Baumol's cost disease and the withering of the state

2018 ◽  
Vol 21 (1) ◽  
pp. 53-85
Author(s):  
Joshua Semat ◽  
David Lowery ◽  
Suzanne Linn ◽  
William D. Berry
Keyword(s):  
Public Sector ◽  
Disease Model ◽  
The Public ◽  
Government Growth ◽  
Cost Disease ◽  
Cost Growth ◽  
Form Of Government ◽  
Domestic Spending ◽  
Real Growth ◽  
Spending Growth

AbstractMost theories of government growth place nearly exclusive attention on real changes in public sector activity. Yet, much nominal post–WWII government spending growth was not in the form of the public sector doing more relative to the general economy (real growth), but in the form of government activities becoming relatively more expensive (cost growth). Baumol's (1967) “cost disease” model is our best guide to understanding cost growth, but over time, Baumol has offered conflicting hypotheses about how cost growth bears on real growth. Using 1947–2012 U.S. data, we test these hypotheses, along with a more novel expectation, by modifying Berry and Lowery's (1987b) econometric models of real growth in public purchases and transfers to consider the influence of government cost growth on real public domestic spending.

Approaches in Islamic Public Sector Management

2015 ◽  
Vol 1 ◽  
Author(s):  
Azaharaini Mohammed Jamil
Keyword(s):  
Public Sector ◽  
Public Affairs ◽  
Public Officials ◽  
Public Sector Management ◽  
The Public ◽  
Goods And Services ◽  
Muslim Countries ◽  
Brunei Darussalam ◽  
Form Of Government ◽  
Development Goals

Modern Public Sector Management are groups of public officials with the authority to formulate, interpret and implement government policies and programmes to achieve desired socio-economic development goals using a series of processes from planning, organising to leading and controlling. This paper explores whether or not the delivery of goods and services to the public is implemented in accordance with the objectives of the Qur’an and Sunnah, and in the light of the discussion made by a number of Islamic scholars that ‘none of the existing Muslim Countries has so far achieved a form of government that could be called genuinely Islamic’. By reflecting upon those claims, this paper examines the concept of Islamic Governance and the Maqāsid of the Sharī’ah and suggests approaches towards making Islamic values and principles play a more prominent role in the conduct of public affairs in Negara Brunei Darussalam.

The Effects of International Openness on the Public Sector Growth

2020 ◽  
pp. 1103-1122
Author(s):  
Ali R. Özdemir
Keyword(s):  
Public Sector ◽  
Inverse Relationship ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Empirical Literature ◽  
Local Public Finance ◽  
The Public ◽  
Government Growth ◽  
Wide Range ◽  
Compensation Hypothesis

Using Ordinary Least Squares (OLS) with panel corrected standard errors for OECD panel data this chapter, in contrast to Compensation hypothesis, finds a negative relationship between openness and the rate of public sector growth. In addition, this inverse relationship is found to be the strongest when electoral systems are more competitive. The empirical results presented here also suggests that openness constrains government growth more when the governments are run by either left-leaning parties or by left-leaning coalitions. This result holds for most measures of government spending and is robust to the inclusion of a wide range of controls. Unlike the existing empirical literature, which focuses on the ‘compensation effect' of openness on government growth, this study supports the ‘competition effect' of openness drawn from the literature on local public finance.

The Effects of International Openness on the Public Sector Growth

2016 ◽  
pp. 116-135
Author(s):  
Ali R. Özdemir
Keyword(s):  
Public Sector ◽  
Inverse Relationship ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Empirical Literature ◽  
Local Public Finance ◽  
The Public ◽  
Government Growth ◽  
Wide Range ◽  
Compensation Hypothesis

Using Ordinary Least Squares (OLS) with panel corrected standard errors for OECD panel data this chapter, in contrast to Compensation hypothesis, finds a negative relationship between openness and the rate of public sector growth. In addition, this inverse relationship is found to be the strongest when electoral systems are more competitive. The empirical results presented here also suggests that openness constrains government growth more when the governments are run by either left-leaning parties or by left-leaning coalitions. This result holds for most measures of government spending and is robust to the inclusion of a wide range of controls. Unlike the existing empirical literature, which focuses on the ‘compensation effect' of openness on government growth, this study supports the ‘competition effect' of openness drawn from the literature on local public finance.

scholarly journals Austrian Government Expenditures: Wagners Law Or Baumols Disease?

2011 ◽  
Vol 6 (11) ◽  
Author(s):  
Reinhard Neck ◽  
Michael Getzner
Keyword(s):  
Public Sector ◽  
Empirical Evidence ◽  
Income Elasticity ◽  
Government Expenditures ◽  
The Public ◽  
Elasticity Of Demand ◽  
Cost Disease ◽  
Short Run ◽  
The Cost ◽  
Income Elasticity Of Demand

Government expenditures have grown in Austria during most of the 20th century. In this paper, we present empirical evidence for this growth process and analyze some of its possible reasons. In particular, two prominent theoretical explanations for public sector growth are tested for Austria: first, Wagners Law hypothesizing a positive income elasticity of demand for public goods, and second, Baumols Cost Disease, relating public sector growth to above-average cost increases in the public sector as compared to the private sector. The empirical evidence confirms the importance of the Cost Disease for Austria but cannot confirm the validity of Wagners Law. Business cycles influence government expenditures in the short run, while a number of variables suggested by public choice theories except for fiscal illusion do not significantly influence the growth of the public sector in Austria.

scholarly journals DOES THE PUBLIC SECTOR IMPLODE FROM BAUMOL'S COST DISEASE?

2015 ◽  
Vol 54 (2) ◽  
pp. 810-818 ◽  
Author(s):  
Torben M. Andersen
Keyword(s):  
Public Sector ◽  
The Public ◽  
Cost Disease
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