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The size and growth of government spending


  • Lindauer, David L.


This paper reviews the size and growth of government spending. Section I surveys the empirical evidence on the growth of government expenditures. First, a number of measurement issues are raised, including the definition of the public sector, the appearance of off-budget expenditures, and the use of price deflators for government output. Section I then reviews available data on government expenditures for OECD and developing nations. Both a long term perspective, provided by several OECD economies, and contemporary experience, essentially since 1960, are presented. In Section II, the determinants of the growth in government are considered. This literature covers demographic demands for expenditure growth, the changing relative prices of public vis-a-vis private goods, the income elasticity of public goods, and the arguments of the public choice school. Most of these explanations have been directed at understanding trends in industrialized nations, and little has been written on the relevance of these explanations for developing nations. This section briefly speculates on the determinants of government growth in developing countries against the backdrop provided by results in the advanced economies.

Suggested Citation

  • Lindauer, David L., 1988. "The size and growth of government spending," Policy Research Working Paper Series 44, The World Bank.
  • Handle: RePEc:wbk:wbrwps:44

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    References listed on IDEAS

    1. Jonathan S. Skinner, 1987. "Taxation and Output Growth: Evidence from African Countries," NBER Working Papers 2335, National Bureau of Economic Research, Inc.
    2. Beck, Morris, 1979. "Public Sector Growth: A Real Perspective," Public Finance = Finances publiques, , vol. 34(3), pages 313-356.
    3. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law and Economics, University of Chicago Press, vol. 23(2), pages 209-287, October.
    4. Ram, Rati, 1986. "Causality between Income and Government Expenditure: A Broad International Perspective," Public Finance = Finances publiques, , vol. 41(3), pages 393-414.
    5. Pathirane, Leila & Blades, Derek W, 1982. "Defining and Measuring the Public Sector: Some International Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 261-289, September.
    6. Pluta, Joseph E, 1981. "Real Public Sector Growth and Decline in Developing Countries," Public Finance = Finances publiques, , vol. 36(3), pages 439-454.
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    Cited by:

    1. 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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