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A Noteon the Public Choice Approach to the Growth in Government Expenditure

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  • International Monetary Fund

Abstract

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

Suggested Citation

  • International Monetary Fund, 1988. "A Noteon the Public Choice Approach to the Growth in Government Expenditure," IMF Working Papers 1988/093, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:1988/093
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