Our task in this chapter, therefore, is to extend the economic principle of efficient resource use to the public sector. Some believe this to be a hopeless task and hold that the determination of budget policy is a matter of politics only, amenable to economic analysis, a view that is unduly pessimistic. Budget policy has a difficult task and will hardly realize a perfect solution. But not all feasible policies are equally good. Efficiency of resource use, here as in the private sector, is a matter of degree, and economic analysis can help us in seeking the best answer, The task is to design a mechanism for the provision of social goods which operating in a democratic setting will be as efficient as is feasible. The politics of fiscal policy and the inefficiencies which may ensure are considered in Chapter 7.