public spending
Introduction
Public expenditure is the total expenditure made by the public sector of the State, in the acquisition of goods and services. In a market economy, the primary destination of public spending is the satisfaction of collective needs, while public expenditures intended to satisfy public consumption are only produced to remedy market deficiencies.[1] Public transfer expenditures aimed at achieving a redistribution of income and wealth are also of noteworthy importance.[2][3].
Expenditure authorization
The authorization of public expenditure is the legal instrument that allows the official to previously approve the expense that must be canceled by the administration and then be reflected in the accounting, by virtue of which, the competent authority agrees to carry it out and manages an expense charged to a credit, determining its amount in a certain way or in the most approximate way possible, when it cannot be done in a certain way, reserving, for this purpose, all or part of the budgeted credit. This act does not yet imply a relationship without interested parties outside the entity, but it implies the implementation of the administrative process.[4].
Public spending: includes those goods and services acquired by the Public Administration, either for consumption (office supplies, security and cleaning services...), or as an investment element (computers, road construction, hospitals...). It also includes the payment of salaries to officials.[5].
It does not include, however, pension spending: when you pay a salary to an official you buy a service, their work (there is an economic transaction), while when you pay a pension it is simply a transfer of income (you do not receive anything in return), so it is not counted in the GDP.
Expenditure incidence
The expenses incurred by the government are diverse in nature. They range from meeting your immediate obligations such as the purchase of a good or service to covering obligations incurred in previous fiscal years. However, many of them are aimed at a certain part of the population to reduce the margin of inequality in income distribution.
Therefore, knowing how the money from the public budget is spent is essential and healthy, since through this spending we know who is being helped directly and indirectly. In this section you will find various documents that shed light on how public money is spent. Furthermore, according to the Keynesian model, there is a mechanism known as the "spending multiplier" by which the economic returns of a certain amount of spending exceed the amount spent, via reactivation of economic activity.[6].