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Institutions and government growth: a comparison of the 1890s and the 1930s

  • Thomas A. Garrett
  • Andrew F. Kozak
  • Russell M. Rhine

Statistics on the size and growth of the U.S. federal government, in addition to public statements by President Franklin Roosevelt, seem to indicate that the Great Depression was the primary event that caused the dramatic growth in government spending and intervention in the private sector that continues to the present day. Through a comparison of the economic conditions of the 1890s and the 1930s, the authors argue that post-1930 government growth in the United States is not the direct result of the Great Depression, but rather is a result of institutional, legal, and societal changes that began in the late 1800s. Thus, the Great Depression did likely trigger increases in government spending and regulatory involvement, but historical factors produced the conditions that tended to lend permanence to the growth of government that occurred during the Great Depression.

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Article provided by Federal Reserve Bank of St. Louis in its journal Review.

Volume (Year): (2010)
Issue (Month): Mar ()
Pages: 109-120

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Handle: RePEc:fip:fedlrv:y:2010:i:mar:p:109-120:n:v.92no.2
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  2. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
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  11. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
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