Public finance and public policy in the new century

Purpose and Dedication This book of essays and commentaries has been especially written to celebrate Richard Musgrave’s ninetieth birthday and to commemorate the tenth anniversary of CES, the Center for Economic Studies at the University of Munich. In an eloquent tribute, Henry Aaron characterizes Richard Musgrave as the midwife of modern public economics.

He reviews Musgrave’s celebrated branches of government—allocation, distribution, and stabilization—as well as his analytically useful distinction of three kinds of incidence: balanced budget, differential, and specific. However, he reserves his most laudatory remarks for the intellectual tradition, going back to Adam Smith, in which Musgrave has chosen to place his contributions to economics.

That tradition treats economics as derived from moral philosophy and views government as an instrument that can be used to help establish the good society. This stands in contrast to the individualistic framework within which much of modern economic analysis, stripped of all institutional context or relevance, is being undertaken.

Aaron believes that Musgrave’s successors will be impoverished if they do not recapture the intellectual breadth and seriousness of purpose to which Richard Musgrave’s life and work stand as eloquent testimony. David Bradford pays tribute to CES, the tenth anniversary of which fell within a month of Richard Musgrave’s ninetieth birthday and which therefore organized the event.

Richard Musgrave is not only a former student of the University of Munich but also one of the founding fathers of CES. He has participated in the scientific advisory Council of CES from the very first moment and has helped shape the structure of CES throughout the years, including the foundation of the CESifo network. It made sense to celebrate the two ‘‘birthdays’’ together, summing the ages of the laureates to one hundred.

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