Public and Local Administration Lecture Notes PDF
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Benha University
Dr/ Hend Awad Mahmoud
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Summary
These lecture notes cover various topics related to public administration and finance, including public financial management, decision-making processes, and different types of budgets and taxes. The material focuses on the principles and dimensions of public budgets and decision models.
Full Transcript
Public and Local Administration Lecture Five Dr/ Hend Awad Mahmoud Chapter Three Public Financial management and Decision Making Topic One The importance of public financial management systems ❑ Public finance is important for democratic...
Public and Local Administration Lecture Five Dr/ Hend Awad Mahmoud Chapter Three Public Financial management and Decision Making Topic One The importance of public financial management systems ❑ Public finance is important for democratic governance, macro- economic stability, effective use of resources. ❑ Financial systems in public sector prevents corruption and foster effectiveness. It is crucial for the development of a nation as it deals with taxation and expenditure of different civil organizations. ❑ It plays a vital role in acquiring the financial resources needed by an economy to achieve its social welfare. Topic Two The Principles of public financial management design 1. Democratic consent: taxation and spending should not be done without the explicit consent of the government. 2. Equity: governments should be equitable treat people in similar circumstances. 3. Transparency: what governments do in spending funds should be open to public knowledge. Topic Two The Principles of public financial management design 4. Probity: public administrators must be honesty in dealing with public funds. 5. Prudence: these stewards (public administrators) should not take risks with public funds. 6. Accountability: those who deal with public funds should be regularly called to account through legislative review and audit processes. Topic Three Public budget dimensions 1. It is a political instrument, that allocates scarce public resources among the social and economic needs. 2. It is a managerial instrument, that specifies the ways and means of providing public programs and services. 3. It is an economic instrument, that can direct the economic growth and development. 4. It is an accounting instrument, that holds government officials responsible for the expenditure of the public funds. Topic Five Budget Types Operating budget Capital Budget This is a short-term plan deals with planning for for managing the large expenditures for resources capital items. It should be for long-term investments It is developed for each It is typically cover 5- to fiscal year, with changes 10-year periods and are made, as necessary. updated yearly. Topic Six Financing public expenditures ❑ There are three basic elements to public financial management: (1) taxing, (2) spending, and (3) saving. ❑ Taxing and spending are the essential elements of public finance. ❑ Taxation as the most preferred revenue source for two reasons are, 1) governments cannot print as much money as they want, and 2) borrowing money either from its citizens or from foreigners requires that the market rate of interest be paid on the funds. Topic Six Financing public expenditures The Tax Types There are three main types of taxes are, (1) Individual and corporate income taxes. It refers to taxes levied on the income individuals earn from wages, salaries, and some forms of investment. It has two main forms are, Topic Six Financing public expenditures The Tax Types Individual and corporate income taxes forms progressive tax regressive tax It claims a larger proportion of an It has the opposite effect, it takes a individual’s gross income at higher higher proportion of the gross income income levels than at lower levels, of those at lower rather than higher this is based on the notion that those income levels, in other words it has a with a greater ability to pay should greater impact on lower-income pay more. individuals than the wealthy. Topic Six Financing public expenditures The Tax Types (2) Sales and use taxes ❑ It defined as taxes that levied on the sale and use of goods and services, it forms of consumption taxes. ❑ It considers as a percentage tax on the price of a sale that is collected by a merchant or consumer and remitted to the government. Topic Six Financing public expenditures The Tax Types (3) The internet sales tax ❑ It defined as taxation of sales transactions over the Internet. Topic Seven Decision making ❑ Decision making is defined as the process through which one optimal choice is made from several possible alternatives of solutions for a given situation that will ensure maximum benefit and least risk than the others which were not selected. ❑ In the other words it refers to choose the best alternative. Topic Eight Decision making Characteristics a) It is a goal-oriented process. b)It is an intellectual process as it is a product of reasoning, and evaluation. c) It is a dynamic process varying with the type of problem and available time. d)It is a situational in nature as the same decision cannot be taken in general for all situations. Topic Eight Decision making Characteristics E) Decisions have to be taken keeping in mind the environmental factors political, economic, geographical, social. F) It is a continuous and ongoing process one decision being followed by another one and so on. G) It cannot be fully objective because the psychological factors contribute to the choice of an alternative. H) A decision is usually made within the guidelines of an established policy. Topic Nine Decision making Process Topic Nine Decision making Models (1) The rational-comprehensive model ❑ The rational-comprehensive model, derived from the traditional managerial perspective on public administration. It is comprehensive and provides a good deal of direction in the choice of potential means to identified policy objectives. It encourages a public administrator to think a problem and apply his or her technical expertise in identifying the best solution. Topic Nine Decision making Models The rational-comprehensive model Steps (1)Determining objectives: a public administrator must determine the objectives of public policy. These objectives must be observed and better still measured. (2) Consider the means to achieve the objectives: a public administrator is required to try to project all the consequences of each of the means on all the various areas of governmental concern. Topic Nine Decision making Models The rational-comprehensive model Steps (3) Choose the best alternative: Once all the potential means for achieving an end are identified, it is necessary to choose among them. According to the traditional managerial approach, this choice should be made to maximize efficiency, economy, and effectiveness. Topic Nine Decision making Models 2. incremental model of decision making ❑ The incremental model of decision-making comports with the political approach to public administration. ❑ It emphasizes the need for public administrators to be responsive to the political community, to be politically representative. Topic Nine Decision making Models 2. incremental model of decision-making Steps (1)Redefining the ends: Means and ends are not treated as distinct from one another. the ends of government policy are often defined by the means which be available. (2) Arriving at a consensus: a good decision must be consensus with the. In this sense, representativeness and responsiveness dominate efficiency, economy, and effectiveness as the values to be sought in choosing means. Topic Nine Decision making Models 2. incremental model of decision-making Steps (3) Making a satisfactory decision: In the process of incremental decision making, analysis tends to be more limited than it is in the rational- comprehensive approach, and it is required little, or no effort is made to reach an optimum decision.