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A Note On the Public Choice Approach To the Growth in Government Expenditure

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  • Jack Diamond

    (International Monetary Fund)

Abstract

This article applies an empirical model, based on the economic theory of public choice, to the Group of Seven countries. It is discovered: (1) that deficit financing does appear to contribute to increased real government spending; (2) that the demand for government services as a whole does not appear to be income elastic; (3) that there is some evidence of a productivity lag in the government sectors of Canada, Japan, and the United States, but not in those of France, Italy, or the United Kingdom; and (4) that in most countries there is some evidence of economies of scale in the provision of government services.

Suggested Citation

  • Jack Diamond, 1989. "A Note On the Public Choice Approach To the Growth in Government Expenditure," Public Finance Review, , vol. 17(4), pages 445-461, October.
    • Handle: RePEc:sae:pubfin:v:17:y:1989:i:4:p:445-461
    DOI: 10.1177/109114218901700406
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    References listed on IDEAS

    as
    1. Provopoulos, George A, 1982. "Public Spending and Deficits: The Greek Experience," Public Finance = Finances publiques, , vol. 37(3), pages 422-427.
    2. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
    3. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
    4. Niskanen, William A., 1978. "Deficits, government spending, and inflation : What is the evidence?," Journal of Monetary Economics, Elsevier, vol. 4(3), pages 591-602, August.
    5. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    6. Rizzo, Ilde & Peacock, Alan, 1987. "Government Debt and Growth in Public Spending," Public Finance = Finances publiques, , vol. 42(2), pages 283-291.
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