Scope and power of government
In the study of public finance, students come across several concepts which expose them to the scope and power of the government. For one, students learn about societies and their operation to appreciate the context in which government plays a role. They realize that society is made up of different groups such as family, professional associations, non-profit organizations, religious groups, private companies, political entities and the state. They also learn that the state is the most powerful of those groups. Some societies, often described as organic societies, see executive government as the heart of the society. Government assumes a role that is greater than that of its people with the implication that it could act as it wishes and those actions should not be questioned. Respect for the rule of law is often biased and corruption is endemic where government expenditure represents a high level of gross domestic product (GDP). This large economic input into the economy is often accompanied by the use of state resources to scuttle criticism, squash competition, and disseminate propaganda through controlled media. Under those circumstances, the taxing and spending activities of government tend to serve more of a political rather than an economic welfare purpose.
At the other extreme is the mechanistic society wherein the individual, and not the government, assumes greater importance. While government is seen as being able to do good things, that role is often thought to be most useful in the provision of public goods and services which private markets cannot produce efficiently. National defence, public safety and protection, judicial services, public education, public health and care of public parks are typical activities that are regarded as acceptable roles of government. Periodically, the state is urged to distribute or redistribute resources in order to meet some welfare economic purpose. The provision of subsidies to producers or the reduction of taxes helps to expand economic activity and create jobs and enable more people to participate in the economy. The allocation of resources to vulnerable groups
