Public Budgeting, Essay Example

“Public budgeting shares the characteristics of all budgeting.  It makes choices between possible expenditures, it has to balance, and it has a decision-making process (Stillman 2010).”  Public budgeting supplies several significant purposes within the government.  For example, budgets can be viewed as a legal contract that identifies an individual and/or an organization’s goals and objectives.  Also, a budget can be viewed as a political document that reveals concluding funds for a desired project.

Nevertheless, significant differences exist between public and private firm budgeting.  A huge distinction between public and private firm budgeting, is the motivation within final budget decisions.  “The private sector is characterized by the profit motive, whereas government undertakes many things that are financially unprofitable (Lee, et. al2008).”  In essence, private firms are constantly basing their final budget on how a particular motive can benefit the company on a short-term profit.  Public firms are constantly focusing on the “next big thing,” that can cause attraction to their company, and raise short-term profits.  Whereas, public budgeting focuses on benefiting in a long-term aspect.  Also, focuses on valuable ways to improve the government, as well as the citizens.  Sometimes, in public budgeting, profit isn’t a factor, however finding ways to improve the government in a beneficial way, on a financial plan.

Exceptions to this generalization are government activities that yield revenues.  State control and sale of alcoholic beverages, whether undertaken for profit or for regulation of public morals, can be evaluated, like any other business, in terms of profit and loss (Lee et. al 2008).

In essence, public budgeting focuses on ways to improve the government as a whole, whether it is long term or short term.  Also, public budgeting isn’t based on increasing profit.  It is a nonprofit able financial plan that is created that won’t harm the government’s funds; yet still improve the government as a whole.  However, private firm budgeting is a financial method that is used to benefit a company in a profitable way.

References

Lee, et. al. (2008).  Public Budgeting Systems.  New York: Jones and Barlett Publishers, Inc.

Stillman, R. J. (2010). Public administration: Concepts and cases (9^th ed.). Boston: Wadsworth. (p. 1-494). ISBN: 978-0-618-99301-7.