Annals of the University of Petroşani, Economics, 13(1), 2013, 211-220 211 THEORETICAL ASPECTS REGARDING PUBLIC EXPENDITURES ANA-PETRINA PĂUN, PETRE BREZEANU * ABSTRACT: The first part of this work will treat the theoretical aspects of public expenditures. Taking the state as primary supplier of public goods, we have presented the concepts revolving around public and private goods, the theory of pure public goods, the four categories of goods and services, ”club theory”etc. In the second part we analyse different concepts regarding public expenditures from an economic point of view, the subsystems of public expenditures, public versus budgetary expenditures, respectively public versus private expenditures. KEY WORDS: public goods, private goods, public expenditures, private expenditures. JEL CLASSIFICATION: E60, H50. State implication in the economic and social life is present permanently in two ways: on the one hand by supplying quintessential services for the society related to national security, defence, health, education, social security, research, environmental protection, and on the other hand, by exercising its attributions as market regulator. In a market economy the state can be considered an economic entity supplying public goods in order to ensure a healthy functioning of the economy, and this intervention is focused on public resources being transformed into public goods of undeniable and undividable access, free of charge to the beneficiary. I the modern age it was Adam Smith, the father of modern liberalism, who first observed the distinction between private and public goods. He demonstrated that there are “goods which even though can be of high advantage for society, they are of such nature that the profits resulted from them could never exceed the expenses of an * Ph.D. Student, Bucharest University of Economic Studies, Romania, stanciu.anapetrina@yahoo.com Prof., Ph.D., Bucharest University of Economic Studies, Romania, brezeanupetre@yahoo.com