haku: @indexterm Sweden / yhteensä: 850
viite: 9 / 850
| Tekijä: | Durevall, D. Henrekson, M. |
| Otsikko: | The futile quest for a grand explanation of long-run government expenditure |
| Lehti: | Journal of Public Economics
2011 : AUG, VOL 95:7-8 p. 708-722 |
| Asiasana: | public sector social security welfare Sweden United Kingdom |
| Vapaa asiasana: | ratchet effect Wagner's law government expenditure |
| Kieli: | eng |
| Tiivistelmä: | This study carries out a critical reappraisal of the two contending theories claiming to explain long-run government spending: Wagner's Law and variants of the ratchet effect. We analyze data from Sweden and the United Kingdom, spanning from the early 19th century until the present day. Hence, unlike previous studies, we assess the validity of Wagner's Law and the ratchet effect hypothesis over a very long time period, since the beginning of industrialization. Cointegration analysis is used to study the long-run relationships between government expenditure and GDP, with focus on sub-periods and structural breaks. In addition, we test the ratchet effect hypothesis by estimating models allowing asymmetric adjustment. According to our main results, Wagner's Law does not hold in the long run, even though the data are consistent with Wagner's Law between roughly 1860 and the mid 1970s. This can be associated with the formation of the modern public sector, including for example public education and health care. Yet Wagner's Law did not hold during the initial industrialization period (before 1860), and recently GDP has only affected the government spending share when controlled for population age structure. Finally, some evidence is found of asymmetric adjustment in the UK, especially in the post-WWII period. However, the ratchet effect is not a general cause of the government spending growth. |
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