A Note on the Public Choice Approach to the Growth in Government Expenditure

25 Pages Posted: 15 Feb 2006

See all articles by Jack Diamond

Jack Diamond

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: October 21, 1988

Abstract

The paper applies an empirical model, based on the economic theory of public choice, to the Group of Seven countries. It is discovered: (a) that deficit financing does appear to contribute to increased real government spending; (b) that the demand for government services as a whole does not appear to be income elastic; (c) that there is some evidence of a productivity lag in the government sectors of Canada, Japan, and the United States, but not those of France, Italy, or the United Kingdom; and (d) that in most countries there is some evidence of economies of scale in the provision of government services.

JEL Classification: 1221, 3200, 3212, 3220

Suggested Citation

Diamond, Jack, A Note on the Public Choice Approach to the Growth in Government Expenditure (October 21, 1988). IMF Working Paper, Vol. , pp. 1-25, 1988. Available at SSRN: https://ssrn.com/abstract=885057

Jack Diamond (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

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