Peacock and Wiseman on the growth of public expenditure

Rowley, Charles K.; Tollision, Robert D.

doi:10.1007/bf01050389

Cited by 23 publications

(13 citation statements)

References 3 publications

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“…Although we have not tested, and cannot exclude, other plausible explanations-including the much discussed role of pressure groups and bureaucrats-our findings assign a non-negligible role to voters' choice. In this respect, notice that Rowley and Tollison (1994) compare Wagner's law with the principle of comparative advantage: the law explains the complementarity between the growth of the industrial economy and the associated growth in demand for public services. In other words, social progress brings about an increase in state activity which in turn means more government expenditure (Henrekson 1993).…”

Section: Presence Of Cross-section Dependencymentioning

confidence: 99%

The Impact of GDP on Health Care Expenditure: The Case of Italy (1982–2009)

Fedeli

2014

Soc Indic Res

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Italian health care expenditure (HCE) has been basically explained with two main groups of theories. (1) Those explaining the peculiarity of the HCE growth as depending on demand and supply factors, such as aging population, number of practising physicians per capita, mix of public and private hospitals, number of hospital beds,… (2) Those explaining the growth of total public expenditure as a common feature among industrialized countries, with a huge empirical literature emphasising the role of GDP and/ or other structural/institutional variables as the main determinants of HCE across countries. In order to reassess previous findings, we exploit recent results on panel cointegration analysis and test the regional Italian data on HCE and GDP, also taking into account crosssection correlation. The results show that HCE and GDP are cointegrated. The long-and short-term dynamics of HCE are estimated. Our results, providing an empirical support for the existence of Wagner's law, have important policy implications in terms of fiscal sustainability: as income rises, people will choose relatively more HCE. Given the level of the public debt in Italy, any further increases would imply that future government spending may be mainly directed toward debt servicing, likely at the expense of public expenditure on basic infrastructure.

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Section: Presence Of Cross-section Dependencymentioning

confidence: 99%

The Impact of GDP on Health Care Expenditure: The Case of Italy (1982–2009)

Fedeli

2014

Soc Indic Res

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“…the de vel oped econ o mies of the world cre ated a de mand for bud get ary sta bi liz ing of the er ratic fluc tu a tions of mar kets (Wag ner, 1883;Pea cock and Wise man, 1961;Wildavsky, 1964;Berry and Lowery, 1987;Alesina and Perrotti, 1995;Payne, 1991;Rowley and Tollison, 1994;Kraan, 1996;Kau and Rubin, 2002). These demand hypotheses may be classified as either economic or political.…”

Section: Fac Tors Of the Size Of Gov Ern Ment In De Vel Oped Coun Triesmentioning

confidence: 99%

Factors of the Size of Government in Developed Countries

Gramc¹

2007

Prague Economic Papers

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Ab stract:The pur pose of the anal y sis pre sented in the pa per is to iden tify var i ous fac tors, in clud ing eco nomic, so cial, po lit i cal, de mo graphic and cul tural ones, that could shape the dif fer ences in the size of gov ern ment across coun tries and to ver ify their ef fect with the use of ec ono met ric anal y sis. The anal y sis fo cuses on "bud get ary" gov ern ment, usu ally mea sured with some gov ern ment spend ing ra tio, as well as on "non-bud get ary" gov ern ment, mea sured with the in dex of the ex tent of reg u la tion in the econ omy. The re sults of the anal y sis show that eco nomic fac tors are more im por tant in ex plain ing the vari a tion in the size of gov ern ment con sump tion and in the size of non-bud get ary gov ern ment, whereas po lit i cal, so cial and cul tural fac tors are more im por tant in ex plain ing the vari a tion in the size of trans fers. Be sides, the re sults also indicate, that there exists "trade-off" between budgetary and non-budgetary government.Keywords: the size of the gov ern ment, econ o met rics, pol i tics, eco nomic pol icy.JEL Clas si fi ca tion: H11, H60 In tro duc tionOne of the ma jor cur rent is sues in the so cial sci ences is the ex pan sion of gov ern ment in re cent times. Namely, ab so lute and rel a tive size of gov ern ment sec tors grew rap idly in the ma jor ity of in dus trial ised coun tries over the past cen tury.1 It is worth not ing that the lit er a ture on the de ter mi nants af fect ing the growth in size of gov ern ment is quite compre hen sive and nu mer ous ex pla na tions have been de vel oped (e.g., see Lane, 2000;Tanzi and Schuknecht, 2000;Bailey, 2002). The first at tempts to ac count for the ex ceptional pub lic sec tor growth in de vel oped coun tries were the so-called de mand side hypoth e ses. De mand the o ries sug gested among other things that socio-eco nomic de vel opment im plies pub lic re source al lo ca tion, that in creas ing af flu ence im plies larger bud gets, that the dom i nance of the left in so ci ety or gov ern ment would mean bud get expan sion re plac ing mar ket mech a nisms, that col lec tive ide ol o gies would pro mote pub lic sec tor ex pan sion, that sud den so cial shocks ne ces si tated bud get ary shift-points to wards much higher lev els of pub lic spend ing, that wel fare spend ing by neigh bour hood state im plied a de mand for wel fare programmes at home, and that the in creas ing open ness of

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“…Those reasons are: (i) when the country is on the industrialized period; (ii) when the economic growth causes an increasing demand of public services; and (iii) government contribution for a capital accumulation in which private sector would not satisfy. Rowley & Tollison (1994) argued that Wagner Law would exist by comparing it with comparative advantage industries of the country which are under government authority. Hence, it can be said that the decreasing of comparative advantage will trigger the public expenditure -GDP ratio to be decreased (Peacock & Scott, 2000).…”

Section: Introductionmentioning

confidence: 99%

Testing the Existence of Wagner Law and Government Expenditure Volatility in Indonesia Post-Reformation Era

Permana

Wika

2013

SSRN Journal

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Aim of this study is to identify the existence of Wagner's Law in Indonesia economy during post-reformation era. This study takes period sample of five regimes during 1999 -2011, which are following: a) Development Reformation Regime; b) National Unity Regime; c) Mutual Cooperation Regime; d) Indonesia Unite I Regime; e) Indonesia Unite II Regime. In order to test the existence of Wagner's Law, we also elaborate exogenous variable (tax revenue and population) as variable control. We find the result that Wagner Law did occur in postreformation era by performing an ARDL co-integration model, yet volatility of government expenditure has to be captured. Hence, we run a GARCH model to estimate the volatility of government expenditure by elaborating the regime variable. The ARDL approach, causality test and co-integration test also support the existing of Wagner Law in this study

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Peacock and Wiseman on the growth of public expenditure

Cited by 23 publications

References 3 publications

The Impact of GDP on Health Care Expenditure: The Case of Italy (1982–2009)

The Impact of GDP on Health Care Expenditure: The Case of Italy (1982–2009)

Factors of the Size of Government in Developed Countries

Testing the Existence of Wagner Law and Government Expenditure Volatility in Indonesia Post-Reformation Era

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