The growth of public expenditure in Iceland

Abstract

In 1863 Adolph Wagner first published his so-called ‘Law of Ever-Increasing State Activity’ in his analysis of the Austrian Budget.¹ Since then his ‘law’ has attracted a great deal of attention in economic discussion and has stimulated further study in various countries.² One result of these analyses has been the rejection of his arguments while confirming the conclusions which he reached. Wagner did not succeed in demonstrating a causal relationship which accounted inexorably for a correlative growth of government expenditure and community output in the long run, and even less successful was his more restrictive contention that the former increased at a faster rate. This supports the proposition that Wagner, as the leading theoretician of the ‘Kathedersozialisten’, used the term ‘law’ to disguise his social and political value judgments in order to make them appear scientific and objective.

This paper is based on a Ph.D. thesis prepared for the University of London under the supervision of Professors M. H. Peston and J. Wiseman. The author wishes to acknowledge the help of Mr. Peter Müller in the preparation of the text, and Professor Alan T. Peacock for advice and co-operation.

This paper is based on a Ph.D. thesis prepared for the University of London under the supervision of Professors M. H. Peston and J. Wiseman. The author wishes to acknowledge the help of Mr. Peter Müller in the preparation of the text, and Professor Alan T. Peacock for advice and co-operation.

Notes

This paper is based on a Ph.D. thesis prepared for the University of London under the supervision of Professors M. H. Peston and J. Wiseman. The author wishes to acknowledge the help of Mr. Peter Müller in the preparation of the text, and Professor Alan T. Peacock for advice and co-operation.

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Notes on contributors

Gísli Blöndal

Gísli Blöndal, born 1935, cand. oecon. 1959, Ph.D. (Econ.) 1965. Economist, Central Bank of Iceland 1965-67, appointed Director of the Bureau of the Budget, Ministry of Finance, Reykjavik in 1967. Has written articles on various aspects of public finance.