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Barbara Dluhosch () and Klaus Zimmermann
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Barbara Dluhosch: Helmut Schmidt University, Hamburg, Postal: Institut fuer Wirtschaftspolitik Helmut-Schmidt-Universitaet, Universitaet der Bundeswehr Hamburg, Holstenhofweg 85, 22043 Hamburg, Tel +49-40-6541-3366, Fax +49-40-6541-2042

No 58/2007, Working Paper from Helmut Schmidt University, Hamburg

Abstract: Previous studies were plagued with considerable problems when interpreting and empirically analysing Wagner's Law. Therefore, we initially present some kind of "pure theory of government's share" for a two-person society based on the pure theory of public and private goods as originally developed by Samuelson. We show that Wagner's regime of a representative and authoritative individual and collective decision making a la Samuelson imply different government shares in GNP, though, in principle, Wagner's outcome can be generated even in a Samuelsonian context. Generalizing our results to an n-person society, we derive "optimal" government shares by use of various variants of the model, however, with very different distributional consequences.

Keywords: Wagner's Law; public goods; budget-to GNP-ratio (search for similar items in EconPapers)
JEL-codes: D11 H11 H41 H50 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2007-01
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