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The Growth of Government and the Reform of the State in Industrial Countries

Author

Listed:
  • Ludger Schuknecht
  • Vito Tanzi

Abstract

This paper describes the growth of public spending in industrial countries over the past century. It identifies several periods: the periods between 1870 and 1913; the period between the two World Wars; the post World War II period up to 1960; and the period after 1960. Public spending started growing during World War I but its growth accelerated after 1960. The paper outlines the reasons for this growth and speculates that recent government growth has not brought about much economic or social progress. The paper sees the future of government mainly in setting the “rules of the game,” and provides a rough blueprint for reform. It also discusses experiences with government reform in selected count les, and predicts that over the next decades, public spending as a share of GDP will fall.

Suggested Citation

  • Ludger Schuknecht & Vito Tanzi, 1995. "The Growth of Government and the Reform of the State in Industrial Countries," IMF Working Papers 95/130, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:95/130
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    Cited by:

    1. Ali Fagheh Majidi, 2017. "Globalization and Economic Growth: The Case Study of Developing Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(6), pages 589-599, June.
    2. Tanzi, Vito & Schuknecht, Ludger, 1997. "Reforming government: An overview of recent experience," European Journal of Political Economy, Elsevier, vol. 13(3), pages 395-417, September.
    3. VirÉn, Matti, 2000. "Financing the Welfare State in the Global Economy," Discussion Papers 732, The Research Institute of the Finnish Economy.
    4. Alberto Alesina & Roberto Perotti, 1996. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," NBER Working Papers 5730, National Bureau of Economic Research, Inc.
    5. Genschel, Philipp, 2000. "Der Wohlfahrtsstaat im Steuerwettbewerb," MPIfG Working Paper 00/5, Max Planck Institute for the Study of Societies.
    6. Dicke, Hugo & Foders, Federico, 2000. "Wirtschaftliche Auswirkungen einer EU-Erweiterung auf die Mitgliedstaaten," Open Access Publications from Kiel Institute for the World Economy 2510, Kiel Institute for the World Economy (IfW).
    7. Massimo Florio, 2001. "On Cross-country Comparability of Government Statistics: Public expenditure trends in OECD National Accounts," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(2), pages 181-198.
    8. Palda, Filip, 1997. "Fiscal Churning and Political Efficiency," Kyklos, Wiley Blackwell, vol. 50(2), pages 189-206.
    9. Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2017. "Long-term effects of fiscal policy in Uruguay," Documentos de Trabajo (working papers) 17-02, Instituto de Economía - IECON.
    10. Filip Palda, 2005. "Why Do Voters Demand Universal Government Benefits?," Public Economics 0503009, EconWPA.
    11. Flandreau, Marc, 1998. "Caveat Emptor: Coping With Sovereign Risk Without the Multilaterals," CEPR Discussion Papers 2004, C.E.P.R. Discussion Papers.
    12. Massimo Florio & Sara Colautti, 2001. "A logistic growth law for government expenditures: an explanatory analysis," Departmental Working Papers 2001-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    13. Nikopour, Hesam & Shah Habibullah, Muzafar, 2010. "Shadow Economy and Poverty," MPRA Paper 23599, University Library of Munich, Germany.
    14. Commander, Simon & Davoodi, Hamid R. & Lee, Une J., 1997. "The causes of government and the consequences for growth and well-being," Policy Research Working Paper Series 1785, The World Bank.

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