Capital charges and capital expenditure decisions in core government

Abstract

The application of capital charges to core government agencies (those which produce tax-financed outputs) is one of a number of steps being taken by certain governments as part of a broader strategy to place such agencies upon a market footing. Capital charging involves the levying upon these agencies of charges designed to reflect the cost of the capital which they employ. This article presents a theoretical evaluation of capital charging which identifies the manner in which imperfect information, uncertainty and the expenditure control imperative undermine the system’s raison d’être.

Citation

Robinson, M. (1996), "Capital charges and capital expenditure decisions in core government", Journal of Public Budgeting, Accounting & Financial Management, Vol. 10 No. 3, pp. 354-374. https://doi.org/10.1108/JPBAFM-10-03-1998-B002