Why do governments find it so hard to control public expenditure

Essay by Anonymous UserUniversity, Master'sC+, June 1996

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Why do governments find it so hard to control public expenditure?

Since the 1970's rising public expenditure has become a politically salient issue, with the focus being on the difficulties experienced in trying to control it. In order to answer a question concerning why governments find it hard to control public expenditure it is first necessary to look at the reasons for the growth in public spending. There are three approaches which attempt to give reasons for growing public expenditure which I intend to scrutinise, these are, the societal system approach, the political system approach and the governmental system approach. An evaluation of these approaches should in turn shed light as to why governments find rising public expenditure hard to control. Following this approach which gives a wide outlook on the problems facing governments in controlling public expenditure, I will look at the post 1979 conservative government as it in particular targeted controlling expenditure upon taking office.

Under the societal system approach one reason why a growth in public spending can be seen to have occurred is due to Wagner's 'law of increasing state activity.' Wagner's claim is that as per capita real income increases in particular nations, they will spend a higher proportion of national product through government. As Wagner's reasons for increased public expenditure tend to be centralised around industrialisation and its associated effects it is not surprising to find that he thought the density of urban living would increase social frictions to such an extent that the government would be called in to handle it. That is to say, urban living would result in the need for enhanced police protection and other forms of government regulation. Wagner also believed that with growing industry certain investments would require so much capital that the state would have to provide...