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

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.

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.

The Reporting Entity in Private-Public Accounting Harmonisation. Is Control Enough for the Local Government Consolidated Financial Statements?

2017 ◽  
pp. 5-29 ◽  
Author(s):  
Cristian Carini ◽  
Laura Rocca ◽  
Claudio Teodori ◽  
Monica Veneziani
Keyword(s):  
Public Sector ◽  
Local Government ◽  
Accounting Standards ◽  
Financial Statements ◽  
Consolidated Financial Statements ◽  
The Public ◽  
Financial Accountability ◽  
Public Sector Accounting ◽  
Definition Of ◽  
Reporting Entity

The European Commission initiated a discussion on the expediency of using the International Public Sector Accounting Standards (IPSAS), based on the IAS/IFRS, as a common base for harmonizing the public sector accounting systems of the member states. However, literature suggests that accounting is not neutral with respect to the economic, social and political dimensions. In the perspective of evolution of the accounting regulation outlined, balanced between accountability, with the need to represent phenomena for reporting pur-poses, and decisionmaking issues, which concentrates on the quantitative importance of the values, the paper aims to analyse the effects of the application of different criteria for the definition of the reporting entity of the local government consolidated financial statements (CFS). The Italian PCA 4/4, the test of control and the financial accountability approaches are examined. The evidence that emerged from the case studies examined identifies several criticalities in the Italian PCA 4/4 and support the thesis that the financial accountability approach is more effective in providing a complete representation of the public resources entrusted to and managed by the group, whereas the control approach better approximates quantification of the group results in terms of central government surveillance. The analysis highlights the importance of the post implementation review period and the opportunity to contextualize the adoption of the consolidated financial statement in the broader spectrum of the accounting harmonization process, participating in the process of definition of the European Public Sector Accounting Standards (EPSAS).

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