Are government expenditures more cyclical the more they finance the provision of public goods?

Andrew Abbott, Philip Jones

Research output: Contribution to journalArticlepeer-review

Abstract

The “publicness” of services provided by governments can be gauged with reference to the extent to which services are “non-rival in consumption.” Services that are more “rival in consumption” (e.g., education and medical care) are more likely to be “parceled out” between citizens. With greater personal experience, voters are more likely to be aware of private-good benefits and therefore are far more likely to perceive these services as part of a personal “endowment.” In economic downturns, they attach priority to sustaining expenditures on more “private” services and vote-maximizing governments respond by diverting expenditure from “more public” to “more private” services. Consequently, government expenditures are more cyclical the more they finance non-rival services. Predictions are tested with reference to government expenditures in 28 OECD countries between 1997 and 2019.
Original languageEnglish
Pages (from-to)574-592
Number of pages19
JournalKyklos
Volume77
Issue number3
Early online date25 Mar 2024
DOIs
Publication statusPublished - 31 Aug 2024

Data Availability Statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.

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