Postprint version. Published in Constitutional Political Economy, Volume 8, Issue 2, June 1, 1997, pages 151-163. Copyright © 1997 Springer. The original publication is available at http://dx.doi.org/10.1023/A:1009016509573.
Our fiscal process divorces payment from use. While this divorce has led many analysts of government to separate discussion of public expenditures from their funding, or use from payment, we argue that this approach does not provide a useful framework for understanding our public choices. We argue that it is the divorce of payment from use that underlies our fiscal process and, rather than simply 'dismiss out of hand ' study of our fiscal process, it should be an integral part of our study of government. Our framework for describing fiscal institutions indicates how our fiscal process invites rent-seeking because it allows beneficiaries of programs to avoid payment for those programs. We conclude by examining how various changes in the fiscal process may influence our public choices.