Government Expenditures in the European Union: Do They Converge or Follow Wagner's Law?

Afxentiou, Panos; Serletis, Apostolos

doi:10.1080/10168739600080018

Cited by 31 publications

(16 citation statements)

References 11 publications

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“…Therefore, their finding neither confirmed the Wagner's Law nor the Keynesian view. Afxentiou and Serletis (1996) examined government expenditure convergence within the expanded European Union and also tested the validity of Wagner's Law in the study countries. Government expenditure was further disaggregated into government consumption, transfers, and subsidies.…”

Section: No Causality/the Independent View/the Neutrality Viewmentioning

confidence: 99%

Government Size and Economic Growth: A Review of International Literature

Nyasha

Odhiambo

2019

Sage Open

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In this article, we survey the existing literature on the causal relationship between government size and economic growth, highlighting the theoretical and empirical evidence from topical work. To our knowledge, this study may well be the first study of its kind to survey, in detail, the existing literature on the causal relationship between government size and economic growth—in all the countries, whether developing or developed. By and large, our study shows that direction of causality between these two variables has four possible outcomes, and that all the outcomes have found empirical support, based on variations in the country or region under study, methodology, proxies, data set used, and time frame considered. However, of the four, the most prominent is the second view, which validates unidirectional Granger-causality from economic growth to government size, followed by the bidirectional Granger-causality category. The study, therefore, concludes that the causal relationship between government size and economic growth is far from being clear-cut.

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Section: No Causality/the Independent View/the Neutrality Viewmentioning

confidence: 99%

Government Size and Economic Growth: A Review of International Literature

Nyasha

Odhiambo

2019

Sage Open

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“…Its status as a law has since been called into question, as a number of more recent studies provide mixed support, at best. Most contemporary studies conclude that the law cannot be applied without exception to all countries over all time periods (Abizadeh and Gray, 1985; Afxentiou and Serletis, 1996; Peacock and Scott, 2000; Wagner and Weber, 1977), but we still do not know the exact conditions under which Wagner's law breaks down. This paper will help identify and explain the scope conditions of Wagner's law.…”

Section: Introductionmentioning

confidence: 92%

Is there a limit to the size of the state? The scope conditions of Wagner's law

Karceski

Kiser

2019

Journal of Institutional Economics

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We investigate the relationship between economic development and the growth of the state by testing Wagner's Law. We begin with a general test, and find it does not hold in all cases: it breaks down at higher levels of development and in more recent time periods. This suggests that Wagner's law has specific scope conditions, beyond which states do not continue to grow as economies grow. We use a series of models to explore the temporal scope of Wagner's law and the point at which state growth may hit a ceiling. We conclude limits on the growth of the state are set by limits on the capacity of states to increase taxation. States can avoid this problem temporarily by running budget deficits, but eventually accumulated debt forces them to cut expenditures. Spending is tied to tax revenue like a rubber band, it can stretch only so far before being pulled back.

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“…Besides indicating income, the previous literature has investigated the degree of convergence in the area of public finance (Afxentiou & Serletis, 1996;Annala, 2003 Note: This table shows the subject matter of the federal and state laws, which are split into three categories: federal, state and concurrent (both federal and state governments) powers. Source: The Constitution of Malaysia, as cited in Anuar (2000).…”

Section: Convergence In State Government Expenditurementioning

confidence: 99%

Fiscal decentralization and convergence in government spending in Malaysia

2020

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In this study, we highlight the influence of the federal system on the development expenditure of the states, which is crucial for socioeconomic development. First, we examine whether there is a convergence in development expenditure across Malaysian states. Second, we investigate the importance of decentralization in affecting the pattern of development expenditure in the short-term and in the long-term. The convergence analysis utilizes annual growth data from 2000 through 2015 for the short-term and the averages of 3and 5-year growth for the long-term. In this study, we employ the panel data approaches of pooled OLS, fixed effects and random effects estimation procedures. The findings provide empirical evidence of the convergence of development expenditure across the states in Malaysia in both the short-term and the long-term. Generally, all fiscal decentralization indicators (state per capita revenue, state own-source per capita revenue, state own-source revenue as a share of total revenue and interstate fiscal capacity) are imperative in influencing the fiscal behaviour of state governments in Malaysia. These indicators, as well as assistance from the federal government in the form of transfer payment, are very much needed to strengthen the expenditure capacity of the Malaysian states.

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Government Expenditures in the European Union: Do They Converge or Follow Wagner's Law?

Cited by 31 publications

References 11 publications

Government Size and Economic Growth: A Review of International Literature

Government Size and Economic Growth: A Review of International Literature

Is there a limit to the size of the state? The scope conditions of Wagner's law

Fiscal decentralization and convergence in government spending in Malaysia

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