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- Title
Choosing Size of Government Under Ambiguity: Infrastructure Spending and Income Taxation.
- Authors
Manski, Charles F.
- Abstract
I examine choice of size of government by a planner who has partial knowledge of population preferences and the productivity of public spending. Focusing on income tax-financed spending for infrastructure, I examine scenarios where the planner observes the outcome of a status quo policy and uses various decision criteria to choose policy. The analysis shows that the planner can reasonably choose a wide range of spending levels - thus, a society can rationalise having a small or large government. I conclude that to achieve credible conclusions about the desirable size of government, we need to improve current knowledge of preferences and the productivity of spending vastly.
- Subjects
GOVERNMENT size; GOVERNMENT spending policy; PUBLIC spending; PUBLIC finance; INCOME tax policy; TAXATION economics; INFRASTRUCTURE (Economics); PUBLIC welfare
- Publication
Economic Journal, 2014, Vol 124, Issue 576, p359
- ISSN
0013-0133
- Publication type
Article
- DOI
10.1111/ecoj.12140