Investigating the Validity of Wagner\'s Law and Performance-Based Budget Reform in Public Expenditure of Selected Asian Countries (in Persian)

Samaneh Noraniazad (), Mohammad Hosein Kamani () and Fatemeh Keshavarz ()
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Samaneh Noraniazad: Department of Economics, Payame Noor University, Tehran, Iran
Mohammad Hosein Kamani: Department of Management, Payame Noor University, Tehran, Iran.
Fatemeh Keshavarz: Payame Noor University, Tehran, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2022, vol. 26, issue 4, 123-154

Abstract: Wagner's law indicates a positive long-run equilibrium relationship between per capita income growth and the relative size of the public sector. Accordingly, the main purpose of this article is to verify Wagner's theory and the law on operational budgeting reforms on public spending and educational, health, and military priorities. To meet these ends, the data of 13 Asian selected countries during 2000-2018 periods and the Feasible Generalized Least Squares (FGLS) technique were used. The results show that by increase in GDP per capita, the trend and structure of public expenditures, educational and health priorities will be increasing and significant; But in the military program, this effect is negative and significant. This validates the Wagner's law in public spending, and educational and health priorities. In addition, the impact of performance-based budget Reform has led to changes in the budget structure and trend of public spending, but in the educational, health, and military priorities, the pertaining significance is not confirmed. In other words, due to the lack of change in the structure, trend of expenditures and the pattern of budget allocation, the effect of the implementation of this law was temporary and not permanent.

Keywords: Wagner’s Theory; Musgrave Hypothesis; Performance Budgeting; Public Expenditure; Budget Allocation. (search for similar items in EconPapers)
JEL-codes: E62 G38 N45 (search for similar items in EconPapers)
Date: 2022
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