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Determinants of Government Expenditures: New Evidence from Disaggregative Data


  • Dao, Minh Quang


In this paper we test a model of per capita spending for government services developed by Dao (1994) using data from a set of 105 countries. We are able to show that the income elasticity of the demand for public services depends on the type of devices and on how developed (economically or politically) a country is. We also find that population density explains variations in certain types of government expenditures among DCs, while the level of urbanization is a better empirical proxy for interdependencies which arise from the process of economic development. Per capita government spending for education and health is shown to vary positively with the relative price of public sector output (suggesting a price-inelastic demand for these two government services) and their provision is subject to scale economies in countries with large populations. Copyright 1995 by Blackwell Publishing Ltd

Suggested Citation

  • Dao, Minh Quang, 1995. "Determinants of Government Expenditures: New Evidence from Disaggregative Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 67-76, February.
  • Handle: RePEc:bla:obuest:v:57:y:1995:i:1:p:67-76

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    References listed on IDEAS

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    2. Barry T. Hirsch, 1982. "The Interindustry Structure of Unionism, Earnings, and Earnings Dispersion," ILR Review, Cornell University, ILR School, vol. 36(1), pages 22-39, October.
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    5. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Chapters,in: NBER Macroeconomics Annual 1992, Volume 7, pages 239-300 National Bureau of Economic Research, Inc.
    6. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    7. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    8. Stewart, Mark B, 1983. "Relative Earnings and Individual Union Membership in the United Kingdom," Economica, London School of Economics and Political Science, vol. 50(198), pages 111-125, May.
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    12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
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    Cited by:

    1. Dana A. Kerr & Yu-Luen Ma & Joan T. Schmit, 2009. "A Cross-National Study of Government Social Insurance as an Alternative to Tort Liability Compensation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(2), pages 367-384.
    2. Fosu, Augustin Kwasi, 2007. "Fiscal Allocation for Education in Sub-Saharan Africa: Implications of the External Debt Service Constraint," World Development, Elsevier, vol. 35(4), pages 702-713, April.

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