IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v21y1993i1p33-47.html
   My bibliography  Save this article

Are There Ratchets in the Growth of Federal Government Spending?

Author

Listed:
  • Randall G. Holcombe

    (Florida State University)

Abstract

The ratchet theory of government growth hypothesizes that temporary crises cause government spending to rise and to remain permanently higher than if the crises had not occurred. An examination of federal government spending in the United States since 1800 reveals apparent ratchets associated with the Great Depression, the two world wars, and the Civil War. After taking account of war-related spending and serial correlation in the data, however, only the World War I and Great Depression ratchets can be clearly identified, and they are closely associated with a major change in the underlying growth rate of government spending early in the 20th century. This casts doubt on the ratchet theory of government growth and instead raises the question of why the trend growth rate of government was so much greater in the 20th century than in the 19th.

Suggested Citation

  • Randall G. Holcombe, 1993. "Are There Ratchets in the Growth of Federal Government Spending?," Public Finance Review, , vol. 21(1), pages 33-47, January.
    • Handle: RePEc:sae:pubfin:v:21:y:1993:i:1:p:33-47
    DOI: 10.1177/109114219302100102
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114219302100102
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114219302100102?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Randall Holcombe, 1980. "Contractarian model of the decline in classical liberalism," Public Choice, Springer, vol. 35(3), pages 277-286, January.
    2. Alan T. Peacock & Jack Wiseman, 1961. "The Growth of Public Expenditure in the United Kingdom," NBER Books, National Bureau of Economic Research, Inc, number peac61-1.
    3. 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.
    4. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    5. Coughlin, Peter J & Mueller, Dennis C & Murrell, Peter, 1990. "Electoral Politics, Interest Groups, and the Size of Government," Economic Inquiry, Western Economic Association International, vol. 28(4), pages 682-705, October.
    6. James Buchanan, 1990. "The domain of constitutional economics," Constitutional Political Economy, Springer, vol. 1(1), pages 1-18, December.
    7. Peltzman, Sam, 1980. "The Growth of Government," Working Papers 1, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    8. Naert, Frank, 1990. "Pressure Politics and Government Spending in Belgium," Public Choice, Springer, vol. 67(1), pages 49-63, October.
    9. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    10. James Kau & Paul Rubin, 1981. "The size of government," Public Choice, Springer, vol. 37(2), pages 261-274, January.
    11. Rasler, Karen A. & Thompson, William R., 1985. "War Making and State Making: Governmental Expenditures, Tax Revenues, and Global Wars," American Political Science Review, Cambridge University Press, vol. 79(2), pages 491-507, June.
    12. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bjørnskov, Christian & Rode, Martin, 2016. "And Yet It Grows: Crisis, Ideology, and Interventionist Policy Ratchets," Working Paper Series 1135, Research Institute of Industrial Economics.
    2. Stanley Winer & Michael Tofias & Bernard Grofman & John Aldrich, 2008. "Trending economic factors and the structure of Congress in the growth of government, 1930–2002," Public Choice, Springer, vol. 135(3), pages 415-448, June.
    3. repec:hal:cepnwp:hal-02073247 is not listed on IDEAS
    4. Andrew T. Young & Jamie Bologna, 2016. "Crises And Government: Some Empirical Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 34(2), pages 234-249, April.
    5. Mehrdad Vahabi & Philippe Batifoulier & Nicolas Silva, 2020. "A theory of predatory welfare state and citizen welfare: the French case," Public Choice, Springer, vol. 182(3), pages 243-271, March.
    6. Randall Holcombe, 2005. "Government growth in the twenty-first century," Public Choice, Springer, vol. 124(1), pages 95-114, July.
    7. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.
    8. Russell Sobel & George Crowley, 2014. "Do intergovernmental grants create ratchets in state and local taxes?," Public Choice, Springer, vol. 158(1), pages 167-187, January.
    9. O'Reilly, Colin & Powell, Benjamin, 2015. "War and the growth of government," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 31-41.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tridimas, George & Winer, Stanley L., 2005. "The political economy of government size," European Journal of Political Economy, Elsevier, vol. 21(3), pages 643-666, September.
    2. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    3. Randall Holcombe, 2005. "Government growth in the twenty-first century," Public Choice, Springer, vol. 124(1), pages 95-114, July.
    4. Thomas A. Garrett & Andrew F. Kozak & Russell M. Rhine, 2010. "Institutions and government growth: a comparison of the 1890s and the 1930s," Review, Federal Reserve Bank of St. Louis, vol. 92(Mar), pages 109-120.
    5. Thomas A. Garrett & Russell M. Rhine, 2006. "On the size and growth of government," Review, Federal Reserve Bank of St. Louis, vol. 88(Jan), pages 13-30.
    6. Henrik Jacobsen Kleven & Claus Thustrup Kreiner & Emmanuel Saez, 2016. "Why Can Modern Governments Tax So Much? An Agency Model of Firms as Fiscal Intermediaries," Economica, London School of Economics and Political Science, vol. 83(330), pages 219-246, April.
    7. Daniel E. Ingberman & Robert P. Inman, 1987. "The Political Economy of Fiscal Policy," NBER Working Papers 2405, National Bureau of Economic Research, Inc.
    8. Dennis Mueller & Peter Murrell, 1986. "Interest groups and the size of government," Public Choice, Springer, vol. 48(2), pages 125-145, January.
    9. Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
    10. Giorgio Brosio & Carla Marchese, 1988. "The Growth of Government under Different Redistributive Rules: A Long Term Study of the Italian Case," Public Finance Review, , vol. 16(4), pages 439-463, October.
    11. Baqir, Reza, 1999. "Districts, spillovers, and government overspending," Policy Research Working Paper Series 2192, The World Bank.
    12. Mehrdad Vahabi & Philippe Batifoulier & Nicolas Silva, 2020. "A theory of predatory welfare state and citizen welfare: the French case," Public Choice, Springer, vol. 182(3), pages 243-271, March.
    13. Chang, Alex Chuan-hsien, 2018. "How do Asian values constrain public support for redistribution?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 139-150.
    14. Marco Gallegati & Massimo Tamberi, 2022. "Long swings in the growth of government expenditure: an international historical perspective," Public Choice, Springer, vol. 192(3), pages 227-248, September.
    15. Toke Aidt & Peter Jensen, 2009. "Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860–1938," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(3), pages 362-394, June.
    16. Francois Facchini, 2018. "What Are the Determinants of Public Spending? An Overview of the Literature," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(4), pages 419-439, December.
    17. repec:hal:cepnwp:hal-02073247 is not listed on IDEAS
    18. Jørgen Andersen, 2012. "Costs of taxation and the size of government," Public Choice, Springer, vol. 153(1), pages 83-115, October.
    19. Mwangi Kimenyi & William Shughart, 1989. "Political successions and the growth of government," Public Choice, Springer, vol. 62(2), pages 173-179, August.
    20. Leonard Dudley & Claude Montmarquette, 1987. "Bureaucratic corruption as a constraint on voter choice," Public Choice, Springer, vol. 55(1), pages 127-160, September.
    21. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Gerontocracy, Retirement, and Social Security," NBER Working Papers 7117, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:21:y:1993:i:1:p:33-47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.