Public Finance in Developing Economies, Volume 2

Public finance affects developing economies in many different ways. However, also public finance policies do affect key sectors of the economy in many different ways. This is true especially that the economic problems facing the developing countries are extremely difficult to address due to the declining fiscal capacity. It can be highlighted that most developing economies should bring public expenditure closely to the public revenue to ensure that fiscal deficits are in tandem with other macroeconomic objectives and policy direction. Experience has shown that public finance policy reforms in most developing economies have not corrected the free market failures. In real terms, public finance policies should be designed on the basis of promoting a stable economic growth and development. It can be argued that there is a greater desire among the developing countries to increase their productivity so that the people can attain substantially a better quality of life.Particularly, in most developing economies fiscal space and how to achieve sustainability remains a major challenge to public finance. Public finance is an important sector of finance and economics for the entire spectrum.