The term Public Economics came into existence only in 1960s however a few titleswith nomenclature such as Public Finance had already started covering much ground,which is today covered within realm of Public Economics.Public Economics is generally known as applied welfare economics. It underlines the factthat some notion of social welfare or economic welfare of society lies underneaththis branch of economics. Although a social welfare function may not always beexplicitly specified, notions of efficiency and equity/ethics and complementarities and trade-offs between the two generally remain at the back ofmind while formulating in addition of evaluating public policies dealing with economic aspects.More deeply, it concerns the type of relationship which exists between individualpreferences for own-selves or social states (social alternatives) and societal preferenceunder different criteria of choice. For instance, which criterion one would applywhen undertaking a project, which can displace some people from their homesteadsand livelihoods: (i) post-project sum total of individual utilities is higher or not; (ii)nobody is displaced if displacement seems loss of utility to those who are displaced,whatever the gains for others (iii) people displaced are sufficiently compensatedfor their perceived loss. Similarly, whenever there is a discussion of reservation ofjobs in employment, seats in educational courses or items for production in smallscale sector there is involved one or the other criterion of ethics that gets juxtaposedwith efficiency.
In last 50 years there has been a further development that economic approachcame to be applied in arena of public decision-making process that broadlycovers many bureaucratic and political processes and interface between thetwo. This has come to be included in name of public choice in the area of PublicEconomics. Outcomes may a great deal rely on the process adopted and thusunderlying behavioural assumptions of actors and implications of processesin practice came to be studied.