The Growth Of Public Expenditure: A Survey Of The Literature

This paper offers a survey of the economic literature on the growth of public expenditure in developed and developing countries. After a brief discussion of the median voter model the main competing theories of the growth of government as well as their explanatory powers are examined. The model is then modified to take account of important aspects of the actual political process including the interests of the bureaucracy. Alternative versions of the class interest theory and tests of some of the leading hypotheses in the context of developing economies are discussed. From this survey it appears that there is a great variety of hypotheses about public expenditure growth and of models to which they are related. This variety shows that experts in the field of public finance have yet to come to an agreement as to the causal influences at work.