Viability of the Political System: A Neglected Issue in Public Finance

A classic statement of the pure theory of public finance was formulated circa 45 years ago by Richard Musgrave (Musgrave 1959 Musgrave, Richard. 1959. The Theory of Public Finance. New York: McGraw/Hill. [Google Scholar]). He conceptualized the role of public finance as falling into three primary functions of government: (a) to provide for public goods, (b) to provide for an equitable distribution of income, and (c) to stabilize the economy. In its simplicity, this tripartite division “has been invaluable” and remains the “gold standard” in economics to this day. But is something missing? The author argues that we badly neglect distribution.