Since it was first published in 1978 Public Sector Economics has become the most widely adopted undergraduate textbook in its field. In that time public sector economics has continued to grow rapidly in theoretical and empirical work; government expenditure has been reformed and new taxes have been introduced. There has also been a significant ideological shift against the public sector in most industrial economies.

To accommodate these changes the authors have made major revisions to this fourth edition while preserving the central objective of the book which is to explain the relevant principles and the relationships between public expenditure, taxation and the behavior of economic agents such as individuals, households and firms.