Warfare and welfare? Understanding 19th and 20th century Central Government spending

Abstract

This paper evaluates theories aiming to explain the size and growth of government spending, develops a framework inclusive of the so-called guns vs. butter tradeoff effect, and offers insights especially for the period 1870-1938. There were differences between the excessive and responsive government explanations, and between the long-run and short-run explanations, as well as cross-section and time series approaches. Here central government spending, conditioned by the regime characteristics, is proposed to be analyzed on the basis of the demand characteristics of military spending and social spending, their interaction, public debt constraints, as well as institutional constraints and other environmental variables