The Growth of the Public Sector: Theories and International Evidence.

• Author: Schap, David

Edited collections of essays are unruly as a rule. If a well-organized collection therefore pleasantly surprises, then the thorough plenning and fine execution so obvious in this book is very pleasing indeed. The order is not spontaneous. Rather, it is created using simple organizing principles by which specific goals are first identified then pursued via the scientific method. Here we have a book with a threefold mission: document the size and growth of

the public sector using clear definitions and recent international data (observation); review alternative hypotheses (theory), carefully partitioning those that address public sector size from those that address public sector growth; and present evidence on the various and sometimes competing hypotheses (empirical testing). The intended audience ranges from students who have advanced beyond intermediate theory to scholars researching and/or teaching public economics (i.e., public finance, public choice, or public policy).

One reads in the editor's opening chapter that public sector growth can be measured in various ways. Those interested in growth patterns measured in terms of the amount of resources governments use, own, control and/or produce will have to read elsewhere. This book focuses more narrowly on the most conventional measure of growth, namely changes in the amount governments spend. A twofold rationale is given for the limited focus: convenience of measure and economists' interest in nonmarket (or more particularly government) provision of goods and services.

The next two chapters present data concerning government expenditure. Paul Saunders writes on "Recent Trends in the Size and Growth of Government in OECD Countries," first describing a set of comparative measures of the level and growth of government activity, then applying principally one measure, namely government outlays relative to GDP. The data indicate that after several decades of steady increase, general government outlays relative to GDP for most OECD countries peaked during the 1980s with slight declines thereafter. Also documented is the general drift toward expenditures with ever more substantial welfare state/transfer components. The second chapter presenting summary data is similar to the first in structure as well as title, though its findings are dissimilar. In "Recent Trends in the Size and Growth of Government in Developing Countries," David Lira revisits the issue of measurement before presenting data and...