Tests of a rational theory of the size of government

The extensive literature on the size and growth of government attests to the long-standing interest of social scientists in the interrelations of economic development, income distribution, political processes, bureaucracy, and tax rates. Recent surveys of parts of this literature (Peacock, 1979; Cameron, 1978; and Larkey, Stolp and Winer, 1981) show that neither theoretical nor empirical work has resolved the main issues. (See also Peltzman, 1980.) There is little agreement about a common model or framework for predicting the size of government or discussing the causes of government growth or decline. And there is no consensus about the empirical evidence on the reasons for changes in the size of government.