User:Nick Gardner /Sandbox
Public expenditure can be thought of as the expression of the transfer of freedom of choice from individuals to government. The concept of a political system under which the people delegate powers to the state on condition that it uses those powers in their interest was put forward in the 17th century by John Locke [1], and the actions to be undertaken in the exercise of those delegated powers were described by Adam Smith in the 18th century as "erecting or maintaining those public institutions and those public works, which, although they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could not repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain."[2]. The concept was further developed in the 19th century by John Stuart Mill, who termed it "Representative Government" [3].
Akerlof G. (1970), "The Market for Lemons: Quality Uncertainty and the Market Mechanism", Quarterly Journal of Economics 84, 488-500. [1] (Google abstract)
- ↑ John Locke On Civil Government
- ↑ Adam Smith: An Inquiry into the Nature And Causes of the Wealth of Nations, Book 5, Chapter 1, Part 3, (first published 1776)
- ↑ John Stuart Mill Representative Government
- ↑ Kenneth Arrow: Uncertainty and the Welfare Economics of Medical Care. American Economic Review, December 1963