Old or New Public Finance? A Plea for the Tried and True

Abstract

The traditional discipline of public finance had originally been the core of political economy. Over the past three decades, however, it has been redefined by leading scholars as the new public finance or public economics. At the same time, economics as a scholarly discipline has experienced a precipitous decline in relevance, and this has prompted many university administrators to abolish programs in public finance. Recent awards of the Nobel Prize in economics went to James M. Buchanan and William Vickrey, both innovative professors of traditional public finance. Although not ignoring the accomplishments of the new public finance, this article focuses on the traditional message of public finance as a discipline that allows scholars to communicate with policy makers. The canons of taxation and the emphasis on focusing on the social question are identified as the main tenets of public finance proper.