¹ See Buck, A. E., Public Budgeting (New York, 1929)Google Scholar; Sundelson, J. Wilner, Budgetary Methods in National and State Governments (New York State Tax Commission, Special Report No. 14, 1938)Google Scholar; ibid., “Budgetary Principles,” Political Science Quarterly, Vol. 50, pp. 236–263 (1935).

² Robbing, Lionel, An Essay on the Nature and Significance of Economic Science (2nd ed., London, 1935), p. 16.Google Scholar

³ If the old saying that the state fixes its expenditures and then raises sufficient revenues to meet them were literally true, the budget officer would not be faced by a problem of scarcity. However, there is almost invariably a problem of scarcity in the public economy—to which all budget officers, besieged by spending departments, will testify.

⁴ See Buck, op. cit., Chap. 11.

⁵ The development of standards for the evaluation of the efficiency of performance of particular functions—entirely apart from the value of the functions—is as yet in a primitive stage. Such standards, for budgetary purposes at least, require cost accounting, which implies a unit of measurement. A standard of comparison is also implied, such as the performance of the same agency during prior fiscal periods, or the performance of other agencies under like conditions. In the absence of even crude measurement devices, budgetary and appropriating authorities are frequently thrown back upon the alternative of passing on individual items—three clerks, two messengers, seven stenographers, etc.—a practice which often causes exasperation among operating officials. Although our knowledge of budgetary behavior is slight, the surmise is probably correct that questions of the efficiency of operation in achieving a particular end are generally hopelessly intermingled with the determination of the relative value of different ends. Operating officials often shy away from experimentation with devices of measurement, but it may be suggested that measures of the efficiency of performance should tend to divert the attention of budgetary and appropriating officials from concern with internal details to the pivotal question of the relative value of services.

⁶ See, for example, H. L. Lutz, Public Finance.

⁷ A Study in Public Finance (London, 1928), p. 50. See also Seligman, E. R. A., “The Social Theory of Fiscal Science,” Political Science Quarterly, Vol. 41, pp. 193–218, 354–383 (1926)CrossRefGoogle Scholar, and Colm, Gerhard, “Theory of Public Expenditures,” Annals of the American Academy of Political and Social Science, Vol. 183, pp. 1–11 (1930).CrossRefGoogle Scholar

⁸ For a review of the literature, see Walker, Mabel L., Municipal Expenditures (Baltimore, 1930), Chap. 3.Google Scholar

⁹ In this connection, see Wooddy, C. H., The Growth of the Federal Government, 1916–1935 (New York, 1934).Google Scholar

¹⁰ In the field of state finance, a valuable study has been made by Labovitz, I. M., in Public Policy and State Finance in Illinois (Social Science Research Committee, University of Chicago. Publication pending).Google Scholar

¹¹ See Hayek, F. A. von (ed.), Collectivist Economic Planning (London, 1935).Google Scholar

¹² Dickinson, H. D., “Price Formation in a Socialist Community,” Economic Journal, Vol. 43, pp. 237–250.CrossRefGoogle Scholar See also, Durbin, E. F. M., “Economic Calculus in a Planned Economy,” Economic Journal, Vol. 46, pp. 676–690 (1936)CrossRefGoogle Scholar, and Sweezy, A. R., “The Economist in a Socialist Economy,” in Explorations in Economics; Notes and Essays Contributed in Honor of F. W. Taussig (1936), pp. 422–433.Google Scholar

¹³ Taylor, F. M., “The Guidance of Production in a Socialist State,” American Economic Review, Vol. 19, pp. 1–8 (1929).Google Scholar

¹⁴ Op. cit., p. 238. Of Soviet Russia, Brown and Hinrichs say: “In a planned economy, operating if necessary under pressure to accomplish a predetermined production, the decision with regard to major prices is essentially a political one.” “The Planned Economy of Soviet Russia,” Political Science Quarterly, Vol. 46, pp. 362–402 (1931).

¹⁵ Clark, J. M., Economics of Planning Public Works (Washington, Government Printing Office, 1935)Google Scholar; Gayer, A. D., Public Works in Prosperity and Depression (New York, National Bureau of Economic Research, 1935).Google Scholar See also the essay by Leland, Simeon E. in National Resources Committee, Public Works Planning (Washington, Government Printing Office, 1936).Google Scholar

¹⁶ Criteria and Planning for Public Works (Washington, National Resources Board, mimeographed, 1934). See especially pp. 165–168.

¹⁷ National Resources Committee, The Future of State Planning (Washington, Government Printing Office, 1938), p. 19.Google Scholar Mr. J. Reeve has called my attention to the fact that the problem of allocation of public expenditures has come to be more difficult also because of the increasingly large number of alternative purposes of expenditure.

¹⁸ For an approach to the work of the Water Committee in terms somewhat similar to those of this paper, see National Resources Committee, Progress Report, December, 1938, pp. 29–36.Google Scholar For an example of the work, see National Resources Committee, Drainage Basin Problems and Programs, 1937 Revision (Washington, Government Printing Office, 1938).Google Scholar

¹⁷ See Logan, E. B., “Group Pressures and State Finance,” Annals of the American Academy of Political and Social Science, Vol. 179, pp. 131–135 (1935)CrossRefGoogle Scholar, and McKean, Dayton David, Pressures on the Legislature of New Jersey (New York, 1938), Chap. 5.Google Scholar

²⁰ This matter is really another facet of the problem of the determination of the “public interest” with which E. P. Herring grapples in Public Administration and the Public Interest.

²¹ For such studies, useful methodological ideas might be gleaned from Professor Schattschneider's Politics, Pressures, and the Tariff.

²² Helpful comments by I. M. Labovitz and Homer Jones on a preliminary draft of this paper are hereby acknowledged.