation of the 20th
century. Although he favored controlled investment and an active public sector, Keynes
never wavered in his faith in the capitalist free market. His theory states that
government action is designed to stimulate the market, not to eliminate it.

MARXISM
Karl Marx, in "das Kapital" or Capital, sees
capitalism ultimately destroying itself and
be succeeded by a world without private
property.
 
He maintains that in a capitalist society the
proletariat invests its labor so that the
bourgeoisie (or upper-class) can make all the profits without investing any labor
themselves.
 
Marx predicts that capitalism would produce growing misery for workers as competition
for profit leads capitalists to adopt labor-saving machinery, creating a "reserve army of
the unemployed" who would eventually rise up and seize the means of production.
 
Marx believes once workers recognize their interests and become "class conscious,"
they begin the overthrow of capitalism; the socialist society would “emerge out of the
revolution; people would be aided on the basis of social needs; a class-less society
would be advantageous for the vast majority of the population.
 
Marx‘s stress on the economic factor in society and his analysis of classes has
influenced public finance in modern times.

SOCIALISM
Socialism is explained in the key work
of Karl Marx and Frederick Engel‘s
The Communist Manifesto published in
1848. Socialism is a step between a
country‘s current state and its move to
complete communism.

“Socialism is a social and economic

system. Property and wealth are
shared, and their distribution is subject
to the control of the people who exert
equal control of the government. The
state owns the means of work
production and decides what is produced and its distribution.
 
Since the people control production, inequity between rich and poor is lessened and a
fair distribution of wealth from what will now be implemented. Society becomes a place
for workers.
 
Some of the ideas of socialism are applied even to non-socialist states, such as
government health care, social welfare, public enterprises, or retirement plans.
 

PUBLIC FINANCE EVOLUTION

A BEGINNING IN ITALY

The practice of Public Finance is much ahead of the study of economics. Early
economic discussions were around central issues of public finance.
 
Early on, the finances of the State had no distinction from those owned by the prince.
The initial appearance of the development of commerce and trade began in Italy which
dominated the world trade and became the commercial center of the world. The rapid
growth of city-states such as Florence and Naples influenced the growth in their fiscal
needs. It was in these Italian city-states of “of the fifteenth century that the first
systematic study of the principles of public finance and practice were conducted.
Concerned issues were progressive taxation, the administration of revenues, and a
systematic classification of expenditures and many more ideas were given much
attention.
 
THE FRENCH AND GERMAN SCHOLARS

Jean Bodin, a Frenchman, saw the need for a systematic study of the changing
political and fiscal conditions. He considered the state‘s proper management of its
expenditures and revenue and advocated honesty in the generation of revenues and
use for the good of the state.
 
For a time, there was not much activities in the field of public finance. But abuses
of governments in managing public money became widespread. In the works of
Montesquieu in 1748, he condemned the institution of public credit and discussed at
length on the influence of government upon fiscal systems.
 
German writers made their thoughts on public finance felt. As in public
expenditures, they considered that incomes from public properties should be the base
for a sound fiscal system and the economic and political effects of the various kinds of
taxes.

THE WEALTH OF NATIONS

Adam Smith espoused the concept that the state could obtain greater power of
wealth once it allowed trade and industry free of state controls. Instead of regulations,
the function of the government should be directed to supply facilities to aid industry,
commerce, and exchange thru sound systems of currency, banks, and credit.
 

PUBLIC FINANCE AND ITS ADMINISTRATION IN THE PHILIPPINES

PRE-SPANISH PERIOD
Before the coming of foreign conquistadores, the Philippines was already engaged in
trade with countries of Asia. The medium of exchange was barter system of
commodities. It was based on trust and honesty of participating parties. Commercial
items were left at the shores in the absence of buyers. The sellers would return months
later for the payments. Crude as it was, they had their own ways of accounting for their
barter business and also auditing them.
 
Village societies, known as barangays, were headed by chieftains called datus who
exercised full power on the lives of people. Simple governance included the communal
allocation and distribution of resources to the villagers. The “datus" collected tributes
known as buwis from the people. Nobles and freemen were free from paying tributes
and exempted from rendering services to the datu except in case of war.
 
SPANISH ERA
The Spanish conquerors who defeated the local rulers established settlement in Cebu
and their capital in Manila. The location of the Philippines was good for international
trade with neighboring countries.
 
The Spanish Empire utilized the clergy of the religious orders of the Catholic Church to
reach the natives and influence them with Spanish culture, politics and faith. Religious
orders like Dominicans, Recoletos, Franciscans, Augustinians and Jesuits worked hard
for the conversion of the natives to Christianity.
 
In the early part of the conquest, the Spanish treasury had to subsidize the Philippines
in the amount of P250,000.00 per annum because of the latter‘s poor financial condition
attributable to the poor revenue collection system.
 
All male Filipinos, from 16 to 60 years of age, rendered forced labor called “polo” for 40
days a year. They worked in building and repairing roads, bridges and churches, etc.;
cutting timber in the forests, and working in artillery foundries and shipyards.
 
The tributes and the taxes, plus encomienda system (local version of estate) became
the sources of Spanish resources and at the same time of abuses and even state
corruption.
 
In 1583, the Audiencia Royal, functioning as legislative-judicial body, was established,
with added authority to audit. Bartolome de Renteria was appointed the first auditor of
accounts. The auditor of accounts was appointed each year to avoid connivance with
the auditee. Later, the appointed Auditor was allowed longer tenure to hold office.
 
The government also established three tribunals of accounts, each was composed of a
governor and two auditors (oidores) who stayed in the provinces to audit the accounts
there. This may be looked upon as s similar to the current practice of having resident
auditors in government offices. These improvements prevented large scale irregularities
and fraud in the generation and expense of colonial funds.
 
The Chief Royal Accountant served as the Chief Arbitrator whose decisions on financial
matters were final except until revoked by the Council of Indies.
 
The Philippines remained with Spain as colony for more than 300 years.

AMERICAN PERIOD
The American regime in the Philippines (1898 to 1946) lasted for almost 50 years. The
country experienced military government, civil government, and the Commonwealth.
Many of the Spanish legal and business practices were initially adopted until replaced
with those of American influence.
 
At the start of American rule in the Philippines, the position of auditor was created by
the Military Governor and Major Charles E. Kilbourne, Paymaster of the Army, was
appointed as the first Auditor of the American military government in the Philippines on
August 13, 1898. The office of Auditor was formally established on May 8, 1899 by the
U.S. President.
 
THE PHILIPPINE REPUBLIC
During the first Philippine Republic, the government was financed from two principal
sources of revenue: taxes and license fees, and military contributions, or war taxes.
Special payment for taxes was allowed in the form of rice, edibles, etc. for the
sustenance of the army.

Budget preparation on a yearly basis was practiced from the level of municipalities to
provincial and at the central government.

THE CIVIL COMMISSION

The system of handling government finance was reformed when the Civil Commission
headed by William H. Taft was established. The office of the auditor was reorganized
with the passage of Acts No. 90 and 91 by the Philippine Commission on July 4, 1901.
Act No. 222 converting the office into a bureau known as the Bureau of Insular Auditor
under the Department of Finance and Justice. This move finally reorganized auditing as
a permanent significant component of government operations.
 
The local governments were provided with their own sources of income from the real
property tax. A system of inspection and examination of banks, an accounting and audit
system, an internal revenue system and a tariff system under the Tariff Act of 1905 of
Congress were created. The powers and duties of the Secretary of Finance and Justice
included administrative and legislative matters.
 
Under the Jones Law in 1917, a budgetary system was introduced in the Philippines
which required the Governor-General to submit to the Philippine Legislature within ten
days after the opening of its regular session, a budget of receipt and expenditures to be
used as the basis of the annual appropriations bill. The budget was prepared by the
Secretary of Finance based on the estimates of income and expenditures submitted to
him by the different department secretaries approved by the Governor-General. The
Philippine Legislature made the final action on the appropriation bill.
 
THE JAPANESE OCCUPATION

Nothing much economic activities during the Japanese Occupation. Industries,

commerce and trade were almost on a standstill. There was practically no production
and agricultural lands remained idle for a time, which caused the exorbitant price of
basic commodities, particularly rice. Most people engaged in the buy-and-sell business.
It was a common experience to see people exchanging almost anything just for a
meager bag of rice or flour. The Japanese printed Japanese paper money popularly
known as ―Mickey Mouse‖ money which flooded the Islands resulting in inflation with
everything sold at an exorbitant price.

TODAY: BUILDING A NEW PHILIPPINES

This time the government of the Sovereign State pursued an overall stabilization
program. This was directed to curb the growing government deficits brought about by
massive spending.
 
Tax Reform Program was introduced: the 35% single tax rate for corporations was
formulated and implemented; the Value Added Tax was replaced; a complicated sales
tax structure; restructuring tax on the downstream oil industry; shift from ad valorem to
specific tax on "sin" products. The National Government efforts directed to sustain its
fiscal position by continuously providing corrective measures in its financial policy
formulation and implementation.
 FUNCTIONS OF GOVERNMENT AND THE ROLE OF FISCAL POLICY

Human resource, general public services, defense, public order and safety,
education, health, social protection, culture and religion, housing and community
amenities, environment protection, etc. are what government does. In the heart of all
these tasks is the management of financial and fiscal affairs. On the basis of available
resources, government decides to do or not to do public services and provide public
goods.

Effective public fiscal administration crosses the borders of politics, ideology, and
economics. In the words of one political philosopher: the best government is that which
governs best.

The primary reason for the existence of

government is to provide people with valuable
services which the private sector is unable or
not willing to provide.
 
Many different organizations – private
businesses, non-profit organizations, and
governmental agencies- provide the goods and
services that we use every day, including
those necessary for life itself and those that
make life more enjoyable.
 
But what is and what should be the extent of
government involvement in the economy? Government does not stop with the protection
of life, liberty and property as some have supposed; it goes on to serve needs of
society.

ECONOMIC FUNCTIONS OF GOVERNMENTS

The Philippine public sector operates in a mixed system. Financing is not only its
operations but also in the allocation of resources, the distribution of income, and the
level of economic activity.

Richard and Peggy Musgrave identified three economic functions of government:

a. allocation
b. distribution
c. stabilization
 
Michael Todaro adds development as another function of government.
 
ALLOCATION FUNCTION

In a free enterprise system, the economy is a private market economy. However, there
are instances where the markets fail to provide the needed goods or the appropriate
amounts of goods or services as it is impossible for private business to do so and earn
a profit.

Thus, a situation exists for the public sector to ―allocate‖ resources through the
governmental process.
 
Public goods: goods and services that are available to all people at no extra cost. They
are “non-excludable‘ and “non-rival‘.

 non-rival - a person‘s consumption of a good or service does not reduce the

amount available for consumption by others.
 
 non-excludability – when a good or serviceis provided, others are not prevented
from enjoying/benefiting from it.

A public good should not be

interchanged with phrases
such as ‗good for the public",
„public interest" or „publicly-
produced goods". Public
goods may be naturally
available. They may be
produced by private
individuals and firms, by non-
state collective action, or they
may not be produced at all.
 
Examples of absolutely public
goods include national
defense, law enforcement,
security and police
protection, judicial system, clean air, street lights, flood control dams. Education and
health services are examples of quasi-public (merit) goods that the market does not
provide enough of. The government helps in the provision of these services.

DISTRIBUTION FUNCTION
The government should provide relief to the poor, dependent, handicapped, and
unemployed. Welfare, Social Security and Medicare programs are examples of
programs that support the needy and incapacitated. Other means of redistribution are
price support programs like farm subsidy and low interest loans to students based on
their family incomes. In the Philippines, these governmental activities are those required
by the DSWD, Study Now Pay Later Program of the DepEd and state universities and
colleges.

STABILIZATION FUNCTION
It is the major responsibility of the government to provide an economic environment that
assures open market competition, economic growth, price stability, full employment and
national development.
 
Government may stabilize the economy through reduced fluctuations in income and
employment and controlled movements in the general price level.

DEVELOPMENT FUNCTION
The government plays a critical role in the development process of any country. Its
overarching economic goal is to increase the common weal, that is, the prosperity of the
community for the benefit of all. This goal is closely related to a government‘s other
social and environmental goals. These include improving the skills of the people, closing
the gaps in health, education, employment, housing and protecting and enhancing the
environment.

ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT

Traditionally, economists have made little distinction between economic growth and
economic development, using the terms almost synonymously. Generally speaking,
economic development refers to the problems of underdeveloped countries and
economic growth to those of developed countries.

Economic growth refers to sustained increase in a country's output of goods and

services, or more precisely product per capita over a long period of time. It does not
necessarily mean an increase in the volume of all goods and services. It is an overall
increase in total physical production. It also does not mean a uniform increase in the
volume of all goods and services. Output is generally measured in terms of gross
national product (GNP).
 
The term economic development is far more comprehensive. It means economic growth
along with desired changes in the distribution of national income and other technical
and institutional changes. It implies progressive changes in the socio-economic
structure of a country. It is economic growth accompanied by increase in real per capita
income, reduction in inequalities of income and in the number of poor people, and
generating institutional changes and development of technology that affect growth.
 
Michael Todaro sees three objectives of development:

a. Producing more life sustaining necessities such as food shelter & health care
and broadening their distribution
b. Raising standards of living and individual self esteem
c. Expanding economic and social choice and reducing fear.
 
The United Nations has developed a widely accepted set of indices to measure
development against a mix of composite indicators:

· UN's Human Development Index (HDI) measures a country's average

achievements in three basic dimensions of human development: life
expectancy, educational attainment and adjusted real income ($PPP per
person).
· UN's Human Poverty Index (HPI) measure deprivation using % of people
expected to die before age 40, % of illiterate adults, % of people without
access to health services and safe water and the % of underweight children
under five.

DEVELOPED VERSUS DEVELOPING ECONOMIES

Countries are generally categorized into less developed, and more developed. The less
developed countries are called ‘underdeveloped‘or ‘developing‘counties. More
developed are called ‘developed‘countries.
 
In the World Bank list of economies (January 2011), it classifies countries into four
income groups according to gross national income (GNI) per capita. The groups are: (a)
low income, $995 or less;(b) lower middle income, $996–3,945; (c) upper middle
income, $3,946–12,195; and (d) high income, $12,196 or more.

Geographic classifications and data reported for geographic regions are for low-income
and middle-income economies sometimes referred to as developing economies.
 
The United Nation lists countries as either ‘developed‘or ‘developing‘. The designations
"developed" and "developing" are only for statistical convenience. This does not
express the stage reached by a country or area in the development process.

The International Monetary Fund (IMF) classifications are: (a) per capita income level,
(b) export diversification, and (c) degree of integration into the global financial system.

CHARACTERISTICS OF DEVELOPING COUNTRIES:

Common characteristics of developing economies are:
a. Low level of income and consumption
b. Poor quality of life
c. High unemployment and poverty
d. Main occupation is Agriculture High rate of population growth
e. A large number of people are below the poverty line
 
The main characteristics of developed economies are:
a. High level of income and consumption
b. Better quality of life
c. Advanced technology and industry
d. Basic needs of all people are met
e. Low rate of population growth

FISCAL INSTRUMENTS
In Public Fiscal Administration there are two main instruments used by governments:
fiscal policy and monetary policy.
 
Fiscal policy refers to the mix of policies on revenues, expenditure of money, borrowing,
budgeting, accounting and auditing adopted by the government to achieve its objective.
It keeps on changing to suit the position of the economy and its needs.
 
The monetary policy is exclusively for banks and the circulation of money in an efficient
way. This may change based on the demand and supply of the money and affects the
rate of interest on loans.
Monetary policy is implemented by a central bank, while fiscal policy decisions are set
by the national government. Monetary and fiscal policies are used to impact the
performance of the economy.

FISCAL INSTRUMENTS OF ALLOCATION FUNCTION

The budget process is the vehicle by which allocation policy decisions are established.
The budget finances the operation of national departments and agencies assigned the
task of providing social welfare services, health care, roads, highways and bridges,
peace and security, national defense and other public services. The budget may be
used to encourage the production of private goods by the private sector.

FISCAL INSTRUMENTS OF DISTRIBUTION FUNCTION

The distribution of income and wealth can be influenced by government and made more
equitable through tax-transfer scheme. This includes progressive taxation of high
income with a subsidy to low income individuals.

FISCAL INSTRUMENTS OF STABILIZATION FUNCTION

The government promotes economic growth and stability (increasing the GDP, fighting
inflation and unemployment) through changes in its fiscal and monetary policies. The
government can use a mix of expenditures and tax policies to affect the level of
aggregate demand. It can raise expenditures or reduce taxes if aggregate demand is to
be expanded, and vice versa if demand is to be contracted. The monetary policies
signify the use of interest rates, money supply, reserve requirements, etc.
 
FISCAL INSTRUMENTS OF DEVELOPMENT FUNCTION
The government must maintain a sustainable fiscal policy. This includes a deficit that is
manageable in the short term, and the associated public debt it creates being
serviceable. The economic function of government is not merely to maintain a stable
macro environment; its primary responsibility to its citizens is to foster the general
welfare.
Legal Framework of Public Fiscal Administration in the
Philippines
Public finance is concerned with the generation of resources and spending the
same for public interest and purpose. The discussion of the constitutional and other
legal basis of public finance arrangements: fiscal policy, taxation, budgeting, debt,
accounting and auditing, as well as the different government organizations that play
central roles, are equally important and significant in the scheme of financial activities of
government.
 
LEGAL FRAMEWORKS OF TAXATION, BUDGETING, BORROWING
TAXATION

The power of taxation is an inherent power of the State. The sources of tax laws are the
following:

a. 1987 Philippine Constitution

The power to tax is not expressly provided in the 1987 Philippine Constitution, however,
limitations on its exercise are numerous.
o Observance of due process of law (Section 1, Article III, Bill of Rights)
o Observance of equal protection of the laws (Section 1, Article III, Bill of Rights)
o Prohibition against imprisonment for non-payment of poll tax (Section 20, Article
III, Bill of Rights)
o Prohibition against impairment of obligation of contracts (Section 10, Article III,
Bill of Rights)
o Requirement of uniformity and equity in taxation (Section 28, Article VI,
Legislative Department)
o Prohibition against taxation appropriation for religious purposes (Section 29,
Article VI, Legislative Department)
o Prohibition against taxation of non-stock, non-profit educational institutions and
proprietary educational institutions; their exemption from property and income
taxes as well as customs duties except income derived from business activity not
related to its educational purpose (Section 4, Article XVI, Education)
o Power of the Supreme Court and the Judiciary on the legality of any tax, impost,
assessment, or toll or any penalty imposed in relation thereto (Section 5, Article
VIII)
o Local government taxation (Sections 5, 6 and 7, Article X)

b. Laws

o National Internal Revenue Law (Republic Act No. 8424, The Tax Reform Act of
1997). It codifies all tax provisions.
o Tariff and Customs Code of 1982 (Executive Order No. 688). The Code
assimilated various amendments to the Customs Code under P.D. 1628 and
 1980 as well as reprints of the tariff concessions under the General Agreement
on Tariff Multilateral Agreement Negotiations as provided in Executive Order No.
578, series of 1980, and the tariff concessions granted to ASEAN member
countries as embodied in various Executive Orders from 1978 to 1981.
o Omnibus Investment Code of 1987 (Executive Order No. 226, as amended by
Republic Act No. 7918) It integrates basic laws on investments, and investments
incentive.
o Special Economic Zone Act of 1995. The Philippine Economic Zone Authority
(PEZA), a government corporation is established which grants fiscal and non-
fiscal incentives to developers of economic zones, export producers, and
information technology service exporters.
o Republic Act No. 1125, as amended by Republic Act No. 9282, creating the
Court of Tax Appeals possessing all the inherent powers of a Court of Justice on
taxation matters.

c. Treaties

The Philippines has entered into several tax treaties for the avoidance of double
taxation and prevention of fiscal evasion with respect to income taxes. At present, there
are 31 Philippine Tax Treaties in force.”

d. Local Government Tax Law

Local government taxation in the Philippines is based on the constitutional grant

of the power to tax to the local governments (Sections 5, 6 and 7, Article X, 1987
Constitution). The 1991 Local Government Code grants all local government units’
general tax powers, as well as other revenue-raising powers like the imposition of
service fees and charges, in addition to those specifically granted to each of the local
government units.

BUDGETING AND PUBLIC EXPENDITURES

a. 1987 Philippine Constitution

o All appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills to originate exclusively in the
House of Representatives, but Senate may propose or concur with amendments
(Article VI, Section 24).
o Principles, procedures and limitations on appropriations (Article VI, Section 25)
o Veto power of the President on particular item or items in an appropriation,
revenue, or tariff bill (Section 27 (2))
o Limitation on payment of appropriations (Section 29 (1))
o Assignment of highest budgetary priority to education and ensuring that teaching
will attract and retain its rightful share of the best available talents through
adequate remuneration and other means of job satisfaction and fulfillment (Article
XIV, Section 5 (5))
 o General Appropriations Act represents the official budget of the national
government, including its budgetary support to government owned and controlled
corporations.

BORROWINGS AND PUBLIC DEBT

o 1987 Philippine Constitution, Section 20, Article VII. This gives authority to the
President to contract or guarantee foreign loans on behalf of the Republic of the
Philippines with the prior concurrence of the Monetary Board, and subject to such
limitations as may be provided by law.
o 1987 Philippine Constitution, Section 21, Article XII. Aside from ensuring that
foreign loans can only be incurred through monetary authority, this also gives
prime importance on public access to information on these loans.
o Foreign Borrowings Act (R.A. 4860) dated September 8, 1966, as amended by
Presidential Decree No. 1939. This law authorizes the President to obtain foreign
“loans for economic development as well as to guarantee foreign loans and/or
bonds incurred by government-owned and controlled corporations.
o P.D. No. 1177, Section 31, Automatic Appropriations (July 30, 1977). Now
incorporated in Article VI. Section 24 of the 1987 Administrative Code. A
Presidential Decree that prioritizes debt servicing which assures creditors of
regular and updated debt payments at all times.
o Bangko Sentral ng Pilipinas (BSP) Circular No. 1389 dated 13 April 1993, as
amended (Part Two, Chapter I) which provides, among other things, that foreign
borrowings of the public sector need prior BSP approval except short term
Foreign Currency Deposit Unit (FCDU) loans specified under Section 24.4 of
Circular No. 1389.
o The Philippine BOT Law (Republic Act No. 7718), July 26, 1993,An Act
amending certain Sections of Republic Act No. 6957, entitled An Act Authorizing
the Financing, Construction, Operation and Maintenance of Infrastructure
Projects by the Private Sector, and for other Purposes. This allows private
sectors to finance, construct, operate and maintain priority projects included in
the development programs of all concerned government agencies including
government-owned and controlled corporations and local government units.
o Official Development Assistance (ODA) Act of 1996 (Republic Act 8182 as
amended by Republic Act 8555), an act excluding official development
assistance from the foreign debt limit in order to facilitate the absorption and
optimize the utilization of ODA resources, amending for the purpose paragraph 1,
Section 2 of Republic Act No. 4860, as amended. The ODA Act of 1996 provides
that only projects that promote Economic development and welfare of developing
countries and that it is concessional in character and which contains a grant
element of at least 25 percent (calculated at a rate of discount of 10 per cent)
shall be financed.
ACCOUNTING AND AUDITING

o 1987 Constitution of the Philippines (Part D, Article IX) mandates the keeping of
government accounts, the promulgation of accounting rules, the audit of financial
reports, and the submission of reports covering the Government‘s financial
operations and position.

o State Audit Code (Presidential Decree No. 1445, promulgated on 11 June 1978)
codifies all existing laws on government auditing and outlines the organization of
the Commission on Audit. It specifies COA‘s powers and responsibilities which
include prescribing accounting and auditing rules and regulations whenever the
reporting requirements of the Budget Commission pursuant to a budget law
affect accounting functions; regulating the requirement for, and the submission of
accounting reports; etc.

o Administrative Code of 1987 embodies the major structural, functional and

procedural principles and rules of governance (Provisions on the Commission on
Audit is on Subtitle B, Title I of Book No. V).

o 1977 Budget Reform Decree (Presidential Decree No. 1177) defines

―government‖ as being the national government, including the Executive, the
Legislature, the Judiciary and the Constitutional Commissions.

o Delineating Primary and Joint Responsibilities of Government Wide Service

Agencies and Establishing the Mechanism Thereof (Presidential Decree No.
1376), specifying the primary responsibilities of government-wide service
agencies with respect to the following activities: Audits, Management
Consultancy, Training, Debt Recovery, Accounting and Staffing.

OTHER SOURCES OF LAWS ON PUBLIC FISCAL ADMINISTRATION:

ADMINISTRATIVE ISSUANCES
Administrative issuances may be relied upon in interpreting the provisions of the
laws. They are signed by the Heads of Agencies concerned or their duly
authorized representative which come in the form of Memorandum Orders,
Circulars, and administrative decisions in pursuance of a quasi-judicial function of
an agency.

CASE LAW
In the Philippines, Supreme Court decisions form part of the law of the land. As
such, decisions by the Supreme Court in the exercise of its power to review,
revise, reverse, modify or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and orders of lower courts cases involving
the legality of any decision of the agencies concerned are adhered to and
recognized as binding interpretations of Philippine law.
DECISIONS OF THE COURT OF APPEALS (including the Court of Tax Appeals on
taxation matters) which have become final and executory are also recognized
interpretations of Philippine law.

ORGANIZATIONS INVOLVED IN PUBLIC FISCAL ADMINISTRATION

The following organizations play central roles in public fiscal administration in the
Philippines:

a.       Department of Finance (DOF) is responsible for the government‘s fiscal policies
in coordination with other concerned public subdivisions, agencies, and
instrumentalities; managing the financial resources of government; supervising the
revenue operations of all LGUs; reviewing, approving and managing all public sector
debt; and rationalizing, privatizing and ensuring the public accountability of corporations
and assets owned, controlled or acquired by the Government (under Executive Orders
127, 127-A and 292). The DOF supervises the following bureaus, agencies and
corporations:

 Bureaus
o Bureau of Internal Revenue (BIR)
o Bureau of Customs (BOC)
o Bureau of the Treasury (BTr)
o Bureau of Local Government Finance (BLGF)

 Agencies and Corporations

o Insurance Commission (IC)
o National Tax Research Center (NTRC)
o Central Board of Assessment Appeal (CBAA)
o Philippine Deposit Insurance Corporation (PDIC)
o Philippine Export-Import Credit Agency (PHILEXIM)

b.      Department of Budget and Management (DBM) is responsible for the design,
preparation and approval of the accounting systems of government agencies. It is also
responsible for coordinating and implementing the annual budget process and manages
the process of cash disbursement. It monitors compliance with appropriations.

c.       National Economic and Development Authority (NEDA), as mandated by the

Philippine Constitution, is the country‘s independent economic development and
planning agency.

d.      Commission on Audit (COA) examines and audits the general accounts of the
Government, promulgates accounting rules and regulations, and presents the annual
financial report of the government, its subdivisions, and agencies (including government
-owned or controlled corporations).

e.       Bangko Sentral ng Pilipinas (BSP) is established as the country‘s central

monetary authority.
PHILIPPINES PFM REFORMS
 Medium-Term Expenditure Framework
 Organizational Performance Indicator Frameworks
 Sectoral Efficiency and Effectiveness Reviews
 Rationalization of major policies on procurement, accounting, budgeting, and
(initial wave of) IT application to improve public expenditure management
outcomes
 RA No. 9184 (Procurement Law) and IRR; Creation of Government Procurement
Policy Board (GPPB)
 New Government Accounting System (NGAS)
 World Bank Supported Diagnostic (PEFA) Assessment
 Development of the Philippine PFM Roadmap
 Government Integrated Financial Management Information System (GIFMIS) as
the technical centerpiece of the PFM Reform.
 Unified Accounts Code Structure (UACS): A single language for all transactions
 Treasury Single Account to support the government’s enforcement of the “One-
Fund Concept”.
 BTMS: Linking Budget Execution and Treasury Management
 Integrated Solution for Human Resource Management
 Capacity Building: Creation of the Philippine PFM Competency Model to improve
standards suitable for recruitment, selection, training, performance management
and career progression in Public Fiscal Management.

References:

1987 Philippine Constitution

Bastable, Charles F. (1917). Public Finance, 3rd Edition. Macmillan and Company, Ltd.
Retrieved from http://www.econlib.org
Briones, Leonor M. (1996). Philippine Public Fiscal Administration. Fiscal Administration
Foundation, Inc.
Catli, Roberto B. (2013). Public Fiscal Administration. Polytechnic University of the
Philippines Open University, Sta. Mesa, Manila
Commission on Audit (1999). Looking Back, Moving Forward (the Story of the
Commission on Audit). COA
Hunter, Merlin Harold. (1921). Outlines of Public Finance. Harper & Brothers. Retrieved
from http://chestofbooks.com
Musgrave, Richard A. & Peggy B. Musgrave. (1989). Public Finance in Theory and
Practice, 5th Edition. McGraw-Hill International Book Company
Plehn, Carl C. (1902). Introduction to Public Finance. London. Macmillan & Co. Ltd.
Retrieved from http://chestofbooks.com
Samuelson, Paul A. and William D. Nordhaus. (2001). Economics, 17th Edition. The
McGraw-Hill Companies.
Todaro, Michael and Stephen Smith. (2006). Economic Development. Pearson
Education, Inc.