Wagner's law in the Philippine context: a study of Philippine government expenditure growth from 1946-2005
Date
2006-04
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Abstract
A large part of the quest for development in the realm of welfare economics lies in identifying the cause of stagnation in the growth of public expenditures. By studying the growth of public expenditures during a long period of time according to the Wagner's law, the trend will always be increasing through the years. This paper shows that Wagner's Law is not valid since Philippine government expenditures in a span of sixty years has not always been exponential but has a flex point where the growth of public expenditures suddenly diminishes. It also explains that while the increasing per capita income does not exhibit a statistically significant correlation to the ratio of government expenditures to national income, prices of private and public goods, do.
Lastly, this study has shown that the Wagner's Law may not be applicable especially in developing countries as illustrated in this study of the Philippines.
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Keywords
Wagner's law, Government expenditure, Public fund, Public expenditure, Public spending