The Economics and Politics of the Structure of Public Expenditure
The paper derives a complete system of demand equations for public consumption expenditures as the outcome of rational behaviour in a model where government maximizes expected electoral support. The allocation of expenditures is found to depend not only on the prices of public services and total expenditure and to satisfy the constraints of demand theory, which have been the focus of attention of previous empirical studies of the allocation of public expenditures, but, in addition, on the prices of private consumption goods, the distribution of voter incomes and the expected change in voter support from varying the levels of public provision. Copyright 2001 by Kluwer Academic Publishers
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