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The Demand for Current Public Expenditure in Fiji: Theory and Empirical Results

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  • Doessel, Darrel
  • Valadkhani, Abbas

Abstract

The purpose of this paper is to analyse government expenditure in Iran using annual time series data for the period 1963-2000. Various theories of the size of government are reviewed and a distinction is made between economic/structural determinants and institutional determinants. Categorising the theories of government expenditure in this way suggests the application of non-nested tests as a mechanism whereby the relative importance of the two broad theoretical categories can be determined. The empirical results, indicating "double rejection", reveal that neither the economic/structural determinants nor the institutional determinants alone are sufficient to explain government expenditure in Iran. A comprehensive, incorporating explanatory variables from both models provides a robust explanation of the data. This paper presents the first empirical estimates of the own-price elasticity of the demand, and income elasticity of the demand, for current government expenditures in Iran.

Suggested Citation

  • Doessel, Darrel & Valadkhani, Abbas, 2003. "The Demand for Current Public Expenditure in Fiji: Theory and Empirical Results," MPRA Paper 50391, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50391
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    Cited by:

    1. T.K. Jayaraman & Chee‐Keong Choong, 2008. "Exchange market pressure in a small Pacific Island country: a study of Fiji: 1975‐2005," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 35(12), pages 985-1004, October.

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    More about this item

    Keywords

    Government expenditure; Non-nested tests; Iran; Economic determinants; Institutional determinants.;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods

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