Yesterday’s Games: Contingency Learning and the Growth of Public Spending, 1890-1938
Leonard Dudley () and
Cahiers de recherche from Universite de Montreal, Departement de sciences economiques
Neither democracy nor globalization can explain the doubling of the peacetime public share in many Western countries between World Wars I and II. Here we examine two other explanations that are consistent with the timing of the observed changes, namely, (1) a shift in the demand for public goods and (2) the effect of war on the willingness to share. We first model each of these approaches as a contingency-learning phenomenon within Schelling’s Multi-Person Dilemma. We then derive verifiable propositions from each hypothesis. National time series of public spending as a share of GNP reveal no unit root but a break in trend, a result shown to favor explanation (2) over (1).
Keywords: Wagner's Law; war; government exnditures; democracy; globalization (search for similar items in EconPapers)
JEL-codes: H5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-pbe and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2003-20
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