In page navigation

Benefit principle

By:
Updated: Aug 20, 2021

The principle that the cost of public expenditures should be met by those who benefit from them. This is an alternative to the ability to pay principle. The benefit principle faces several difficulties in application. There may be groups judged as needy of government support because they do not have the earning power to be self-sufficient. By definition, the benefit principle cannot be applied in this case. Benefits may also be very difficult to measure, especially for non-excludable public goods where there is no revelation of preferences.

Reference: Oxford Press Dictonary of Economics, 5th edt.


Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.