The Political Economy of Government Domestic Expenditure in the Affluent Democracies, 1960-80

Abstract

Despite the large number of studies of the determination of government expenditure in the affluent democracies, most students of the subject admit that we know relatively little about the complex dynamics of spending change. Using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980, this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses, by introducing and testing several relatively new hypotheses, and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political-economic eras. Results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras. Overall, the self-interests and ideological preferences of policymakers, the institutional and extrainstitutional political action of policy-relevant groups, and needs for state assistance emerge as principal sources of changes in domestic expenditure.

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