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.