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Explaining International Differences in Public Expenditure: An Empirical Study

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  • Saunders, Peter G

Abstract

This paper seeks to explain differences in the ratio of public expenditure components to gross domestic product among OECD countries within an international cross-section regression framework. A simple political institutional model is first developed that explains country differences at the end of the 1970s in terms of differences at the beginning of the 1960s (an assumed preference variable), the frequency of national elections, and a zero-one federal dummy variable. This basic model is then extended to incorporate a number of economic determinants of public expenditure, including the demographic structure of the population, the tax structure, and the size of the economy.

Suggested Citation

  • Saunders, Peter G, 1988. "Explaining International Differences in Public Expenditure: An Empirical Study," Public Finance = Finances publiques, , vol. 43(2), pages 271-294.
    • Handle: RePEc:pfi:pubfin:v:43:y:1988:i:2:p:271-94
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    Cited by:

    1. Estache, Antonio & Sinha, Sarbajit, 1995. "Does decentralization increase spending on public infrastructure?," Policy Research Working Paper Series 1457, The World Bank.
    2. Lars Feld, 2014. "James Buchanan’s theory of federalism: from fiscal equity to the ideal political order," Constitutional Political Economy, Springer, vol. 25(3), pages 231-252, September.
    3. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    4. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2010. "Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments," Southern Economic Journal, John Wiley & Sons, vol. 77(1), pages 27-48, July.
    5. Silika Prohl & Friedrich Schneider, 2009. "Does Decentralization Reduce Government Size? A Quantitative Study of the Decentralization Hypothesis," Public Finance Review, , vol. 37(6), pages 639-664, November.

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