Question

Why do public budgets promote efficiency and effectiveness?

Answer 1

Based on the degree of evolution attained by the individual, culture, politics and economy, the public budgeting process has undergone a thorough transformation. Although a budget was primarily an instrument used to mean how much a state would receive Western societies as revenue until the seventeenth century since the conquest of the right to tax with the implementation of the Magna Carta in 1215, from the seventeenth century onwards it became an instrument indicating how much a state would spend alongside precise estimates of revenue to be received. In line with the then pre-eminent vision of a neutral, objective state, which is solely responsible for providing a full range of products and services to the public sector, the traditional budgetary structure was embraced and practised during this time.

Present fiscal frameworks put less priority on expense reductions, but instead rely more on cost-effectiveness and cost-effectiveness. This position involves researching what a casual citizen receives from the service as a benefit, rather than evaluating the real cost of a service in detail. However, the examination of costs under resource limitations is more related to how the greater gain can be achieved relative to the expense.

Indeed, in most situations, there is scope for a policy to be adopted at the risk of compromise in the fields of quality and quality security, resilience and gender mainstreaming. For this purpose, in order to encourage a thorough and homogeneous understanding of the term, there is a need to broaden the definition and contextual representation of results in order to include, in addition to thrift, competitiveness and effectiveness, budget-driven externalities such as gender mainstreaming, resilience and engagement, as accommodated by the principle of efficacy. Efficiency, as an umbrella word, should also be best defined as cost-effectiveness instead of cost-effectiveness.