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Spring 2004

ISSN 0890-913X

Volume 19, Number 2

Categories: Spring 2004 | Political Science

Real Government Reform

Philip E. Graves, University of Colorado

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RealGovernmentReformPhilipE.GravesUniversityofColoradoPoliticianshaveanincentivetorunlargedeficitssinceincreasingspendingispoliticallydesirableforthemwhileincreasingtaxesisnot.Additionally,politicianshaveincentivestopromoteexpendituresthatbenefitthembutthatarenotintheinterestsofthegeneralvoters,specialinterestabusesbeingofparticularconcern.Publicchoicetheorists,suchasBuchanan(1962)andOlsen(1965),asclassicsourcesamongmany,havelongbeenawareoftheflawedincentivesfacingpoliticians.Theprecedingproblemsarealsowellknowntothosedevelopingmodelsofgovernment(e.g.,Becker1983,BrennanandBuchanan1979,Niskanen1975,Peltzman1976,andStigler1971).Inmodelsofwidelyvaryingtypes,equilibriumspendingispredictedtobenon-optimallylargeandbudgetrulesareseenasneededconstraintsonpoliticians'taxandspendingbehavior.Thepredictionsofthevariousmodelsofgovernmentareborneoutindatashowingasteadygrowthinthesizeofgovernmentinoursociety.Averagingoverdecades,tosmooththeimpactofbusinesscycles,thepercentofGDP(nationaloutputor,equivalently,income)spentbyalllevelsofgovernmentwas22.8(1950s),25.1(1960s),28.2(1970s),30.6(1980s),and30.5(1990-1998).ItislikelythatthisgrowthwasnotdesiredbyAmericanvoters,assuggestedbythevariousmodelsofgovernmentcitedabove.However,themechanismproposedheretoreformgovernmentallowsforthepossibilitythatgovernmentspendingisasuperiorgood.Thelargedeficitsofthe1980sandearly1990sresultedinthevariousBalancedBudgetAmendment(hereafterBBA)proposalsas

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Metadata [hide]

Title	Real Government Reform
Authors/Creators:	Philip E. Graves, University of Colorado
Year:	2004
Volume:	19
Number:	2
Pages:	43 - 60
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Public choice theory, Taxation, Business cycles, Public expenditure, Political competition, Private ownership, Efficiency, Public finance, Legislation

Citation:
Graves, Philip E. / 2004. "Real Government Reform." The Journal of Private Enterprise, 19(2): 43-60.