Fiscal illusion and the demand for government expenditures in the UK

Gemmell N., Morrissey O., Pinar A.

European Journal of Political Economy, cilt.15, sa.4, ss.687-704, 1999 (SCI-Expanded, Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 15 Sayı: 4
  • Basım Tarihi: 1999
  • Doi Numarası: 10.1016/s0176-2680(99)00030-0
  • Dergi Adı: European Journal of Political Economy
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus
  • Sayfa Sayıları: ss.687-704
  • Anahtar Kelimeler: Fiscal illusion, Government growth, Public expenditure, Tax structure
  • Ankara Üniversitesi Adresli: Evet

Özet

This paper examines whether variables commonly used to test standard fiscal illusion arguments (that tax structure affects voters' demands for public goods) can help explain the time-series behaviour of government expenditure in the UK during 1955-1994. We modify a standard median voter model to incorporate fiscal illusion via 'less visible' (indirect) taxes and deficit financing. While we find evidence that both are positively associated with increased government spending, this would appear to be consistent with both fiscal illusion and standard efficiency arguments. © 1999 Elsevier Science B.V. All rights reserved.