Tqm's two core principles are _____

Public Administration: An Introduction

Marc Holzer, PhD Dean and Board of Governors Professor School of Public Affairs and Administration Rutgers University – Newark, New Jersey

Richard W. Schwester, PhD Associate Professor John Jay College of Criminal Justice The City University of New York (CUNY)

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Holzer, Marc. Public administration : an introduction / by Marc Holzer and Richard W. Schwester. p. cm.

Includes bibliographical references and index. ISBN 978–0–7656–2120–7 (pbk) 1. Public administration. 2. Public administration—Decision making. 3. Policy

sciences. I. Schwester, Richard Wilmot, 1977– II. Title.

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iiiPublic Administration: An Introduction

About the Authors

Marc Holzer Dean Holzer (MPA, PhD University of Michigan) is Dean of

the School of Public Affairs and Administration, and Board of

Governors Professor of Public Affairs and Administration,

at Rutgers University's Newark Campus. He is a Fellow of

the National Academy of Public Administration and a Past

President of the American Society of Public Administration.

Since 1975, he has directed the National Center for Public

Performance, and he is the founder and editor-in-chief of the

journals Public Performance and Management Review and Public Voices, and is the co-founder/co-editor of the Chinese Public Administration Review. He has also recently founded the Public Performance Measurement and Reporting Network. His

research, service, and teaching has been honored by awards from the National

Association of Schools of Public Affairs and Administration, the American Society

of Public Administration, and the Chinese Public Administration Society. He has

published well over one hundred books, monographs, chapters and articles.

Richard W. Schwester Professor Schwester (MA, PhD Rutgers University) is an

Associate Professor at John Jay College of Criminal Justice at

the City University of New York. His research interests include

the use of technology in government, e-government, prison

privatization, critical incidents, and inter-local shared serv-

ices. Some of Professor Schwester’s most recent work appears

in Public Budgeting and Finance, Public Performance and Management Review, Public Administration Quarterly,

International Journal of Public Administration, and the International Journal of Organization Theory and Behavior.

iv PREFACE

We have written a textbook that is distinct from the dozens of public administration

texts now in the academic marketplace. Our vision is a unique blend of substance

and style—a text that is both informative and enlivening, capturing the evolving na-

ture of the field.

A unique aspect of this volume vis-à-vis other textbooks is the extensive use of

visuals. Artwork depicts bureaucratic issues, reinforcing each chapter’s themes

and creating an informative and aesthetically engaging textbook. Charts, graphs,

diagrams, and illustrations add dimensions to the text’s overviews of public

administration.

Of course, this text covers the traditional, essential elements of public administra-

tion such as organizational theory, human resource management, leadership, pro-

gram evaluation, budgeting, and the politics of public administration. But it strives

to do so in a contemporary way, addressing, for example, the changing role of in-

tergovernmental relations in Chapter 6, including the federalist structure as well

as interlocal shared services and regional consolidation initiatives.

Public performance is treated as an indispensable subfield of public administra-

tion. Chapter 7 is devoted to performance-related topics such as knowledge shar-

ing and training, total quality management, performance measurement, and the

social aspects of organizational performance. Although these topics may be present

throughout traditional texts, they are usually scattered over several chapters, un-

deremphasizing the importance of public performance. Given the current economic

climate, a focus on efficiency and effectiveness is increasingly important in the field

of public administration.

The emergence of e-government and the growing role of technology in public ad-

ministration are introduced in Chapter 12. Technology has and will continue to

change the way we interact and transact business with government on a daily

basis. This chapter delves into emerging technologies of knowledge management,

Geospatial Information Systems (GIS), the use of Internet applications as par-

ticipatory and service delivery media, 311 call centers, and computer mapping

programs.

As a departure from the more orthodox model typical of other texts, Chapter 13 of

this book examines the field of public administration and public service through

the lens of popular culture. Countering the all-too-common image of bumbling bu-

reaucrats, this chapter demonstrates that dedicated public servants add a great deal

of value to the services government has promised its citizens. This chapter also pro-

vides helpful resources for people interested in engaging with government and pro-

fessional networks that address critical quality-of-life issues.

PREFACE

vPublic Administration: An Introduction

Each chapter is complemented by key terms and supplementary readings. Beyond

those “standard” resources that are present in any introductory text, video cases

and simulations offer a gateway to engaging students, encouraging them to im-

merse themselves in virtual problem solving experiences—testing theory and skills

through real-time practical applications. Students are challenged to evaluate the

actions and decisions of public administrators and elected officials based on the

theoretical models and best practices provided in the specific chapter. These cases

focus on single and multisector issues that allow for the best collaborative thinking

of those students evaluating the problem. The simulations, also tailored to each

chapter topic, offer students a place to apply theory to practice in a decision-

making role rather than in an evaluative one as is with the case studies. Students

will deal with issues related to unemployment, budgeting, the environment, crime,

and education. These computer- and Internet-based learning tools allow students

to test their decision-making skills and to evaluate the results of those decisions in

a pure learning environment—applying theory to practice. All of the electronic re-

sources are free to the user—avoiding additional costs to students and represent-

ing a sample of similarly accessible resources on the Web, YouTube, and other

media outlets.

This text, then, is very much a dynamic learning system rather than a static vol-

ume. We expect that it will not only enliven the teaching of public administration

but will markedly improve the learning experience and help motivate students of

public service to become problem-solving public servants.

Our thanks to the team that helped us construct this text and whose research

and critiques improved it immensely: Dan Bromberg, Peter Hoontis, Iryna

Illiash, Jyldyz Kasymova, Anna Bolette Lind-Valdan, Emily Michaud, Yetunde

Odugbesan, and Ginger Swiston.

This book could not have been completed without the assistance of a number of

dedicated individuals. In particular, we wish to thank Harry Briggs, Elizabeth

Granda, Angela Piliouras, Stacey Victor, and Jim Wright.

vi TABLE OF CONTENTS

Public Administration: An Indispensable Part of Society . . . . . . . . 2 Government Requires Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 What Do We Get for All of These Resources?. . . . . . . . . . . . . . . . . . . . . . 13

How Government Is Organized to Deliver Services . . . . . . . . . . . . . . . . . 15

How Government Serves Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

What, Then, Is Public Administration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Key Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Organizational Theory and Management . . . . . . . . . . . . . . . . . . . . . . . 48 Theories of Managerial Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . 50 The Classical Management Movement . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

The Neo-Classical School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

The Human Side of Organizational Management . . . . . . . . . . . . . . . . . . 63

Contemporary Organizational Theories. . . . . . . . . . . . . . . . . . . . . 69

CHAPTER 1

CHAPTER 2

Table of Contents

viiPublic Administration: An Introduction

Structural Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Systems Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

W. Edwards Deming and Japanese Management . . . . . . . . . . . . . . . . . . 72

Organizational Economic Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Organizational Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

National Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Key Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Managing Human Resources . . . . . . . . . . . 84 Human Resources Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Productive Human Resource Management . . . . . . . . . . . . . . . . . . . . . . . 88

Cultivating and Maintaining a High-Quality Diverse Workforce . . . . . . . 91

Creating a Quality Work Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Electronic Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Public Decision Making . . . . . . . . . . . . . . . . 136 How Decisions Are Made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 The Nature of Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Theoretical Models of Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . 145

Dysfunctions in Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

CHAPTER 3

CHAPTER 4

viii TABLE OF CONTENTS

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

Politics and Public Administration . . . . 172 The Intersection of Politics and Administration . . . . . . . . . . . 174 Reform and Neutrality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

The Reality of Bureaucratic Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Checking Bureaucratic Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 Case Citations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Intergovernmental Relations. . . . . . . . . . 198 The Layers of Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 The Idea of Federalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Interlocal Shared Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

Improving Performance via Intragovernmental and Intergovernmental Competition . . . . . . . . . . . . . . . . . . . . . . . . . 208

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

CHAPTER 5

CHAPTER 6

ixPublic Administration: An Introduction

Public Performance. . . . . . . . . . . . . . . . . . . . 218 Improving Government Performance . . . . . . . . . . . . . . . . . . . . . 220 The Importance of Knowledge Sharing and Training. . . . . . . . . . . . . . . 220

Total Quality Management: Customer Focus and Responsive Public Organizations . . . . . . . . . . . . . . . . . . . . . . . . 221

Issues in Organizational Responsiveness . . . . . . . . . . . . . . . . . . . . . . . . 225

Measuring Performance to Improve Performance . . . . . . . . . . . . . . . . 232

The Role of Privatization in Government Performance. . . . . . . . . . . . . 251

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

Program Evaluation . . . . . . . . . . . . . . . . . . . 258 What is Program Evaluation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 How to Collect Empirical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

Conducting Evaluations and the Importance of Stakeholders . . . . . . . 266

Ethical Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

Public Budgeting. . . . . . . . . . . . . . . . . . . . . . . 288 Budgeting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

CHAPTER 7

CHAPTER 8

CHAPTER 9

x TABLE OF CONTENTS

The Federal Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Types of Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

Where Do Governments Get This Money? . . . . . . . . . . . . . . . . . . . . . . . 305

Theories of Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

Public-Sector Leadership . . . . . . . . . . . . . . 316 Leading People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Management Functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318

Prevailing Leadership Theories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

Types of Leadership Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346

Ethics and Public Administration . . . . . 348 Administrative Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 What Are Ethics? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350

Bureaucracy and Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354

Formal Rules and Bureaucratic Discretion. . . . . . . . . . . . . . . . . . . . . . . 363

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370

CHAPTER 10

CHAPTER 11

xiPublic Administration: An Introduction

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

Technology and Public Administration . . . . . . . . . . . . . . . . . 378 High Tech Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 Technology Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

The Network and Its Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384

Knowledge Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388

The Basics: Database Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388

Convergence and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391

The Connected Society: Trends and

Opportunities Facing Public Managers . . . . . . . . . . . . . . . . . . . . . . . 393

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415

Public Service and Popular Culture . . . . . . . . . . . . . . . . . . . . . . . . 416 Public Servants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 The Image of the Public Servant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420

The Real Public Servant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422

Capturing the Attention of Youth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434

Public Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438

CHAPTER 12

CHAPTER 13

xii TABLE OF CONTENTS

Networks and Professional Organizations . . . . . . . . . . . . . . . . . . . . . . . 439

Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447

The Future of Public Administration . . . . . . . . . . . . . . . . . 448 The Evolution of Public Administration. . . . . . . . . . . . . . . . . . . . 450 Governance Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450

Performance Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453

Citizen Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458

Globalization: The Internationalization of Public Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461

E-Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464

Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469

Key Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Supplementary Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474 Electronic Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475 Case Studies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475

CHAPTER 14

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476

xiiiPublic Administration: An Introduction

Public Administration: An Introduction

Public Administration: An Indispensable Part of Society

CHAPTER 1

This chapter introduces the reader to the foundational

elements of government and public administration. It reviews

many of the essential characteristics of government, such as

revenue collection, government expenditures, and government

workforce. It also presents an overview of the services that

government provides and how those services affect citizens

on a daily basis. Furthermore, this chapter constructs a

working definition of public administration and discusses key

concepts that are essential to the field.

2 CHAPTER 1

3Public Administration: An Indispensible Part of Society

“Management is the science of which organizations are but experiments.”

JOHN CONSTABLE English Romantic Painter

(1776-1837)

Postal Workers Mural

“Management is the science of which organizations are but experiments.”

JOHN CONSTABLE English Romantic Painter

(1776-1837)

Postal Workers Mural

“The care of human life and happiness… is the first and only legitimate object

of good government.”

THOMAS JEFFERSON Third President of the United States

(1743–1846)

Environmental Police Unit Officers with the Department of Sanitation of New York take precautions when dealing with hazardous waste.

4 CHAPTER 1

There is no question that government spends a great deal of money. And theoreti-

cally—just like any other organization—the government must make money before

it can spend money. So, where does government get its money and how does it

spend it? How does this process affect people on a daily basis? These are just some

of the questions we will answer in this introductory chapter.

Let’s start with the basics. Like all organizations, the government typically must

take in money before expending it. In rare situations, government can spend money

it did not collect; that will be discussed in Chapter 9, “Public Budgeting.” Unlike

organizations in the private or nonprofit sectors, government has the power to tax.

Taxation, one of the federal government’s constitutional rights under the founding

documents of the United States, is necessary to support the three branches of gov-

ernment, particularly the executive branch with its wide

array of functions. State constitutions extend that taxing

power to states, which then authorize counties, cities,

towns, villages, and special districts to levy taxes.

Governments are considered sovereign bodies, holding the

highest authority in a specific region; therefore, govern-

ment is granted unique powers under which it may imple-

ment its authority. Taxation is one of those unique powers.

Unlike companies, which make money by selling a product

or a service, the government takes in funds by taxing its cit-

izenry. These taxes are collected by local, state, and federal

agencies and pay for a broad range of services that meet

citizens’ daily needs. The nature of these needs will be dis-

cussed throughout this chapter, but first we will sketch out the amount of money

government spends on a yearly basis.

In 2007 (the latest year for which the actual state and local spending figures

were available at the time this book was written) the federal, state, and local

governments in the United States spent over $4 trillion. Federal spending rep-

resented about 63 percent of all spending by governments. The U.S. federal gov-

ernment spent about $2.7 trillion, and state and local governments spent about

$1.6 trillion.

To understand the impact that government spending has on the economy of the

United States, it is sometimes helpful to use economic terms. One often-used term

for gauging the nation’s economy is the gross domestic product (GDP). The GDP is

a measure based on the amount of goods and services produced within the borders

of the United States. There are numerous ways to measure this figure, but the most

straightforward is simply to add together the total amount of money spent on pro-

GOVERNMENT REQUIRES RESOURCES

“What made you choose this career is what made me go into politics—a

chance to serve, to make a difference. It is not just a job. It is a vocation.”

TONY BLAIR Prime Minister of