This new edition includes new empirical findings and updates the representation of key social policy institutions in Germany, taking into account the extensive reforms of recent years. Unlike the theory of taxation and public debt, the theory of public expenditure has long played a rather neglected role in public finance. Corneo's book has successfully filled this gap in the specific literature on public finance. A new chapter on cost-benefit analysis, which has gained importance due to new EU regulations, has been added. This should help the book maintain its position in the textbook market. Those who work through it at the beginning of their Master's studies in economics will find concepts such as external effects and adverse selection to be no cause for concern.