WAGNER'S LAW: A POOLED TIME-SERIES, CROSS-SECTION COMPARISON

Sohrab Abizadeh · John A. Gray

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Fiscal Policy and Economic Growth Economic and Fiscal Studies Fiscal Policies and Political Economy

Abstract

This paper tests Wagner's "Law of expanding state expenditures" against pooled time-series, cross-section data for 53 countries grouped into poor, developing, and developed countries by means of the Physical Quality of Life Index. Wagner's "Law" is tested for each group in a model relating the growth of government expenditures to several measures of economic development. The hypothesized relationship between economic development and the growth of government expenditures is found to hold for the developing group of countries, but not for the poor, or for the developed groups. In fact, for the developed group a decline in the government expenditure ratio with increased economic development is observed.

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References

2000Leading issues in economic development 1980The United States and World Development: Agenda 1979.

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