Yesterday’s Games: Contingency Learning and the Growth of Public Spending, 1890-1938

Leonard Dudley and Ulrich Witt

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: 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)
Pages: 34 pages
Date: 2003
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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