IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v120y2004i1_2p191-204.html
   My bibliography  Save this article

The Displacement Effect in the Growth of Governments

Author

Listed:
  • Gabriella Legrenzi

Abstract

We analyze the displacement effect within a multivariate revenue-expenditure model of government growth, based on a long historical dataset, for Italy. Our long-run analysis shows a permanent influence of domestic product on the growth of governments, supporting Wagner's law. The short-run dynamics are more complex and provide some evidence for the displacement effect, in terms of a lower resistance against tax-financing of government spending in the post-war. In addition, government spending adjusts faster when deviations from its equilibrium get larger.

Suggested Citation

  • Gabriella Legrenzi, 2004. "The Displacement Effect in the Growth of Governments," Public Choice, Springer, vol. 120(1_2), pages 191-204, July.
    • Handle: RePEc:kap:pubcho:v:120:y:2004:i:1_2:p:191-204
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0048-5829/contents
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. J. Ferris & Soo-Bin Park & Stanley Winer, 2008. "Studying the role of political competition in the evolution of government size over long horizons," Public Choice, Springer, vol. 137(1), pages 369-401, October.
    2. Manuel Jaén-García, 2021. "Displacement Effect and Ratchet Effect: Testing of Two Alternative Hypotheses," SAGE Open, , vol. 11(1), pages 21582440211, March.
    3. J Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2006. "Political Competition and Convergence to Fundamentals: With Application to the Political Business Cycle and the Size of Government," CESifo Working Paper Series 1646, CESifo.
    4. Yoshito Funashima, 2017. "Wagner’s law versus displacement effect," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 619-634, February.
    5. Christian Walter Martin & Nils D. Steiner, 2016. "Economic globalization and the change of electoral rules," Constitutional Political Economy, Springer, vol. 27(4), pages 355-376, December.
    6. Livio Di Matteo & Fraser Summerfield, 2018. "The Shifting Scully Curve: International Evidence from 1870 to 2013," Working Paper series 18-01, Rimini Centre for Economic Analysis.
    7. J. Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2005. "Political Competition and Convergence to Fundamentals: With Application to the Politcal Business Cycle and the Size of the Public Sector," Carleton Economic Papers 05-09, Carleton University, Department of Economics.
    8. Ageli, Mohammed, 2013. "Econometric Testing of the Displacement Effect: the Saudi Experience," MPRA Paper 50565, University Library of Munich, Germany.
    9. Funashima, Yoshito, 2015. "Wagner's law versus displacement effect," MPRA Paper 68390, University Library of Munich, Germany.
    10. Akitoby, Bernardin & Clements, Benedict & Gupta, Sanjeev & Inchauste, Gabriela, 2006. "Public spending, voracity, and Wagner's law in developing countries," European Journal of Political Economy, Elsevier, vol. 22(4), pages 908-924, December.

    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:kap:pubcho:v:120:y:2004:i:1_2:p:191-204. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.